Tom Peters On Innovation: Experiment 'Fearlessly'

The need to innovate is a constant in business, but the ability to do so declines with experience, maturity, and--the biggest killer of all--success, says Tom Peters, author and lecturer on business organizational behavior.

As an organization ages, it draws lessons from what has worked in the past and applies them to the future. It will draw the most lessons from past successes, leaving it particularly ill-equipped to deal with the challenges that don't mirror past conditions, he told an audience at the InformationWeek 500 Conference in Palm Desert, Calif. His talk was titled "Building An Innovation Machine."

Author of the 1982 business classic In Search Of Excellence, Peters said the chief executive officers of corporations may have to take on a new C-level role--that of chief destruction officer. It's easier to kill off organizations, or units of them, than to change their culture and accustomed ways of doing things.

Peters mocked recent business titles that proposed formulas for "built-to-last" companies. There's no proof that any company can be built to last past two decades, although there are a few exceptions, such as General Electric and at one time Kodak. Now Kodak is proving that having a charmed existence for more than 70 years is still not enough to ensure longevity, he noted.

"General Motors had 25 good years" from 1951 to 1976, Peters said. "The Japanese started attacking in 1970. General Motors is still around, but there isn't anybody staying awake at night worrying about what GM's next move is going to be," he said.

He added that GM's problem isn't its oft-cited load of pensioners and retired health care plan recipients, or the ability of its IT department to innovate. Rather, it's the fact that "nobody wants to buy the cars that GM builds anymore."

Only one speaker separated Peters from a keynote delivered by Ralph Szygenda, CIO of General Motors, at the conference. Szygenda was well-acquainted with the jibes Peters directed at his company. "Name one company that Tom Peters has run," Szygenda challenged his audience. (Peters acknowledged during his talk that he declined to become CEO of his own company.) Szygenda also challenged the notion that no one wants to buy GM cars: "One of every four cars and trucks sold in the U.S. is a GM product. No one else comes close."

Peters said several things were clear to him from studying business longevity. One is that "intelligence is highly overrated" as a critical factor in business. Instead, he cited the abiding relentlessness of Ulysses S. Grant in causing Union armies to prevail over the Confederacy. Many businesses will succeed merely because they remain relentless at doing what they do in the face of setbacks and failures.

He also mocked strategic planning, which in some cases tends to become a perpetual process of planning. The EDS IT consulting organization was once known for its "ready, fire, aim" tendencies, he said. After becoming part of General Motors, it adopted the GM practice of "ready, aim, aim, aim."

"Experiment fearlessly," he advised. Strategic plans, which extend present operations forward in sustained growth, "work brilliantly under conditions where you don't need them." Use a strategic plan "called doing things," he recommended.

Perhaps your company will be successful in the same manner as he was, Peters said. Success of In Search Of Excellence was an accident of timing. Peters was involved in a car accident and forced to stay at home for two months. During that period, "We were being hammered by the Japanese in steel and autos." At a time when the public was worried about what was wrong with American business, Peters and co-author Robert Waterman promised the answer by using the word excellence in relation to business in a title for the first time.

"Innovation is bloody random," appearing in unexpected places in the best-managed organizations. It may be that the most successful corporations of the future will be shooting stars, making a big impact for a brief period and then disappearing.

"My No. 1 company is Netscape. It was born, changed the world, and died in 72 months. I love this company," he said.