CHAPTER 4

From Manager to Maestro

If the highest aim of a captain were to preserve his ship, he would keep it in port forever.

—Thomas Aquinas

On December 9, 2020, SpaceX’s prototype Starship rocket exploded on impact as it attempted to land. The $200 million unmanned rocket was gone in a flash. Instead of lamenting the explosion or making excuses, SpaceX CEO Elon Musk gushed with enthusiasm over the test results. In a Tweet, he spoke of the “Successful ascent, switchover to header tanks and precise flap control to landing point!” After bulleting what they had learned from the catastrophic landing, Musk Tweeted, “Congrats, SpaceX team, hell yeah!”¹ That is the mindset of an organizational velocity (OV) leader! For Musk, the Starship crash was not a failure. What they learned would instruct their next attempt. More importantly, he made sure the team put their heart and souls into this prototype and came away with a sense of accomplishment that would motivate them to keep trying until they got it right. It was a small thing, but it made all the difference to the team. Laying into the team on Twitter would have thrown sand in the gears of OV. Instead, Musk bathed the gears in oil.

Major General John Shaw, the first head of the U.S. Space Force, faces the daunting challenge of designing a new organization for a new service. The principles of OV are embedded in the cornerstones of his plan: “increased flexibility, being able to move at speed ...” The Space Force is driving decision making to the lowest practical level to empower managers to make intelligent, risk-prudent decisions but take sufficient risks so they can move forward.² Time will tell if Shaw can slice through the bureaucracy, but the mindset of leadership is in the right place.

This common saying is often true of leaders in large, incumbent organizations. Executives tend to hem and haw when it comes to piloting new ideas. Still, when success arrives, the resumes of those in and around the innovation all include some version of “Created the product concept and led the innovation team resulting in $500MM of new revenue.”

There are no bystanders, however, in an incumbent organization that manages to create disruptive innovation. The leader who brings about the change has a steely sense of conviction. A good example comes from the leaders responsible for launching Hulu, the premium streaming service. The innovation was an unlikely alliance between Fox News Corp and NBC.

Peter Chernin drove the disruptive innovation from the News Corp side, while David Zasloff did the same at NBC. Neither was the CEO at their respective entities. Rupert Murdoch was still the CEO of News Corp., and Jeff Zucker was the CEO of NBC. But both Chernin and Zasloff ran the innovation gauntlet with a fierce conviction. Zasloff, especially, had a large personality who, according to those present, would literally pound his chest and say, “This [the Hulu initiative] is a billion-dollar idea. It’s going to happen.”⁴ Jeff Zucker was fully supportive of David Zasloff, and Rupert Murdoch fully supported Peter Chernin, the COO of News Corp.

Executives like Chernin and Zasloff often wait out their entire careers for an idea like Hulu. Then, when they find themselves in a situation where disruption presents an opportunity, they recognize it’s their big chance. And they become an immovable force. That is, they refuse to back down from driving the change. They place themselves at the center of the chaos churned out by change and take the calculated risks to keep moving forward. Jack Kennedy, who served as Executive Vice President of Strategy and Corporate Development at Fox Interactive Media at the time, described the leaders as being “singularly capable of permitting the big chaos required while not being overrun by internal obstacles.”

I used to think that change came from the top management team, and I was 100 percent wrong. It comes from what can only be described as an immovable force whose conviction overcomes the inertia and resistance endemic in large entities.

Innovation rarely, if ever, is led by the CFO, the CMO, or even the CTO; it’s typically the CEO.

Chernin and Zasloff were CEOs of their respective divisions and believed that Hulu could not be a joint venture between News Corp. and NBC; it had to be a separate company. The parties agreed to take capital from a third-party investor with expertise supporting growth companies. Doing so would ensure the company was run with a fiduciary responsibility to itself and not to its partners. In some respects, the decision to separate Hulu as a standalone business inoculated the innovation from the drama of senior management of News Corp. and NBC. It otherwise might have been a train wreck.

Chernin and Zasloff exemplified the traits that create OV. Their brand of leadership can move at a faster tempo amidst the chaos. Their conviction compels them to develop fast-forward buttons for their organizations. These leaders set up their teams to sort through the data at a faster clip (with greater access to data); to move forward at a faster tempo (with higher spending authority); to take educated risks (with compensation tied to new revenue streams); and to continue to learn as they encounter resistance and roadblocks.

Narratives that Matter

While the “fail fast” cliché may make for a snappy slogan at the corporate retreat, the tempo itself creates the risk of chaos, which often causes leaders to trumpet one thing but act differently. For example, at UPS, we had a slogan (for a while) called “moving forward fast,” a phrase emblazoned on marketing and investor materials. Once, in front of the CEO in a meeting, I said, “I love the slogan ‘moving forward fast.’ It’s exactly what we need to take the next steps on this project. It will help us move forward fast.”

“Whoa, whoa, whoa,” he said. “Yes, forward fast, but not too fast!”

The CEO had just signaled to everyone in the room that the slogan was just that: a slogan. It wasn’t meant to be acted on and lived out. The CEO’s reluctance comes from a common belief among leaders—that too much movement too fast creates chaos. And, in reality, living out the “forward-fast” slogan will create a modicum of chaos. However, the most distinctive characteristic of an OV leader is the ability to inspire and align the team through words and actions—even if it kicks up a bit of chaos. This characteristic is captured in John Boyd’s term borrowed from the German Army, schwerpunkt, which refers to the main focus. For OV to take hold, the CEO must articulate a main focus that is more than simply values, goals, and objectives. Schwerpunkt is a doctrine about how the firm will engage its markets and monitor its threats. Schwerpunkt lays out the goal and provides the boundaries within which everyone in the firm is free to act. The doctrine sets guidelines for decision making—one that gives permission to act within boundaries toward the same goal.

Consider UPS’ latest doctrine under CEO Carol Tomé, “better not bigger.” In her first seven months, Tomé raised rates, limited capacity for larger shippers who exceeded their volume forecast, cut capital expenditures by about $2 billion, sold the lower-margin less-than-truckload (LTL) business, and offered voluntary separation packages to over 11,000 non-operations employees. “Better, not bigger” became UPS’s schwerpunkt not when it was a talking point, but when it was acted on. While I argue that UPS does not yet espouse the doctrine of a Forever Company, there is no doubt that the “new sheriff in town” has aligned the front lines around the new vision. A salesperson no longer has to wonder whether to sign a deal that offers lower profit margins but large volumes. The doctrine is clear: volume at all costs is no longer acceptable. Clear doctrines save sales time in identifying target accounts and negotiating deals. Vague doctrines (e.g., “growth is our top priority” or “focus on fundamentals”) cloud decision making and slow down OV.

A key success factor for organizations is the people on the field of battle (closest to the customer) knowing what to do; the doctrine helps them make the best decision for the organization based on the current context and their personal judgment. Think of a flock of starlings. They exhibit a rare combination of speed and scale. The birds coordinate themselves with remarkable agility to find food and avoid attacks—with no apparent leader. Instead, each bird ostensibly follows three basic rules: (1) move to the center, (2) follow your neighbor, and (3) don’t collide. “The rules enable each bird to act independently while ensuring the group acts cohesively.”⁵

The Amazon Flywheel is a perfect example of the virtuous circle created from a clear doctrine. At Amazon, customer experience reigns supreme. The Amazon Flywheel creates a virtuous circle beginning with customer experience. A better customer experience creates more customer traffic, attracts more sellers with more products, and improves customer experience. Greater volume creates opportunities for economies of scale, which drives down prices and further enhances the customer experience.⁶ One Amazon executive put it this way, “What I find is when you start working backward from the customer, you start making decisions really differently. If you are weighing two investments, should I invest in reverse logistics or invest in brokerage. You would ask, ‘Which one is driving customer experience versus driving cost out?’ You would pick the higher customer experience option, and that would answer the question.” A clear schwerpunkt reduces the ambiguity that creates friction that slows down OV in a firm.

Guardrails of Conviction

Leaders can live out their OV slogans only when the slogan becomes an actionable doctrine for those at the front lines of an organization. Ben Baldanza is an OV leader. I crossed paths with Baldanza, the former CEO of Spirit Airlines when UPS hired him to help translate yield management strategies designed for the airline industry to the package delivery industry. While that effort was unsuccessful, his career was just the opposite. Baldanza transitioned through several airline leadership roles to eventually take the helm at struggling Spirit Airlines. He joined Spirit Airlines the year after the fledgling carrier lost $80 million.⁷ Spirit’s schwerpunkt needed a dramatic overhaul, and Baldanza brought it when he was promoted to CEO in 2006. Five years later, Spirit earned 40 percent more per airplane than any other U.S. Airline.

The public saw a trade-off between super low fares and packed flights (with one less lavatory to allow for more seats), high baggage fees, and extra charges for everything from boarding passes to peanuts. Business passengers fled, but leisure travelers flocked to the airline. Spirit now had an identity. It knew what it was, and just as importantly, what it wasn’t. Baldanza used to joke that he would someday walk into a Chick-fil-A and scream, “What do you mean you don’t sell hamburgers here!”

What the public did not see, however, is what made Baldanza an OV leader. Baldanza said, “People would ask why our model was not replicable, why someone couldn’t out-Spirit Spirit. I said they could have the planes, and they can charge for bags and things like that. But I don’t believe most airline people have the conviction we have. I felt conviction was our biggest corporate culture asset, conviction that we were doing the right thing. We used to say that we had very clear mirrors in our building, meaning we knew exactly who we were and who we weren’t.”

That conviction started with the CEO, but it didn’t spread on its own. When Baldanza became CEO, there were 23 officers at Spirit. A year later, there were 12, and none of the original 23 were part of the 12. “You’re either on the train,” said Baldanza, “or you need to get off the train.” So he lured top talent with the opportunity for significant equity growth and gave them the authority to make the necessary changes to become the ultra-low-cost leader.

Spirit’s conviction to economic efficiency permeated every corner of the organization. Baldanza had executives cover the cost of their business cards through sponsorships by local businesses featured on the flip side of each person’s business card. He took this low-cost approach so seriously he even developed corporate partnerships to cover the costs of special building projects. Spirit boasted an Airbus room, a Pratt and Whitney room, and a Lufthansa boardroom. This conviction had a stunning impact. As vendors tried to squeeze him in negotiations, he would refer to his business card: “If I won’t pay for my business cards, what makes you think I’ll pay for your increase?” Baldanza says, “Understanding who we were, what we were about and having a strong conviction around that—it’s what changed that whole company.”⁸

The development of Hulu discussed earlier is another example of conviction. Current CEO of Platform Science and former Fox Interactive Media executive Jack Kennedy recalls the conviction of News Corp. COO Peter Chernin in the early days of Hulu. The naysayers were everywhere, calling the startup “Clown Co.”⁹ However, his conviction kept the idea of Hulu alive while new partners came on board, and previously intractable problems, such as how to split profits between the platform owners and the content providers, were solved.

There is one crucial caveat to conviction. Ignoring changes in the external environment to keep up a façade is not conviction; it’s ignorance or foolish pride. While Spirit’s Ben Baldanza saw conviction as a corporate asset, some ancillary products they tried didn’t work, so he reversed them. Alternatively, some ancillary products proved more effective than they thought, which changed their plans on ticket price reductions.¹⁰

Sense and respond; it’s the OV way.

The Missing Jewel: Risk

Many executives survive the climb up the corporate ladder because of their expertise in risk mitigation. They’ve seen others get knocked off the fast track by one public misstep. While at UPS, I took on many speaking gigs outside the company; I loved doing them. Most executives avoided such engagements. Their reasoning was the risk/reward. They saw only the risk of saying something that landed them in trouble and undervalued the greater good to tell the company’s story.

Prospect theory describes the way people choose between alternatives that entail risk, when the probability of outcomes is known.¹¹ The theory explains why people buy insurance, pay a premium above the expected loss, and participate in lotteries, with a negative expected value but tremendous payoff. The value function (for example, speaking on behalf of the company) is steeper for losses than the gains, indicating that losses outweigh gains in executives’ minds. Their desire to avoid loss exceeded their desire to secure gain.

Executives become executives in part because of their aversion to risk. This aversion only increases with time as they near the apotheosis of their careers. What CEO wants to end their career taking on a risk that fails?

I interviewed Chuck Adair, a former Vice Chairman for BMO Capital markets who sits on several publicly traded companies’ boards, calling this phenomenon “runway bias.”¹² Executives, late in their careers, tend to paint too rosy a picture of the future. Runway bias refers to the short runway that senior executives have that distorts their thinking about the future. Executives in their early sixties, with only a few years to retirement, avoid envisioning a scenario in which their tenure ends badly. Their power, their prestige, their ego, the esprit de corps among the senior team—it all keeps them from facing reality. Their bias prevents them from looking out far enough and clearly looking at the facts. They “feel” their short runway and back away from taking risks.

Essentially, most executives are no different; they are more afraid of loss than motivated by gain. An ambiguity-averse individual would instead choose an alternative where the probability distribution of the outcomes is known over one where the probabilities are unknown.

This leads us to the larger question. What’s the actual governing narrative of the organization? Companies trumpet their mission statement, but often it’s the less-explicit subtext of efficiency (and consequently profit margins) that drives the story. When UPS was still the American Messenger Company, its founder, Jim Casey, challenged his employees: “Are we working for money alone? If so, there is no surer way not to get it.”¹³ Any organization whose default narrative is efficiency only (maximizing shareholder value only) will struggle to create a culture of OV.

Larry Fink at Blackrock believes that companies must serve a larger social purpose and that long-term shareholder value is accomplished by having a sense of purpose. BlackRock went public in 1999 at $14/share and eclipsed $600/share in August 2020 at the height of the COVID-19 pandemic.

Amazon famously told investors that they would prioritize long-term customer growth over near-term profits right from the start. In his 1997 Letter to Shareholders, Jeff Bezos wrote:

Amazon would never focus on profits or shareholder returns directly, Bezos explained. Instead, it would focus 100 percent of its energy on building value for its customers. Much of Wall Street, of course, was skeptical of the still-unprofitable company that had just gone public. Amazon didn’t pay dividends and didn’t seem to care about becoming profitable. This singular act of conviction that it would not focus on profits gave Amazon a “pass” on Wall Street that no other public companies enjoy.

More amazing even than Amazon’s ascendancy is the question, “Why hadn’t anyone thought like this before?”

Between 1995 and 2018, in Amazon’s Letters to Shareholders, the word “customer” (or “customers”) appears 443 times, which makes it the most common word in all 23 letters by far (omitting words like “and” or “the,” for example). By way of comparison, the word “Amazon” appears 340 times. Comparatively, “shareholder” and “shareholders” get a total of 53 mentions. Add investor and investors, and it’s another eight. “Competition” and its derivatives appear just 28 times across 23 letters. And quite a few of them aren’t really referring to competitors; they’re some variation of “Amazon’s competitive advantage is …”¹⁵

Clearly, the center of gravity of Amazon is the customer. Not efficiency. Not profits.

Freedom with Limits

Even today, most large organizations are run top-down. They are the antithesis of responsive and agile, two characteristics of younger, Fourth Industrial Revolution companies that eat away at the edges of today’s incumbent companies. No one is advocating for the WeWork style of laissez-faire management with a work culture more akin to a rock concert—indeed, I’m not.¹⁶ But OV at its best is coordinated action—with significant autonomy and responsibility pushed to the edges of the organization. Only the CEO can create this kind of environment— establishing the expectation that all of us are better than any of us.

Of course, this requires a degree of trust. The trick is understanding what needs to be controlled and what does not. Finances cannot be controlled at the edges because employees only have a limited view of the organization. They see the tail and not the elephant. Much of decision making, however, is best done at the edges. Today’s corporations need more balance. Efficiency is important but not sufficient. Companies need to be constantly evolving, which means they are in an exploration phase 24 × 7 × 365. This requires talented individuals to be able to act with freedom but within boundaries. With financial controls, the challenge is where to draw the line on spending authority. The less the authority to spend, the more suffocating the environment will be. The greater it is, the more the company is exposed to rogue employees. Deciding where to draw that line is one of the most critical decisions that the senior management team will make. Wherever the line is drawn, it must be at a place that gives those at the edges freedom to explore and take some calculated risks.

In this chapter, I argue that only the CEO can create a responsive culture that fosters OV. In that sense, only the CEO can create and shape the doctrine that pushes decision making to the edges of the organization. I interviewed an Army general who changed how he saw his role as he advanced in his career:

When a leader moves from being a taskmaster to a gardener, he creates an environment of freedom, and the organization becomes more flexible. This is the essence of OV. Of course, there is always the danger that a well-functioning corporation can be set on the wrong target. Organizations must pivot as they learn.

The Boomerang Effect

OV leaders bring out the best in their people and give credit to people whenever appropriate. A universal phenomenon that I’ve witnessed in my career and personal life is what I call “The Boomerang Effect.” You can’t give away credit, support, and love—if it’s done sincerely, it will come back to you. In a 1959 plant managers conference, UPS CEO Jim Casey said, “Once the people you deal with come to recognize that what you do springs from an honest heart, they will be surprisingly strong in their support for you. They will believe what you say. They will do what you want. They will give you their loyalty. They will trust and follow you.”¹⁸ That is the essence of an OV leader.

Executive training too often cripples effective leaders, so they can’t pivot. Leaders internalize the axiom, “If you give up too soon, you’ll look weak,” even if they know that their choice or direction is wrong. Giving up will make it look like their judgment is off. So, instead of pivoting, they march down an inevitable path of doom. Perception drives so much of corporate decision making. I once interviewed David Kidder, co-founder and CEO of Bionic, who captured the essence of the problem: “Your executives are lying to you. And it’s your fault as a CEO. Because you’ve given them no choice.”¹⁹

Let’s say, for example, an executive requests $500,000 for a project with a certain intended outcome. Six months later, she says, “Based on what we learned, we shouldn’t be heading this direction. We should be heading North, not Northeast. We need another 30 percent in funding.”

This is the response she would probably get:

If she responds, “We didn’t know that at the time,” she is dead in the water. And so is the project. If her project needs to be revectored and funded accordingly, her tacit goal will not be to create constructive dialogue and debate. Instead, she will spin the presentation as best as she can and get the hell out of there, hopefully unscathed. Everyone in the room will follow the CEO’s lead.

An OV CEO might respond with these words: “So you were expecting to find this, and you found that. Why did you find that? Okay. So, based on that finding, what do you know now that you didn’t know before? And how is that going to impact what you do next? Okay. Well, tell me what you recommend then. Okay. Well, that makes sense.”

And then the CEO adds, “This is a learning journey.”

The leader must clarify that this is not learning for learning’s sake but in pursuit of a focused outcome. The CEO sets the tone. If she doesn’t, the sharks around the table will smell blood; the project will collapse and leave the manager scarred. All the forward-fast and failing-fast rhetoric is out the door. As long as the project fails due to information that was not known prior or should have been known, OV allows for and even expects the target may not be hit on the first try. Or potentially, the second and third. Leaders should not fire anyone for missing the mark, as long as each attempt gains new information that gets closer to it.

So what should be considered a failure? If the manager in the above example wasn’t able to answer the leader’s probing questions, that’s a failure. The manager is looking at a transfer or demotion. An egregious (ethical) failure would warrant termination.

On the other hand, if she were able to say, “This is what I’ve learned. This is how I have to pivot to stay on course towards the goal,” an OV leader would applaud her.

As I have argued in previous chapters, the data for hitting the target doesn’t exist yet in these projects. If the data did exist, the organization wouldn’t be funding the pilot or proof of concept. The nature of “pilot” and “proof of concept” is that the data hasn’t yet been created! There’s no failure if the first proof of concept doesn’t pan out. That’s normal. That’s expected. Perhaps the only other way to fail in a pilot is to set up the test in a way that doesn’t enable the team to learn.

Learning and pivoting demands that a leader becomes a gardener: nurturing an environment of freedom to make decisions and to have access to data.

The Humility Requirement

Flexibility and the ability to learn after a miss is often a corollary of humility. For an executive, humility is, in part, an openness to listening to what he or she doesn’t want to hear. Listening begins with curiosity: “Tell us about what you learned?”

In chapter 3, I told the story about researching a new technology offering while at UPS. The original idea was to create new revenue streams from technology that UPS was already providing its customers. My conclusion was that, based on the findings, “as long as the offerings come from UPS, our customers believe they should be part of the value proposition.” I proposed a spinoff company, but the response was, “That’s not our business. We’re a shipping company, not a software company.”

The leadership’s decision made complete sense in the pre-Fourth Industrial Revolution, pre-Cloud world, in which defending the castle (shipping) was the highest priority. Looking back, UPS missed an opportunity to create logistics software, one of its core competencies. Many leaders struggle to pivot, afraid to risk. There’s an escalation of commitment. When a manager presents, “We set out to find this, but we discovered that it is not going to work that way. We have to pivot this other way and get more funding to test whether the pivot could even work.” Sooner or later, the CFO or COO is going to say, “We believed you last time. Why should we believe you this time?”

The crux of disruption is the difference between what should happen and what does happen.

It takes gritty leaders willing to risk their reputation, not knowing what the outcome will be. Leading disruption requires a humility that emanates out of something more than status or power. Both of these are fleeting. OV leaders hire similarly willing people to risk and be humble— elements of a renaissance leader. I interviewed Mark Kvamme, a venture capitalist, who hired people based on their humility and ability to take on risks. When vetting a person for a partnership with his VC, he would ask, “What is the biggest risk that you’ve taken?” One interviewee responded with something like, “I had offers to Harvard and MIT, and I decided to go to MIT.”²⁰ It was clear the person had no concept of risk.

Another applicant answered the same question this way: “I was accepted to MIT, and I was accepted to this tiny little college in Indiana specializing in insurance actuary. I wanted to be an insurance actuary, so I said no to MIT, despite its unparalleled reputation.” Arguably, it was a riskier move going to a no-name school. But it showed Kvamme his proclivity toward risk: “If you’re not willing to take personal risks, you won’t take corporate risks.” A hallmark of an OV leader is making bold moves— scary moves—that don’t necessarily guarantee profitable outcomes.

Founder’s Mentality

Most executives will not follow in President Lincoln’s footsteps and create a team of rivals, appointing opponents to senior teams. We tend to surround ourselves with people who think like us, agree with us, and have had similar experiences. Often, unfortunately, the fiefdom also includes people who look like us. Data and people who take opposing views are easily marginalized.

In my research, the leaders who recognized and broke out of the fiefdoms that they had created had what can only be called a “founder’s mentality.”²¹ Shantanu Narayen at Adobe and Satya Nadella at Microsoft are two examples of CEOs who were not founders but had a founder mentality. Shantanu boldly moved Adobe from selling software licenses to selling subscriptions, a controversial decision at the time. Satya was a long-time Microsoft employee who changed Microsoft from the inside out. Every organization has people with a “founder’s mentality,” pushing the envelope, going the extra mile. If leaders don’t embrace a founder’s mentality, then when their truth is ridiculed or violently opposed, they fold, or worse yet, never bring their truth to light. That’s why you see most innovation coming from founder-led companies whose leaders also have a founder’s mentality. They’re owners in the noblest sense. They created the company. They’re secure and thus bold.

A 2016 study of Fortune 500 companies showed that those companies tended to be more innovative when the founder still plays a significant role (CEO, chairman, board member, owner, and advisor). As a result, they generated 31 percent more patents, created more valuable patents, and were more likely to make bold investments to renew or adapt their business model.²² I interviewed one of the executives for Cox Communications, about a recent innovation: “Did you have to go through some committees? What was the process to move this forward?”

“We made a short pitch to the senior management,” he said, “and they come back with, ‘Yeah, let’s do it. It’s the right thing to do,’ and they moved forward.”

That move-quick-with-conviction is the essence of the founder’s mentality, and it creates OV.

The Disruptor Trifecta

I came up with the phrase “disruptor trifecta” shown in Figure 4.1 to capture the idea that a leader of an incumbent organization must possess three requirements for leading innovation. He or she must be smart, knowledgeable, and technology fluent. Great leaders have always been smart (e.g., possess good judgment) and knowledgeable (know their business). There’s a third requirement for success in today’s digital world: technology fluency.

The first two are a slam dunk for most senior leaders at incumbent firms. Too often, though, “tech fluency” is missing and designated to a “tech team.” However, leaders are blinded to digitally enabled alternatives without tech fluency, leading to a death march of sub-optimal decisions. More bluntly, many executives who should be leading their firms through the transition to the Fourth Industrial Revolution do not have the tech fluency to see what’s possible. Moreover, a 2021 research study analyzing over 1,300 large enterprises with “digitally savvy” executive teams found they “outperformed comparable companies without such teams by more than 48 percent based on revenue growth and valuation.”²³

Figure 4.1 Disruptor trifecta

The concept of tech fluency is not about senior executives knowing how to code machine learning algorithms. However, emerging technology must be understood at more than a superficial level. A good test might be whether an executive can teach a group of non-technology professionals what these new technologies are, why they are essential, and how they change what is possible.

A veteran technology executive explained the challenge facing leaders with little technology fluency: “Because of the evolution of technology … the people in charge of these businesses are facing risks that they don’t have a visceral and deep understanding of [the technology]. And they’re still in charge of all these businesses.” The challenge is to connect the business model and the technology with absolute precision. For too long, IT has traditionally been categorized as a function. Many executives don’t feel as if they need to understand the technology: “I don’t need to know how the clock works. I just want to know what time it is.” The problem is if a leader doesn’t know how the clock works, they may think that the time is EST when, in fact, it’s GMT. Leaders need to understand the context of technology, the inputs, and the alternatives and to be able to challenge assumptions.

And, yet, what aging executive has 10,000 hours to master such technology fluency?²⁴ So many of today’s leaders of innovative companies started in the tech industry or are digital natives (born after 1981). The issue, of course, isn’t that non-natives can’t learn what they need to know. Too often, the real issue is pride. Leadership doesn’t want to look foolish, ask questions, or look less than “all-knowing.” The OV leader must live at the nexus of efficiency and exploration, experience and openness, pragmatism and idealism. This is uncomfortable and belies the education and experience that propelled most executives to their current leadership roles. No MBA program can prepare any person adequately for leading amidst the Fourth Industrial Revolution. The nexus is uncomfortable because of uncertainty. Moving from what you know to the vulnerability of what you don’t is essential to leading a company to a more innovative future.

What? OV is a way of life that must be driven top-down.

So What? Command and control leaders won’t sustain an OV organization where managers have autonomy within boundaries. Humble leaders demonstrating a founder’s mentality allow employees to blossom.

Now What? Identify the people in your organization that demonstrate OV leadership qualities and put them in positions to put those qualities into action. Then, work the OV Leader Criteria (Good Judgement, Knows Business, Tech Fluent, Bold Vision, Acts with Conviction, Founders Mentality, Humble) into your hiring and promotion plans.

 

¹  M. Sheetz. December 09, 2020. “SpaceX’s prototype Starship rocket reaches highest altitude yet but lands explosively on return attempt,” CNBC. www.cnbc.com/2020/12/09/spacex-starship-rocket-sn8-explodes-after-high-altitude-test-flight-.html

²  www.nationaldefensemagazine.org/articles/2020/8/7/space-force-new-services-future-coming-into-focus

³  The saying is originally attributed to the Italian diplomat and son-in-law of Mussolini, Count Caleazzo Ciano, circa 1942.

⁴  Interview with Jack Kennedy, December 15, 2018.

⁵  M. Bonchek. 2016. “How Leaders Can Let Go Without Losing Control,” Harvard Business Review 2.

⁶  J.P. Bezos, Amazon 2014 Letter to Shareholders.

⁷  R. Walker. January 22, 2020. “If Everyone Hates Spirit Airlines, How Is It Making So Much Money?” Medium. https://marker.medium.com/if-everyone-hates-spirit-airlines-how-is-it-making-so-much-money-8c7d13472352

⁸  B. Baldanza. May 18, 2020. “CEO, Diemacher LLC, Former CEO, Spirit Airlines.” Interview by Alan Amling.

⁹  Ibid.

¹⁰  B. Baldanza. June 22, 2021. “CEO, Diemacher LLC, Former CEO, Spirit Airlines.” Interview by Alan Amling.

¹¹  D. Kahneman and A. Tversky. 2013. “Prospect Theory: An Analysis of Decision Under Risk,” In Handbook of the Fundamentals of Financial Decision Making: Part I. World Scientific.

¹²  Adair, Interview.

¹³  J. Casey. 1985. Our Partnership Legacy. United Parcel Service.

¹⁴  Amazon. 1998. 1997 Letter to Shareholders. https://ir.aboutamazon.com/annual-reports-proxies-and-shareholder-letters/default.aspx

¹⁵  B. Murphy. April 13, 2019. “I Ran the Full Text of Jeff Bezos’s 23 Amazon Shareholder Letters Through a Word Cloud Generator, and the Insights Were Astonishing | Inc.com.” Inc. www.inc.com/bill-murphy-jr/i-ran-full-text-of-jeff-bezoss-23-amazon-shareholder-letters-through-a-word-cloud-generator-insights-were-astonishing.html

¹⁶  www.newyorker.com/culture/culture-desk/the-rise-and-fall-of-wework

¹⁷  B. Garrett. February 20, 2019. “Strategic Advisor, GGS LLC, Former Lieutenant General—Deputy Commander, US Army.” Interview by Alan Amling.

¹⁸  Ibid.

¹⁹  Kidder, Interview.

²⁰  M. Kvamme. December 09, 2020. “Co-Founder and Partner at Drive Capital.” Interview by Alan Amling.

²¹  C. Zook and J. Allen. 2016. The Founder’s Mentality: How to Overcome the Predictable Crises of Growth. Harvard Business Review Press.

²²  J.M. Lee, J. Kim, and J. Bae. 2016. “Founder CEOs and Innovation: Evidence from S&P 500 Firms,” Available at SSRN 2733456

²³  P. Weill, S.L. Woerner, and A.M. Shah. 2021. “Does Your C-Suite Have Enough Digital Smarts?,” MIT Sloan Management Review 62, no. 3.

²⁴  Malcolm Gladwell’s 10,000 hour concept has been challenged, but it’s still a good metaphor for learning. http://graphics8.nytimes.com/images/blogs/freakonomics/pdf/DeliberatePractice%28PsychologicalReview%29.pdf