Revisiting “The Innovator’s Method, 2014” written by Furr & Dyer, I found myself reflecting on the statement by Scott Cook, founder and CEO of Intuit “When MBAs come to us we have to fundamentally retain them- Nothing they learned will help them succeed at innovation.” This critique of traditional management training has been reported by several technology company leaders including Elon Musk, founder of Tesla, Space X and PayPal. The truth is that business schools train managers first and foremost to operate efficiently when a company is mature “in operation mode as described in chart 1 of my last article”. In fact, in operation mode, business uncertainties are low and, in general, the manager has the skills and useful information to predict the future of his company and the positioning that will lead it to success. Thus, the distinguishing feature of a good manager is the ability to develop “strategic” plans and make the right decisions to execute them.

Furr and Dyer eloquently explain the foundations of business school education. Everything is based on the principles of Frederick Taylor and more particularly on his famous book published in 1911 “Principles of Scientific Management”. Several industrialists of the time including Henry Ford, Alfred Sloan, etc. made Taylorism the reference method of production management, which allowed Taylor’s teachings to spread through management schools in the USA and industrialized countries. In short, Taylorism consists of a rational organization of work that is divided into elementary “standard”, simple and repetitive tasks, assigned to specialized workers. The main objective of Taylorism is to obtain the best possible productivity. The manager can thus analyze each task and optimize it according to the execution time and all the elements that go into the calculation of the manufacturing cost. The other important dimension of Taylorism is to make the standardization of tasks an effective tool to measure the performance of workers according to the objectives dictated by managers. In turn, managers are evaluated against performance parameters dictated by the company’s senior management.

Specialization and standardization of tasks have proven their worth by positively contributing to the high performance of all organizations that apply them. Nowadays, Taylor’s principles have evolved to make his methods more humane and above all more motivating. This is called post-taylorism, a term used to designate a work organization that, in various forms, allows workers to participate in production decisions. Fortunately, we are no longer in the era well illustrated by Charlie Chaplin in his film “Modern Times”! Beyond production, it is interesting to note that we have adapted to Taylorism and we live it naturally, even at the level of the organizational structures of companies. Everything is divided into specialized functions: HR, R&D, procurement, operations, finance, marketing etc. Large companies use the concept of specialized subsidiaries to offer services to targeted customers. Alfred Sloan was an accomplished manager who understood Taylorism very well. He transformed General Motors (GM) to reconfigure it into autonomous divisions specializing in different market segments: Cadillac, Buick, Chevy and Pontiac.

Entrepreneurial management

Unlike a mature company with controlled business risks, a startup, according to Eric Ries (The Lean Startup, 2011), is a human institution designed to create a new product or service under conditions of extreme uncertainty. The definition of the term startup is important because it is about developing products that are mainly based on radical or disruptive innovations. Eric Ries introduced the notion of entrepreneurial management, two almost opposite terms to underline the importance of improving management within startups. Many entrepreneurs launch startups, but unfortunately, a high number of them fail, because they apply “the wrong theory”, the one from traditional business schools. Following the evolution of a startup by applying the performance indicators of traditional management usually leads to failure. This is what Ries calls “vanity metrics”. To learn more about the lean startup methodology, I invite you to read my article entitled “The three pillars required for any innovative company “.

Paradoxically, there are many startups that have had amazing success: Apple, Microsoft, Google, Intuit, Tesla, Paypal, Amazon, Ali Baba and the list goes on and on, without forgetting the precursors of the beginning of the last century, notably the pioneers of the automobile industry, including William Durant and Henry Ford. He is considered one of the most successful entrepreneurs of all time! The big question that fascinates is to understand the DNA of this extraordinary class of innovative entrepreneurs!

Several researchers have conducted large-scale surveys to study what characterizes successful startups. The best known of these researchers are Clayton Christensen, Jeff Dyer, Tom Kelley, Michael Raynor and Eric Ries, to name a few. Of course, it would be difficult to summarize in a few lines the numerous articles and books published on this subject. However, researchers agree that innovative entrepreneurs think differently than the average person! In “The Innovator’s DNA” published by Dyer, Gregersen and Christensen in 2014, we learn that these researchers conducted their work over a period of 8 years with 100 innovators and company founders who were at the origin of revolutionary products resulting from disruptive or radical innovations. Researchers have discovered what they call the innovator’s DNA. This DNA is composed of 5 important skills: (1) the intellectual ability to associate “or connect” ideas together, (2) curiosity, (3) observation, (4) networking to learn new things and (5) experimenting with new ideas.

You will surely agree with me that the 5 skills mentioned evoke the profile of a scientist who spends his time thinking and exchanging ideas with others and experimenting to discover and learn new things! This approach is completely in line with the “Lean Startup” methodology. Of course, this type of management goes against the general opinion of traditional managers and entrepreneurs who advocate the execution of plans to run an organization efficiently! YES, the traditional ones are right, because they have been trained to operate mature organizations with all processes under control and problems well-defined and characterized by low risk. Obviously, every startup aspires to become a mature company and this transition goes through the process of maturing its offer and increasing its sales. An important responsibility of the management team is to face the challenges of success. The organizational culture must change from one of experimentation to one of execution. The management team MUST adapt to a new management style to support the company’s growth.

Figure 2 shows the transition of the maturity of a product according to the required managerial skills. The dotted vertical line indicates the boundary for switching from entrepreneurial to traditional management. In light of this figure, it is understandable why some entrepreneurs are shown the door by their company’s board of directors if they do not make the mental/competency transition to keep up with their company’s evolution. The most famous case is that of Billy Durant, the founder of General Motors, who was replaced by Alfred Sloan.