The Musk Disruption Doctrine Pt. 2: Launch A Product - Not A Powerpoint
Elon Musk and Thomas Weber, Daimler’s director of group research, in a Tesla Roadster in 2009
In 2009 a team of Daimler executives visited Silicon Valley as part of a global innovation expedition to explore electric vehicles. The team visited Fisker, Think City, BYD, and a struggling Silicon Valley startup called Tesla. By the time they arrived at Tesla’s Menlo Park headquarters they were exhausted and grumpy. The startup PowerPoint decks were all starting to blend together, saying the same thing about “vision,” “disruption,” and “innovation.” Scalable electric powertrains felt as elusive as before.
But Tesla’s eccentric CEO, Elon Musk, quickly changed the energy. When he came out to greet them, he asked if they wanted to test-drive an electric Smart car.
“What do you mean?” one of the Daimler team asked. He was expecting another deck in a drab conference room.
Musk explained that they’d installed the battery and powertrain of a Tesla Roadster into a Smart car, and it was ready to drive.
They stepped into the car, tapped the gas, and felt it accelerate from 0 to 60 in under 4 seconds. The normally slow and methodical Daimler team contracted with Tesla to produce battery packs and power trains for Smart cars, and invested $50 million.
This is another one of the stories that jumped out from Walter Isaacson’s new biography of Elon Musk. The book is a masterclass on how to transform industries which are stagnant and complacent.
This particular incident with Daimler stood in such stark contrast to my time as an innovation director in finance. So many times I would build something over a few days only to be paired with a team of “innovation experts” from McKinsey who spent 9 months building a PowerPoint deck to justify the continued investment in the product. The only time I was able to bypass institutionalized analysis paralysis was when I launched the product without permission and refused to do fake work. (I also usually came close to getting fired, too.) The data that went into the decks was only compelling if it was real information about a launched product rather than a hypothetical forecast about an imaginary one.
Musk, for all his extremes and flaws, understood how to bypass the obstructionism and analysis paralysis that causes big companies to stagnate.
Here are a few of the most actionable takeaways about innovating in the face of corporate resistance:
Always Assume Obstructionism
Inside a large company in an entrenched industry always assume no one actually wants to innovate, regardless of what they may have said publicly. This assumption may be proven incorrect, but you should be prepared for everyone to block you. Real, meaningful innovation means executives will lose power and prestige, their fiefdom will shrink, they will need to collaborate across silos in ways that make them uncomfortable, they’ll have to work late, and their compensation and incentives will change. This is why corporate innovation is usually conducted with PowerPoint decks, Post-It notes, and field trips to Silicon Valley and Ivy League seminars. It means no one has to actually change anything when they’re back at their desk on Monday. The best innovators anticipate the obstructionism that Musk expected to encounter with the Daimler team, and like him, they devise systems to move past it.
One of these systems is to never pitch an idea. Only pitch an outcome.
Never Pitch An Idea - Pitch An Outcome
Musk innately understood that the executives at Daimler, a powerful company in an industry which had never been disrupted by a startup, risked nothing by saying no to an idea. So he didn’t pitch one. He presented a product when they were expecting a PowerPoint. The minute they stepped inside an electric Smart car he made it more of a risk to say no than to say yes. All their skepticism (cynicism?) about whether it could or should be built was flipped on its head. Musk essentially said, “This is built, and more are coming. The only question is whether it will be built with you or against you.”
Daimler CEO, Dieter Zietsche, showing off the Tesla-powered electric Smart car in 2009.
Publicity = Accountability
Tesla’s partnership with Daimler in 2009 was the rare auto-manufacturing story that was featured in Wired as well as more obvious outlets like Car & Driver. Daimler’s CEO Dieter Zeitsche soon appeared at auto shows around the world with a Tesla-electrified Smart car (as opposed to a more established Daimler car like the Mercedes C-Class). This publicity gave Musk leverage in a partnership where he was significantly weaker than his corporate counterpart. It meant Daimler had to do what it said it would do with Tesla.
For innovators working with large corporations the lesson is clear: once you produce an outcome, go public with it. Work quickly to create public expectations and excitement about it. This creates external accountability for your company to transform and deliver.
So, if you’re innovating in partnership with a large company, here are the key lessons:
Always assume obstructionism.
Pitch outcomes, not ideas
Hold your corporate innovation partner accountable with publicity
If you need help innovating in the enterprise Sign up for my FREE 7-day course: Mastering The 7 Laws Of Innovation Power In Large Companies: https://www.punksandpinstripes.com/7daycourse
Come join me and Stephen Shedletsky, author of the best-seller Speak Up Culture on November 6th in NYC. RSVP here: https://www.eventbrite.com/e/730782689697?aff=oddtdtcreator
