My Story: The Corporate Rebel Model

Today everyone uses innovation teams. But innovation teams don’t create the breakthroughs that drive growth. I set out to find a solution.

Hiker in the woods heading towards a large mountain.
Photo by Ali Kazal

There are several prominent innovation models. The Lean Startup model, Disruptive Innovation, Blue Ocean Strategy, and the like. But none of these theories have proven successful in practice. Countless corporate innovation teams have put the theories to work. Not a single billion-dollar breakthrough.

I set out to create a better model. Here’s the story.

Silicon Valley startups

I did 3 Silicon Valley startups. Startups are the polar opposite of big companies in how they innovate. Startups are all about entrepreneurial initiative and decentralized innovation. Big companies are all about top-down decision-making and centralized innovation. I have always rejected the idea that it has to be this way.

U.S. Marine Corps

Before Silicon Valley, I served 4 years in the U.S. Marine Corps. The Marine Corps is not exactly a bastion of innovation. It’s hard to imagine a more top-down, do what you’re told and only what you’re told organization in the world. Yet despite this, I found a way to innovate. Even better, I was the lowest ranking person in the entire department. One day I bumped into a problem that I thought was crazy. I could have swept it under the rug and forgotten about it. That’s what people in my role had been doing for 30 years. After all, when you bump into a problem that isn’t your fault, but you might be blamed anyway, you don’t normally run to tell your commanding officer about it. Not if you can avoid it. You’re more likely to get into trouble than to win accolades. But I decided I couldn’t just ignore it. I had to do something. It was causing real problems and hurting real people. I wanted to figure out what was going on and find a solution. So I quietly started working on it. I still did my regular job. But I also worked on my unofficial skunkworks project, whenever I could free up some time. Five months later I had revamped the process and fixed the problem. My commanding officer learned what I had done, and I was awarded the Navy Achievement Medal for innovation leadership. The highest non-combat medal awarded to junior enlisted personnel.

Big companies

After Silicon Valley, I got my MBA and went to work for big companies. My idea was to bring an entrepreneurial approach to change+innovation. Less top-down. More nimble. The way it works in Silicon Valley. This turned out to be very successful. I led a turnaround at Millennium, and a Fast Strategy transformation at Best Doctors. But I wanted more. These projects were focused on decentralized execution of the proven business model. What I really wanted was decentralized innovation. Not just any innovation. Breakthrough innovation. The breakthroughs that create billion-dollar growth engines.

Freedom-Based Management Models

So I started reading everything I could find on Freedom-Based Management Models. The idea behind these models is simple. Wherever you have managers, you have bureaucracy. Since bureaucracy kills innovation, you need to get rid of all the managers and create truly self-managed companies. The often touted success stories include WL Gore, Semco, Morning Star, FAVI, and Valve. Gary Hamel laid out the vision succinctly in his Harvard Business Review article, “First, Let’s Fire All the Managers.”

My problem with this vision is it didn’t seem at all realistic. There was no way this model was going to take over the world. Most of the companies that tried self-management couldn’t make it work. Even Zappos under Tony Hsieh failed to make it work. And the “success stories” were seldom what they seemed.

Bureaucracy isn’t the problem

For all the bad press bureaucracy gets, it turns out to be incredibly good at reliable, efficient execution of a proven business model. Since that is the primary focus of every successful business, bureaucracy has a lot going for it. The problem isn’t bureaucracy. The problem is the lack of decentralized innovation to go alongside bureaucracy. 

Towards a solution

I realized that the unofficial skunkworks project I did in the U.S. Marine Corps might be a solution. Companies could keep their management systems exactly as they are. But also enjoy all the benefits of decentralized innovation. The challenge was how to get enough employees to do this. It turns out, not more than 1 in 1,000 employees launch unofficial skunkworks projects. They may want to. But it feels too risky. So they do nothing. The potential is there. But it rarely turns into anything more than an idea in someone’s head. Big companies would need a lot more employees launching unofficial skunkworks projects to make it a viable innovation model.

So I set out to find a solution. Find a way to go into any company and get 5%, 10% or even 20% of employees to launch unofficial skunkworks projects. That would change everything.

The Hero’s Journey

The solution is built into the most famous storytelling model in the world. The Hero’s Journey by Joseph Campbell. It explains why most employees do nothing when they bump into a problem or opportunity. Even though they want to. They get stuck in the “Refusal of the Call.” In the Hero’s Journey, we’re dealing with an unlikely hero. Someone who isn’t supposed to save the day. Facing a daunting challenge. Up against terrible odds. Full of fear and insecurity. In rare cases, they can muster the courage on their own. Set out on the journey into the unknown. But in most cases, they need some help. To use a Star Wars analogy, you need an Obi-Wan Kenobi for the Luke Skywalkers in the company (unlikely heroes of ANY gender). Without an Obi-Wan Kenobi, the Luke Skywalkers never set out to save the universe. Even when the CEO makes it official company policy to allow unofficial skunkworks projects, it feels too risky without a catalyst.

Obi-Wan Kenobi

If you want corporate rebels, you need an Obi-Wan Kenobi. That is the epiphany that turns the corporate rebel model into a viable innovation model for big companies.

It’s important to understand that if an employee can win approval for their project upfront, they won’t become a corporate rebel. They will go the official route. But those are not the projects that become billion-dollar breakthroughs. Breakthroughs come from the crazy ideas that nobody likes, until they work. They take people by surprise. This is why the first step cannot be for employees to get permission to work on their ideas.

3M’s Obi-Wan Kenobi

It turns out, 3M happened upon this model in the 1920s. Decades before their famous 15% rule. It transformed 3M from a 23-year-old sandpaper company into one of the most innovative companies on the planet. Dick Drew was 3M’s original corporate rebel, and he played the role of Obi-Wan Kenobi. He inspired an entire generation of innovators at 3M. They created breakthrough after breakthrough. Unfortunately, 3M didn’t understand the model. After Dick Drew retired, 3M’s corporate rebels disappeared too. Later 3M launched their 15% rule. But it has never been very successful in creating growth. It violates the dynamics that make corporate rebels so successful.

Corporate rebel model

That’s the story behind the corporate rebel model. Corporate rebels have been spectacularly successful at creating billion-dollar breakthroughs in big companies. It’s how Gary Starkweather created the laser printer at Xerox. Shuji Nakamura created LED lighting at Nichia. Gary Klassen created BlackBerry Messenger at RIM. And so much more.

For the past 100 years, corporate rebels have been the most successful innovators in big companies.

Thanks for reading

This series explores the corporate rebel model, and what the history of breakthroughs is trying to teach us.

I’d love you to join in the discussion below.

Kind regards,

Jim Verquist

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