Outsourcing Innovation

Michael Metzger

When Southwest Airlines sought to improve turnaround time, it did not look inside the industry. It went outside – to NASCAR. Now Southwest faces new challenges. Will the current CEO look to outsiders to sustain its innovative culture?

For decades Southwest Airlines has been the darling of the airline industry. For example, when it sought innovative ways to decrease the time it took to refuel, disembark and board passengers, and unload and load baggage, Southwest did not look inside the airline industry. It went outside. It looked to NASCAR pit crews and drivers.

This is outsourcing – the most effective and efficient way to innovate. As Ben Kaufman, founder of Quirky, puts it, people inside the organization “know too much. Outsiders often present the most interesting answers to complex problems, not despite their lack of expertise, but because of it.” They bring a particular vantage point, enabling them to facilitate a process that is difficult for most insiders to maintain because of corporate politics, the need for job security, and the strong desire we all have to “fit in.”

Southwest isn’t the only enterprise to outsource innovation. Over the past 50 years, the Pentagon’s Defense Advanced Research Projects Agency (DARPA) has produced an unparalleled number of innovations. They’ve developed a robot that will go through the same terrain as a squad of Marines, closely following the path its leader takes, carrying hundreds of pounds and assimilating new commands. DARPA has done this by developing a “special forces” style research group, writes Harvard Business Review; one that tackles problems by assembling “diverse, agile, and scalable teams; and allowing independence from the mainstream organization in project selection and execution.”1

Outsourcing resonates with Einstein’s remarkable insight – you can’t solve a problem inside the framework that created it. Innovation is often essential to fixing problems. This requires reframing the problem, a role that outsiders do best. Innovative leaders recognize this. They’re willing to “look in a different mirror,” writes Robert Waterman in The Renewal Factor. “They get ideas from almost anyone outside the hierarchy,” recognizing insiders are too close to the problem. They have the unspoken need to defend what they did yesterday. Outsiders challenge taken-for-granted assumptions.

The brutal reality is that few companies look outside the hierarchy. That’s why most books on the subject of innovation are “rubbish,” writes The Economist. In some cases, it’s become a cliché. But in most cases, companies don’t understand the nature of innovation. They confuse it with change. Innovation is not change. It is life-or-death.

In 2005, Alan Deutschman wrote an article for Fast Company titled “Change Or Die.” If your business isn’t changing, it’s dying. But that’s not correct. Change isn’t always beneficial (cancer is change). The better word is renewal. If your body’s not renewing, it’s dying. Renew is Greek for the Latin innovate. Innovate or die. It’s life-or-death.

Clayton M. Christensen discovered this in studying the disk drive industry. Innovators made smaller and smaller drives that eventually drove the big, established companies out of business. He called these drives disruptive technologies. Established companies resisted them, preferring sustaining technologies that maintained the status quo. This mindset is the kiss of death for any business wanting to remain competitive in a fast changing world. Disruption is the lifeblood of innovation. Resist disruption and your business dies.

Findings from neuroscience support this. Disruption is a function of the brain’s right hemisphere. It takes an outside stance. Sustaining is a function of the left, the inside. Neuroimaging indicates that when the right hemisphere leads the way, it includes the left in how we think. However, when the left leads, it excludes the right hemisphere, the outside view. This shuts off disruption. It kills innovation. The solution is outsourcing the facilitator role in the innovative process to outsiders.

For people of faith, this should sound vaguely familiar. Jesus came from outside the earthly system, remaining fully God while becoming fully human. He disrupted the darkness by dying on the cross and descending into hell. Three days later he rose from the dead, offering renewed life. That’s what this coming weekend commemorates.

Keep an eye on Southwest Airlines. Herb Kelleher was the innovative founder. He stepped down a decade ago. Last year, Southwest lost more bags per passenger than any other carrier. And after years as one of the most punctual airlines, just 72 percent of Southwest’s flights were on time in the fourth quarter – dead last in the industry. Gary Kelly, Southwest’s CEO since 2004, says he has no desire to replicate Kelleher’s idiosyncratic style. But on March 12 he called upon Kelleher to address the company. The former CEO put it this way: “What we’re talking about here is your future. If we don’t change, you won’t have one.”

It’s closer to the mark to say if we don’t disrupt, we won’t have a future. This is true of every enterprise. Innovate or die – an endeavor that requires outsourcing.

Follow me on Twitter: @Metzger_Mike

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1 Regina E Dugan & Kaigham J. Gabriel, “Special Force” Innovation: How DARPA Attacks Problems, Harvard Business Review, October, 2013.

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6 thoughts on “Outsourcing Innovation”

  1. In the process of new becoming old, first the new wiil be given high expectations. When those expectations aren’t being met, it will be overlooked. Then it will soon be set aside. Finally it will be forgotten or lost. Now that which was new can be rediscovered and re-presented.

  2. Two challenges I find are these:

    –how does one find the correct outsider?

    –how does one get your insiders to listen to, respect and implement the ideas of the outsider?

    Where I work in a College, there is no top-down leadership, which is nice in many situations, but when you need to enforce consequences or rules….well, hoping people will just play nice doesn’t work well. So, while a top-down leader could just announce “we are going to try these new outside ideas,” here we can’t do that. Thoughts?

  3. Mike Metzger

    Carl:

    Good questions. Here are my suggestions:

    The first step is not finding the right outsiders but making sure you have the best insiders. These are leaders who:

    1) Embrace disruption. They are “engaged in a daily effort to fight corporate entropy, to welcome change, to uproot habits” (Robert Waterman). They treat the outsider view as a consigliore, an advisor who didn’t fear having his head cut off when telling Mafia leadership the unvarnished truth.

    2) Return authority. They recognize that right-brain leaders play a tactically important role in the inducement of a truly innovative environment.

    3) Build mutuality. They understand the strategic importance of leading with the right brain, knowing the left will also make an important contribution to the innovative effort.

    4) Lead change by paradox and complexity. They see the world as complex, interrelated, and paradoxical so they embrace tensions brought by outsiders.

    5) Focus on results. They prepare for innovation labs, fully participate, desire to have assumptions challenged, and hold colleagues accountable for achieving goals.

    Ss for the best outsiders, I recommend they:

    1) Are close… but not too close. They are borderline experts, close enough to comprehend technical aspects but not blinded by the biases that those immersed in the problem naturally form.

    2) Think in pictures. They see problems from unique angles, reframing and expressing them effectively via metaphors that lead to innovative solutions.

    3) Bring interdisciplinary expertise. They recommend innovative solutions, such as NASCAR pit crews improving aircraft turnaround at the gate.

    4) Have a sense of humor. They recognize that disruption can be difficult. They function as court jesters, recognizing how “good humor makes all things tolerable” (Henry Ward Beecher).

    Innovative leaders recognize that innovation is the result of companies embracing the intentional discipline to be disruptive. This often includes regularly scheduled roundtables for that purpose as well as unscheduled times of spontaneous disruption.

    Hope that helps!

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