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The entrepreneurial spirit is alive and well in America, but it’s easy for successful organizations to get comfortable and stop innovating to avoid disrupting their success. We see this across industries, as well as in government and the nonprofit sector. Rob and Jackie discuss advanced leadership and the importance of continuous innovation with Rosabeth Moss Kanter, Ernest L. Arbuckle professor of business at Harvard Business School and author of Thinking Outside the Building: How Advanced Leaders Can Change the World One Smart Innovation at a Time.
- Rosabeth Moss Kanter, Think Outside the Building: How Advanced Leaders Can Change the World One Smart Innovation at a Time (PublicAffairs, 2020).
- Rosabeth Moss Kanter, Change Masters (Free Press, 1985).
- Rosabeth Moss Kanter, Move: How to Rebuild and Reinvent America’s Infrastructure (W.W. Norton & Company, 2015).
Rob Atkinson: Welcome to Innovation Files. I’m Rob Atkinson, founder and President of the Information Technology and Innovation Foundation. We’re a DC based think tank that works on technology policy.
Jackie Whisman: And I’m Jackie Whisman. I handle outreach at ITIF, which I’m proud to say is the world’s top ranked think tank for science and technology policy.
Rob Atkinson: And this podcast is about the kinds of issues we cover at ITIF from the broad economics of innovation, to specific policy and regulatory questions about new technologies. In this episode, we’re talking about thinking big and thinking outside the box, when it comes to innovation policy.
Jackie Whisman: I hope we have time to cover a bunch of things because our guest is just that good. So let’s jump right in. Rosabeth Moss Kanter is the Ernest L. Arbuckle Professor of Business Administration at Harvard Business School. She specializes in strategy, innovation and leadership for change. She’s the author or coauthor of over 20 books. And her latest is Think Outside the Building, How Advanced Leaders Can Change the World, One Smart Innovation at a Time. Welcome Rosabeth.
Rosabeth Moss Kanter: Thank you. My pleasure.
Rob Atkinson: You know Rosabeth, I have been reading your books for a long time. I think the first book I ever read of yours was The Change Masters. And I remember a great line you had in that book about GM, where you said people are wrong when they say GM doesn’t take the long view. They do, it’s just the long view back. So I’ve learned a lot over the years of reading many of your books, and just most recently, Think Outside the Building. So I wanted to start with that. In your new book, you write quote, “too many people get set in their ways. They prefer routine tasks to the comfort, and the comfort of the status quo to the risk of innovation.” And given that we’re all about innovation, that to me is a critical insight. Can you say a little bit more about that?
Rosabeth Moss Kanter: So we do have the entrepreneurial spirit alive and well in America, but we need more of it. And when people are employed, particularly employed in established institutions, it’s too easy to get comfortable. It’s too easy to expect everything to come your way without having to necessarily find new ideas. And when that happens, innovation shuts down. It’s why Hans Vestberg, who is the new CEO of Verizon, tells his top executives he wants them to do at least one new thing or one new place every week, so that they will be refreshed. Because success can narrow your vision. You’re successful, you want to preserve the success. When in fact the best way to guarantee success in the future is to innovate, have the next idea waiting.
Rob Atkinson: Well this is very much along the lines of what Clay Christiansen always warned about, which was... He passed away recently sadly, but he had written much about this, as you had, how easy it is for successful organizations to get stuck, to get happy with their success. And we see that both in government and in the for profit and the nonprofit sector. And it’s just so easy to just stay there and not take those next risks.
Rosabeth Moss Kanter: Right? Well, Clay’s office was right next door to me at Harvard Business School. So many shared perspectives. But I would say it’s not just a matter of individuals getting comfortable. It’s also in the nature of institutions. Once something is established, there are so many forces keeping it, doing exactly what it’s done. That’s what your partners expect. That’s what your suppliers expect. That’s what your customers expect. And it gets hard to depart from that, if you’re buried well inside that institution. Whether it’s a company or a government or a non-for-profit, I mean, big philanthropy has some of the same problems.
Rob Atkinson: You write a lot about different models of how people have tried to overcome that and been successful on it. And I think one of the interesting points you made in the book was that one of the reasons that’s important to do, or actually critical to do, is because there’s so many unexpected events in the world and we don’t live in a world anymore that’s stable. And I was really struck that your book came out in January. So you must have gotten it to the publisher at least a few months before that. But you wrote in the book where you said, “diseases once contained in obscure distant nations, now fly around to other countries on an airplane.” Did you have any special insights on that one?
Rosabeth Moss Kanter: You know, it’s interesting to say that because on page 17 of the book, I have a long list of the kinds of problems that require new leadership and big innovation, and not just pandemics. And I’ll tell you where I got my insights, but also I talk about racial disparities. Talk about something happening that’s in the news. I talk about climate change conflicts and war and health problems, health access problems, education shortfalls. As we see now with the digital divide, as people are going remote in education too. So it’s not as though these are new problems. They’ve been around for awhile. And I am particularly sensitive to pandemics because as somebody who traveled all over the world to speak and work with companies, I would know about SARS in Asia, Ebola in Africa. And I was going to some of those places. And one thing I learned was you find an excuse not to shake anybody’s hands.
So I don’t want to be impolite. I’m a very friendly and outgoing person, but I found a million excuses, put something in my right hand, that I didn’t shake hands. Because we know these diseases don’t stay wherever they originate. And so the fact that then we have the mother of all pandemics, or I should say the father of all, the biggest, the whopper of all pandemics hitting. Yes, I put the book to bed. I read the last proofs maybe six months before it came out, but these were not unpredictable. And in fact, in the book, I talk about people overcoming some of those crises through innovation. I talk about Ebola in West Africa. I talk about removing Confederate statues in Louisiana or working with the black community in Louisiana and other parts of the country. So what I was trying to write about was not only these events, but also the solutions that people could find if they had the entrepreneurial spirit, they knew how to innovate and they could think outside the building really important.
Jackie Whisman: Did you want to talk about a couple examples of the solutions that the innovative spirit allowed?
Rosabeth Moss Kanter: The kinds of things that innovators are doing for these problems. And some of the problems by the way are surprises. And so you have to deal with them as a crisis and mobilize people and get through them. But some of them have been ongoing lingering problems. So for example, in Baton Rouge, Louisiana, Reverend Raymond Jetson was an activist. He had been in the state legislature, Republican Governors, as well as Democrats had appointed him for various relief efforts. For example, after hurricane Katrina. He worked hard after floods in Baton Rouge and his vision for a better city that would connect business and left-behind neighborhoods and education and health in a very positive way to build the future, involved different kinds of access. So one thing he knew was that the black community doesn’t necessarily trust the established hospitals. First of all, they’re not necessarily located near them.
And there isn’t necessarily public transportation to get there. And people can’t necessarily afford cars. So he felt if you wanted to improve health or any other aspect of life in that community, you needed to take it to where the people were. So they started a project in barbershops, and of course we should do the thing in beauty salons. So barbershops and beauty salons are where people gather and they trust them. So they trained, they initially trained 40 barbers to take blood pressure and other health readings. And to educate people and refer them if they needed to be referred. And to hold convenings in the barbershop where people could be educated and learn.
To me, that’s brilliant. That’s how we are going to innovate in healthcare. It’s not going to be the large central acute care hospital. We’ll have mobile clinics. We’ll have mammograms for women in department stores like Nordstrom’s or Target or Walmart. Walmart is now in the healthcare business. So these are examples of thinking outside the building, outside this idea that health is the hospital. Health is wherever people get care, wherever they are.
Education, the same thing. Education is not necessarily the classroom. We’re now finding that education is the remote classroom. Education is Khan Academy where Salman Khan, a graduate of my school, started creating a series of how-to videos, that taught people math, taught people skills. And they didn’t even have to be in a classroom. We’re going to be innovative in all those ways. And you know what, it’s going to affect schools. Schools will use that, it will enrich the curriculum. But we need an awful lot of innovation also to make these things possible. So if you want to, I could get started on broadband?
Jackie Whisman: Well, I need to give a shout out to Khan Academy because it saved some days in my four year old homeschool over Zoom here. So that’s great.
My next question is, you launched the advanced leadership initiative at Harvard, and it appears your experiences there were the basis for your most recent book. What led you to do this and what is advanced leadership?
Rosabeth Moss Kanter: So, first of all, I like to think outside the building myself. I mean, Harvard is almost 400 years old. And if you think it’s hard to change General Motors, by the way, Mary Barra has done a very good job of changing General Motors. So I should give a shout out for Mary and GM. But a 400 year old institution... But there haven’t been that many true innovations in higher education for a long time. And so colleagues and I decided that we would invent a new stage of higher education. That was outside the building thinking, a new stage. Because people live longer. And also there are more problems in the world. These problems we’ve been rattling off, who’s going to solve them? Why not experienced leaders who now have 20 to 30 years, sometimes more, of productive life after they leave their first income-earning career. When, if they’re an investment banker or a venture capitalist, they may leave that really young.
So this is young people too, and they want to take on these big problems of the world. We said, we should educate them. And so what led to the book was actually how we were educating them and other people to do it. I mean, I spend a lot of time with entrepreneurs, whether they are for-profit ventures, whether they are startups inside established companies, because big companies want to have entrepreneurs too sort of. And so we sold it to the university a little, that took us awhile. I don’t want to go through our whole saga, but we lived through everything that every innovator in an establishment has to live through. You have to convince people who may nod and smile and say, “Oh, what an interesting idea that will never work,” or they have lots of ways to have other things to do.
So I learned a lot of lessons from leading it, my colleagues from the beginning were great, and I ended up taking on the responsibility for building this. We have now built it into a really successful innovation. Stanford is doing it. Notre Dame is doing it. The Tower School at the University of Texas and University in Spain. And I think someday everybody will be doing this. But what I learned from that experience was how widely applicable my ideas about innovation and change are. I learned that you need a very large and effective coalition. And to build that coalition, I built a coalition across all of Harvard because Harvard was always every tub on its own bottom. And not exactly the most collaborative across schools. We built that. Because I found what would interest each person that I asked to help lead that. And we tried to give something, which the best innovations do, the best innovations give something that each entity in the partnership did not have before you came along, they give something new.
They don’t take away and threaten. Now eventually they might. But I think the more one can find partnerships and collaborations that create totally new modes of action, the more likely you’re going to reduce resistance and be able to get it done. And by the way, talk about surprises as the new normal. We had to do all of this at a time when Harvard changed presidents, had an interim for a year who was not going to support anything new. We weathered the financial crisis, the great global recession, by having a very strong vision and mission and something that lots of people could benefit from. So we kept going, and if you keep going through crisis, even if you’re trying to resolve a crisis, you can get unusual, different, and important things done.
Rob Atkinson: You were able to do that in part, because you yourself are an entrepreneurial leader. I was asked, somebody interviewed me for some book they were doing on, how do you get innovation in organizations? And I said, the problem is that almost all organizations say they want innovation, but few of them actually do in the Schumpeterian sense of innovation is something that’s disruptive. And I think that’s a big challenge. It’s sort of like, we want innovation, but it should be this cute thing over on the side that doesn’t really change things too much. First of all, do you agree with that? And secondly, if you do how do we get around that? Because I think we’re going to need disruptive innovation, the kind you talked about, for example, in the barber shops and disruptive innovation.
Rosabeth Moss Kanter: So first of all, I think you’re totally right. I used to say that people would have me come and consult about innovation. And the first thing they would say is who else is doing it? In the book I learned, I tell stories about one innovation for college financing, where the founders would go to lots of people who say we’d like in, but we’d like to be the third, pretty funny. So yes, it’s true. If it looks really disruptive, I think one of the secrets is you don’t swagger and get arrogant. You don’t do the Silicon Valley thing where you say, “we’re going to wipe you out and take over the world.” In fact, you try to make your disruptive innovation sound as familiar and safe as possible. To get radical innovation, you sometimes need conservative approaches.
And you pilot it. You invite them in as partners. You listen to them. I think... I mean, Uber seems back on track, but Uber in the beginning, I teach a case on Uber and stakeholders where they managed to offend every single stakeholder by saying, “we don’t need any of you. We don’t need government. We don’t need the regulators. Our customers may love us, but we don’t necessarily have to act fast, if somebody actually is raped or murdered,” which happened to Uber early on. But there are collaborative approaches where had they, like some other innovations I’ve known, done that in partnership with government. And by the way, if government were more open to partnership with entrepreneurs, we could sneak in disruption in a way that did not feel disruptive. I mean, none of us like disruption. I don’t like disruption. I like things just where they are. Most of us don’t like change unless it’s bringing us benefits and we’re doing it.
So I totally agree with you, but I think there are ways around it if you’re a really smart leader and what you care about actually, is not winning. Although winning is of course better than losing, but what you care about is bringing something new and powerful and important to the world. You care about the ultimate social and economic impact. That’s what you care about. Then you’re willing to work with lots of partners, accommodate them, be flexible, move it along through pilot programs until it’s proven. And sometimes people will never notice that you just changed their entire business model.
Jackie Whisman: And what do you think governments can do to help move this along?
Rosabeth Moss Kanter: Well, Rob and I have been talking about this for a hundred years.
Jackie Whisman: Maybe that’s why I asked.
Rosabeth Moss Kanter: Yeah. One thing governments can do sometimes is get out of the way. I mean is, allow and enable experiments, but watch them carefully because sometimes they do need the hand of government or they’ll get out of control. I mean, we do need to protect the people. But in the early days of the internet, Senator Ed Markey likes to talk about the Telecommunications act, where one of the things he tried to do was get government out of the way, to let this new technology flourish on it’s own and see where it goes. So that’s one thing. Another thing government can do is, make sure that government is serving its function, which is getting it to all the people, making things universal. So I’ll get to broadband if you asked me about infrastructure, but we do not have universal Internet access in the United States. And it’s hard to believe. It’s absolutely hard to believe.
When I was in Turkey a few years ago, Turkcell was one of the companies on a panel I led. And in Turkey, you can go on any mountain in these underdeveloped regions and get perfect cell phone service. I can’t get perfect cell phone service in the suburban town next to where I live in Cambridge, Massachusetts. And not to mention rural areas, inner city areas. So why hasn’t government jumped on that? Some of my advanced leadership fellows are actually working on that. But here we have kids at home, supposedly getting their education through computers. They don’t have enough computers. If the parents are working at home, if there are other kids in the family. And then they might live in an area that simply doesn’t have wifi hotspots. I could go on and on. Why we don’t have a universal broadband initiative.
Colombia, the country of Columbia had it. You can get broadband in the most remote areas of Colombia, but not in the United States. Who are we? Are we the model for the world? And we want rural areas to believe in Government? Government has to bring some things to them. And one thing it needs to bring is access to transportation of course, high-speed rail. But it also needs to bring to them access to communications, which they don’t always have, which will build jobs. So there’s a lot government can do, particularly in technology areas. Enlightened leadership, enlightened government has a big vision. Rural electrification was one of those big visions and it built America.
Rob Atkinson: Well Rosabeth, I couldn’t agree more. We have, as you know, ITIF has long argued for over a decade for a significant national broadband strategy, including closing the digital divide in urban areas, particularly around computer ownership and affordability. But also in rural areas where it’s just not economical, companies can’t make their costs back in a lot of these areas. And you talk about other countries that have done that. They’ve done cost sharing, they’ve done partnerships. To be optimistic, President Trump has talked about an infrastructure package. You see both parties now in Congress talking about universal broadband, particularly now with Covid, we see that just how important that is. So I’m cautiously optimistic, going to keep my fingers crossed that maybe now is the time we can do that.
Rosabeth Moss Kanter: I think you’re right. But I think we also need these outside the building thinkers, who bring totally new models. So one of the people I had in mind, Wayne Warner is working on a project to bring broadband to rural areas through the rural electric cooperatives. And these would be cooperatives owned by the people. And so the way we often brought electricity to places left behind. Bain Capital of all things, which former Massachusetts Governor Deval Patrick helped start a double impact fund. And one of the investments is software in middle size and smaller cities, coding centers. We can bring jobs if we have all of this. But in terms of what should be in an infrastructure package. Well, first of all, is vision. We should talk about the country we want. And that involves values as well as an image of the future. At the beginning of the two thousands, there would have been an image in the last administration of bridges to the 21st century, as we entered the 21st century.
Then we were interrupted a bit because of terrorist attacks and a lot of money went into wars in the Middle East. But we were on track to think about bridges to the 21st century. The 21st century, where we want connect people and where we do, I think, want to finally end inequities and disparities that have plagued the country. And move away from the legacy of an unequal past to one in which everybody’s included.
So first you need leaders with vision. So whatever is in the package, it’s not the details of the technology. It’s a leader who can sell that in the same way that Dwight D. Eisenhower sold the idea of interstate highways, because of a country that wanted to be connected. He wanted to have it connected and he wanted to have it defensible. He wanted people to be able to get out to the countryside. He wanted to build other areas, etcetera. But now, what this package should have in it, is fewer highways more transit. It should be urban focused because that’s where the population is. And the biggest needs.
Rob Atkinson: We recently wrote a report on why any infrastructure package also has to include thinking about hybrid infrastructures. Traditional infrastructure is now can be infused with IT, whether it’s a water system, or a road system, or a transit system. So that’s got to be critical.
Jackie Whisman: Well thanks so much for being here Rosabeth, can you tell our listeners where they can find you and follow your work?
Rosabeth Moss Kanter: I have a webpage at Harvard business school. So hbs.edu/rosabethkanter, K-A-N-T-E-R. I am on Twitter, @RosabethKanter, K-A-N-T-E-R. And also on Facebook, same idea. And I would love hearing from people and I’m so delighted to do this with ITIF. It’s been a privilege to be connected through the years.
Jackie Whisman: Well, thanks again. And that’s it for this week. If you liked it, please be sure to rate us and subscribe. You can find the show notes and sign up for our weekly email newsletter on itif.org. Feel free to email show ideas or questions to [email protected] and follow us on Twitter, Facebook and LinkedIn, @ITIFdc.
Rob Atkinson: That’s it for now, but we have more episodes and great guests lined up. New episodes will drop every Monday morning. So we hope you’ll tune in next week.