The entrepreneur and process methods -- two ways of dealing with the problems created by a business segregated into extreme phenotypes
How can I change the world? I ask myself this question every day. It's the standard against which I measure myself, and seek to calibrate success. I admire those who've achieved this, and reserved my greatest admiration for those who try. And I know I'm not alone. Recently, however, I've started to wonder whether by glamorizing the Next Big Thing, I -- we -- have undervalued the importance and the impact of the day-to-day. Have we glorified the virtue of unrestrained ambition while minimizing the worth of structured effort?
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Let's begin with a story I first heard from the late Dr. Judah Folkman, a surgeon and pioneering medical researcher at Harvard. Folkman explained his mission by telling the tale of a man, our protagonist, who was walking by a river when he heard someone call out for assistance mid-stream; immediately, a passer-by jumped into the water to rescue the drowning person. A few minutes later, another drowning person called out, and again, a passer-by jumped into and rescued him; it happened a third time as well. At this point, our protagonist, who had been carefully observing the successive rescue missions, started to walk purposefully upstream. "Where are you going," one of the rescuers cried, dripping wet. "Aren't you going to help save these struggling swimmers?" To which our protagonist replied, "I am: I intend to find out who's throwing them in."
Through this parable, intended to highlight the role of the inquisitive physician, Folkman captured the ambition of medical research perfectly: to understand the fundamental basis of illness and use this knowledge to transform medical practice. It seems like a dead-on description of just the sort of disruptive innovation (PDF) Clayton Christensen describes.
I've always found this ideal incredibly compelling; the people I've most admired and wanted to emulate growing up were just these sorts of medical researchers, seeking to use basic knowledge to drive transformative change. And in some cases, these investigators, including Judah Folkman, have been remarkably successful -- they set out to revolutionize medicine and succeeded.
Over time, however, I've developed both a greater skepticism of the transformative potential of much of the basic research that I've seen as well as a deeper appreciation for the people who are actually jumping in the water day after day to rescue the drowning swimmers. If you were to add up the contributions of the two groups over the course of a career, I suspect most of the ambitious physician-scientists I know will wind up contributing only marginally (at best) to the practice of medicine, while the clinicians will have steadily (if perhaps incrementally) impacted thousands of lives.
The familiar partitioning in medicine into those who set out to change the world and those who aim to perform their daily tasks with excellence seems intrinsically unhealthy, and to the extent that the medical community has implicitly endorsed this mindset (perhaps as a consequence of what geneticist Richard Lewontin famously described in the New York Review of Books as our fetishization of DNA, and by extension molecular medicine and the reductionist approach in general), it has contributed to the problem.
Historically, many of the most important innovations, inside and outside of medicine, have not come from a separate class of researcher-kings, but rather from the men and women in the arena, and in particular from clinicians struggling to understand and help the patients in front of them -- something Folkman himself (a practicing surgeon for most of his career) keenly appreciated.
Perhaps, as medicine recognizes the limitations of the preclinical models, and returns the focus of medical science to the patient (see here and here), we will look with greater respect upon those physicians who've never left the bedside -- and we'll work intensively to find ways to leverage their knowledge and share the benefits of their experience.
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The tension between self-conscious innovators and incremental executors pervades the business world as well. We tend to embrace the innovators -- the entrepreneurs -- of course, and thrill to their narrative. I certainly do. But as David Brooks has pointed out in a 2009 op-ed I've often cited and continue to wrestle with (mostly because I believe it's correct but wish it weren't), most successful business leaders aren't disruptive thinkers, nor are they compelling, self-aware protagonists. They're meticulous, methodical, detail-oriented people who seem to genuinely embrace process and highly-structured thinking: I seriously doubt most entered business to make a dent in the universe, but rather because they found a business function they enjoyed, and an environment in which their particular attributes were recognized and rewarded.
Arguably, most current pharma leaders aren't disruptive thinkers, but careful, deliberate, incremental ones; while many critics have blamed this leadership style for the many challenges the industry faces, I've started to wonder if you could construct an equally powerful argument that this careful, incremental thinking has also permitted the industry to continue to survive financially in the near-absence of any profound, disruptive innovation, and in a global environment that's increasingly sensitive to rising health care costs.
I suspect that, just as in medicine, the distinction between deliberate innovator and dutiful incrementalist may be overstated in business as well. While we celebrate (as we should) the self-described entrepreneurs, we may not give adequate credit to those who've managed to get a large organization to pivot in a useful and impactful fashion -- and pivot not because these leaders were determined to change the world, but because it seemed like the right business decision at the moment.
Similarly, we adore the out-of-the-box entrepreneurs, yet tend to underappreciate the amount of tedious and, yes, deliberate work that's often required to go from an original inspiration to a successful business -- a point Mullins and Komisar emphasize in their well-grounded book, Getting to Plan B. Even the success of Apple depended not only on the inspired vision of Steve Jobs but on his relentless execution, and mind-numbing attention to price, timelines, and detail.
Perhaps the lines between these two models will continue to blur. Certainly, deliberate leaders can discern the appeal of a broader purpose; I'm not aware of a single CEO that hasn't tried to cast their work -- whether selling soup or servicing widgets -- in a more mission-oriented light; they've seen the way business-school graduates flock to companies that have defined themselves as innovators in this fashion. Conversely, I suspect that the venture community will continue to prize not the entrepreneur with the boldest dream but rather the team that seems most likely to execute against a compelling vision.
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It seems strange to segregate business achievement into two extreme phenotypes -- disruptive entrepreneur and process-hound -- but I suspect there's a good reason for this: certainly in biopharma, and I suspect in most other areas of business, success requires managing an overwhelming amount of uncertainty, and dealing with a shocking number of unknowns. As Daniel Kahneman discussed recently in the New York Times (in a piece adapted from his current, long-awaited book, Thinking Fast and Slow), a lot of the decisions you need to make in the course of running an enterprise are not rational, not what might be termed evidence-based. Everything from deciding who to hire to knowing what product to work on or what strategy to deploy -- if you look carefully at the data, and are honest, there's really little basis for decision making at all. Thus, if you try to look at a business rationally, you'd freeze, paralyzed by the disconnect between information available and choices that you need to make.
My hypothesis is that there are two principle ways of dealing with this problem: the process method and the entrepreneur method. The process method -- which is what most management consultants, investment banks, and CEOs do, is to essentially borrow a technique from economics: they assume a can opener. That is, everything would work so much better if you could believe in projections, in spreadsheets, in detailed methodologies for acquiring talent and developing forecasts -- and so you go ahead and believe in them. While most leaders attach the requisite qualifiers (my favorite from consulting is "directionally correct"), my experience is that most senior managers believe in the system, believe in the process -- they're not suspending disbelief, they believe. Because once you believe, everything starts to move, everything starts to progress -- the whole system works. And since everyone else is doing basically the same thing, even if you are entirely wrong, at least, as was the case with stock analysts projections (see my review of The Black Swan, here), you won't be alone.
The entrepreneur method, by contrast, relies on the conviction of a motivated leader to believe that they can change the world, screw whatever the data might say. The analogy in medicine is the so-called "clinical champion," as described in this wonderful classic article (abstract only) by Flowers and Melmon. These advocates have in their corner many well-studied examples of disruptive innovation.
Unfortunately, these two world views are frequently at odds. As Clayton Christensen and his colleagues have shown (PDF), the benefits of disruptive innovation are systematically undervalued by just the sort of analyses generally used by process hounds, and by definition are initially more expensive than conventional approaches. Thus, disruptive innovators have a difficult task in most organizations, and I'm aware of very few examples where success has extended much beyond a commitment on a press release (an actual outcome I recall from my consulting experience).
Conversely, disruptive innovators might enjoy positioning themselves as fighting the system -- but not only does success require remarkable attention to detail that generally includes tenuous revenue projections and market forecasts, but if you're successful, you then need to scale, and, pretty soon, you may find yourself in need of just the sorts of the processes and approaches you have to this point conveniently despised.
In my view, this tension is not just inescapable, but also healthy. My heart, of course, remains with the disruptive innovators: I continue to wake up every day and ask how I can change the world. But with experience, I've also developed a more nuanced and considerably more expansive view of what real change requires, and recognize the range of talents and perspectives that must be integrated for durable change to be achieved.
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