so in 2004 I quit my job and I had
followed a fairly traditional corporate
career path until then I studied finance
and engineering and worked in investment
banking and then got my MBA here at
Columbia and I was then working at a big
consulting firm and I love my work and I
love the people that I worked with but
two things happen in 2004 the first was
that I got clear on what my purpose is
and it’s that people love what they do
and the second thing is I wrote my first
book and it took me seven years to write
this book and I didn’t know if I was
gonna write another one so I wanted to
make sure that I got the most out of
this moment and I remember sitting in
the office of my with my manager
explaining what my passions were and
what I wanted to do and asking is there
a way that we can somehow incorporate
this into my work at the firm and he
explained to me very nicely politely but
clearly they would be happy to support
me as long as I did it on my own time so
I quit and I became an entrepreneur that
kind of made sense that I would have to
become an entrepreneur in order to do
what I wanted to do we kind of have this
idea that it is entrepreneurs that are
the innovators and a lot of people will
support this view that you just cannot
change the world you cannot impact
things from inside established
organizations Clayton Christensen the
Harvard innovation guru that coined the
term disruptive innovation he says that
it’s very decision-making and resource
allocation processes that are key to the
success of large organizations that
hinder their ability to accept
disruptive innovations and John Hagel
another innovation guru he talks about
innovation antibodies that emerge around
new ideas where they’re introduced
inside an established company and so
there’s a lot of support for this view
that really the innovator is this person
their story is remarkably similar why
they’re all white men is a topic for
another day but let’s break down their
story some time in college they get a
big idea they leave college sometimes
before they finish
go to the west coast with that idea and
they step into a garage there a couple
people there with him we have the hacker
we have the hipster we have the hustler
and they build this solution and then
they launch a company and they disrupt
the big guys we love to tell this story
and I was living that story doing what I
love to do I then started a firm I wrote
three more books and we were going
around the world delivering these
innovation workshops and we could get
people to think very differently but
really secretly we knew that the ideas
that would come out from the managers
and brought together really wouldn’t
lead anywhere and they always hit that
bureaucracy that would kill off the
innovative idea right now three years
ago something changed I got a phone call
from someone named gene fuel and she
challenged me she said you think that
the employee
um the entrepreneur is the artist like
because they have the freedom to mix
things together to create new things and
you think that as organizations get
bigger that they ask people to paint
within the lines and ultimately they ask
employees to just do their job right if
you are a lawyer be a lawyer if you are
an accountant be an accountant if you’re
a marketer be a marketer but she shared
with me a story that came out of a
workshop that she that I delivered with
her and she had proven this view wrong
this innovation she’s a editor at
macmillan and her innovation made it
through into the market and was
celebrated as one of the most major
innovations in publishing featured on
BBC on NPR and so it got me thinking is
she just the outlier so went to meet
with her in her office and spoke to her
in her boss to understand what the path
was that she went through to introduce
this innovation and what she shared
really challenged much of what I thought
was the path of innovation right I
thought that she would be the outlier
that really it is the entrepreneur that
innovates and employees have
doing that so to test that test her
theory which was she was challenging me
was I looked at the 30 most
transformative innovations over the last
30 years as judged by appellant panel
Wharton professors based off a thousand
submissions and these are the big
innovations right these are the internet
email DNA sequencing MRIs the big
innovations and I said is it really the
entrepreneur that conceives of this idea
so I followed these paths and what I
found that only eight of these
disruptive innovations were conceived of
by entrepreneurs 22 of them I employees
if it were not for employee innovators
you woke up in the morning would not
have a mobile phone to reach for that
phone would not connect to the internet
you would not be able to send an email
if you got sick you would not be able to
get an MRI you would not be able to get
a stent you wouldn’t be able to go to an
ATM the world is a much better place
because of employee innovators and we
don’t know that we don’t celebrate them
who then builds the idea the
entrepreneur builds seven of these what
happens at that point is some
combination of people in academia and
institutions and the employee start
building it and then who then takes it
to market
is the competition so if we would say
what’s the real path of innovation what
we have to say if we want to be truthful
is an employee comes up with an idea
they partner with an academic to develop
the idea and that the competition takes
it and sells the idea and the problem is
only that that’s not a very sticky story
it’s not the kind of story that we’d
like to tell right we like the story of
the hero lone innovator and so and you
could say well that’s just the way it is
but this propagation of a story that’s
not true has a cost seventy percent of
employees or disengaged at work that
cost the US economy 450 billion dollars
in lost productivity to put that into
context take the revenue of Google
Amazon Boeing and GE put it all together
and it’s less than four hundred and
fifty billion dollars but there’s also a
humanitarian
the social cost of Asst when people are
disengaged at work they increase worker
safety they have anxiety they have
depression damages family relationships
so I wanted to understand what is this
path right and I first assumed just I
think many people do is that the those
who did innovate they followed some
innovation process recover companies
spend about three hundred and fifty
billion dollars on incubation labs and
accelerators and incubators right we’ve
got chief innovation officer I figure
that’s the path by which employees can
innovate from within but what I found is
actually that often what they do is they
help the system get out of the way they
don’t follow the system chuck house for
example in 1962 at that time he was an
engineer at HP in the R&D lab who’s
working on something called a
large-scale electrostatic display and
mr. Packard came to visit his R&D center
as he did every year and he saw this
project he didn’t like it and he said I
don’t want to see this project in the
R&D lab next year what he meant was I
want you to kill this project and what
did Chuck interpret that to mean I have
12 months to get this into the market
and so what he did on his own time on
his own dime over Christmas holiday is
he took one of these things took it on a
plane showed it to customers came back
in January with orders and now it was in
the market nobody asked him to do that
but it’s because he did that that we saw
a man land on the moon for the first
time if he hadn’t done that that
technology would not have been adopted
we would only heard Neil Armstrong say
one small step for man one giant leap
for mankind
eventually he wins the medal defiance by
HP awarded in extraordinary defiance we
were sort of defiance in the face of
adversity beyond the expectation of what
an engineer should and and laid the
foundation for a technology revolution
so why do they do that
so we know that they don’t follow the
system so why do they push for it even
though the company’s not asking them for
it it seems to be that they do it for a
higher cause because unfortunately they
don’t get rich from doing this you might
think that they want to do it for the
bonus but they don’t do it for the bonus
Kat Cole she is the CEO of a company
called Fortune Brands they own Carvel
Cinnabon and a few other brands used
before that she was the CEO of Cinnabon
but she started her career as a waiter
at Hooters her single mom didn’t have
enough money to support the family so
she had to get a second job and she
describes a moment early in her career
when the cooks in her restaurant went on
strike they left and half of the waiters
they figured there’s no food to cook so
they hung up their aprons and left but
the other half what did they do they
went into the kitchen to cook and she
went into the kitchen this is what these
internal innovators seem to do they go
into the kitchen in service of something
bigger sometimes it is the organization
sometimes it’s something even bigger
than that Heather Davis she is an
executive at TIAA he’s been behind some
really major innovations which
unfortunately confidential reasons I
can’t talk about by can’t talk about
this one she owns through her group
she owns twenty five billion dollars in
agricultural real estate they’re the
largest owner of agriculture real estate
the world they own more wineries that
anyone else in the world and she also
has a son who’s autistic so when she
learned that her farms are having
difficulty finding workers it became
immediately obvious to her that this
type of work this farm work is the
perfect kind of work for autistic people
so she got her company to launch a
program called fruits of employment that
found fulfilling work for people with
autism and helped farmers
meet their issue and help the company in
the same way so what they’re doing is
they’re serving something bigger so
there is evidence to say that it is
actually advantageous rather than quit
your job to pursue to change the world
from inside an established organization
when organizations start off their
startups their disruptors they take
risks as they grow they introduce
bureaucracies they start narrowing tasks
they tightly narrow those tasks but if
they get bigger there are four things
that come into play you have if you
decide not to quit you’ll have scale
that entrepreneurs can only dream of
you’ll have capabilities technology and
experts to tap that that would be hard
to get as an entrepreneur innovation
resources that entrepreneurs have to
continually fundraise for and you have
the ability to diversify risk to take
multiple bets and reduce the risk of
driving innovation from within and the
good news is that we are at the cusp of
a new stage in the evolution of the
corporation of the organization in
general there are technologies that are
starting to accelerate the pace of
change around our organizations and if
you think about it most of our
organizations are still run like
centrally planned economies well we have
one central authority who decides how to
distribute capital and labor and
capabilities and technology and we know
this doesn’t work but corporations are
evolving builds rating the founder of
Ashoka he talks about that is the pace
of change change accelerates
exponentially that the old ways of
organizing and educating are dying many
organizations are going to die except
for those that are able to activate
internal innovators and so I interviewed
so far 150 internal innovators and I
asked each one what is the biggest
barrier that you face to innovating and
this lays out a framework I call it the
innovate framework of course there’s a
consultant I’ve got to turn it into an
acronym so I’m gonna lay it out innovate
I you’ll see there’s one end that’s
missing I couldn’t figure out how to get
that end in but if you have an idea I’d
love to hear it um and so I laid out
these seven barriers that they seem to
repeat often and what will what they
point is to the contours of a new form
of organization under intense
organizations that survive in the future
are going to give employees their intent
back they’re going to turn employees
into intrapreneurs
under needs we’re gonna evolve from
complex strategic plans that no one can
understand it’s a simple statements of
purpose that tell our employees what
that will the company and the world need
as we get two options we’re gonna see
options and ideas not coming from
boardrooms but coming from hallways
we’re gonna see value not being
delivered in just one way but many
different ways of delivering value of
Cree of you that you can create value
for your organization and the world Act
we’re going to move from a model in
which instead of companies asking people
to prove their idea before they can take
action they’re gonna recognize that
innovations require you to take action
in order to prove the idea teams we’re
gonna move from hierarchical siloed
structures in towards agile teams that
can move quickly and read and
reconfigure at will and we’re gonna see
an environment evolve we’re gonna shift
from a centralized economy into open
platforms where employees can find
opportunities rally resources to change
things in other words what we’re going
to see is the shift in organizations
from asking employees to paint within
the lines towards allowing them to paint
outside of the lines and now I’m not
saying that I necessarily made the wrong
choice by quitting my job but what I am
saying is that you and nobody should
have to choose [Applause]
followed a fairly traditional corporate
career path until then I studied finance
and engineering and worked in investment
banking and then got my MBA here at
Columbia and I was then working at a big
consulting firm and I love my work and I
love the people that I worked with but
two things happen in 2004 the first was
that I got clear on what my purpose is
and it’s that people love what they do
and the second thing is I wrote my first
book and it took me seven years to write
this book and I didn’t know if I was
gonna write another one so I wanted to
make sure that I got the most out of
this moment and I remember sitting in
the office of my with my manager
explaining what my passions were and
what I wanted to do and asking is there
a way that we can somehow incorporate
this into my work at the firm and he
explained to me very nicely politely but
clearly they would be happy to support
me as long as I did it on my own time so
I quit and I became an entrepreneur that
kind of made sense that I would have to
become an entrepreneur in order to do
what I wanted to do we kind of have this
idea that it is entrepreneurs that are
the innovators and a lot of people will
support this view that you just cannot
change the world you cannot impact
things from inside established
organizations Clayton Christensen the
Harvard innovation guru that coined the
term disruptive innovation he says that
it’s very decision-making and resource
allocation processes that are key to the
success of large organizations that
hinder their ability to accept
disruptive innovations and John Hagel
another innovation guru he talks about
innovation antibodies that emerge around
new ideas where they’re introduced
inside an established company and so
there’s a lot of support for this view
that really the innovator is this person
their story is remarkably similar why
they’re all white men is a topic for
another day but let’s break down their
story some time in college they get a
big idea they leave college sometimes
before they finish
go to the west coast with that idea and
they step into a garage there a couple
people there with him we have the hacker
we have the hipster we have the hustler
and they build this solution and then
they launch a company and they disrupt
the big guys we love to tell this story
and I was living that story doing what I
love to do I then started a firm I wrote
three more books and we were going
around the world delivering these
innovation workshops and we could get
people to think very differently but
really secretly we knew that the ideas
that would come out from the managers
and brought together really wouldn’t
lead anywhere and they always hit that
bureaucracy that would kill off the
innovative idea right now three years
ago something changed I got a phone call
from someone named gene fuel and she
challenged me she said you think that
the employee
um the entrepreneur is the artist like
because they have the freedom to mix
things together to create new things and
you think that as organizations get
bigger that they ask people to paint
within the lines and ultimately they ask
employees to just do their job right if
you are a lawyer be a lawyer if you are
an accountant be an accountant if you’re
a marketer be a marketer but she shared
with me a story that came out of a
workshop that she that I delivered with
her and she had proven this view wrong
this innovation she’s a editor at
macmillan and her innovation made it
through into the market and was
celebrated as one of the most major
innovations in publishing featured on
BBC on NPR and so it got me thinking is
she just the outlier so went to meet
with her in her office and spoke to her
in her boss to understand what the path
was that she went through to introduce
this innovation and what she shared
really challenged much of what I thought
was the path of innovation right I
thought that she would be the outlier
that really it is the entrepreneur that
innovates and employees have
doing that so to test that test her
theory which was she was challenging me
was I looked at the 30 most
transformative innovations over the last
30 years as judged by appellant panel
Wharton professors based off a thousand
submissions and these are the big
innovations right these are the internet
email DNA sequencing MRIs the big
innovations and I said is it really the
entrepreneur that conceives of this idea
so I followed these paths and what I
found that only eight of these
disruptive innovations were conceived of
by entrepreneurs 22 of them I employees
if it were not for employee innovators
you woke up in the morning would not
have a mobile phone to reach for that
phone would not connect to the internet
you would not be able to send an email
if you got sick you would not be able to
get an MRI you would not be able to get
a stent you wouldn’t be able to go to an
ATM the world is a much better place
because of employee innovators and we
don’t know that we don’t celebrate them
who then builds the idea the
entrepreneur builds seven of these what
happens at that point is some
combination of people in academia and
institutions and the employee start
building it and then who then takes it
to market
is the competition so if we would say
what’s the real path of innovation what
we have to say if we want to be truthful
is an employee comes up with an idea
they partner with an academic to develop
the idea and that the competition takes
it and sells the idea and the problem is
only that that’s not a very sticky story
it’s not the kind of story that we’d
like to tell right we like the story of
the hero lone innovator and so and you
could say well that’s just the way it is
but this propagation of a story that’s
not true has a cost seventy percent of
employees or disengaged at work that
cost the US economy 450 billion dollars
in lost productivity to put that into
context take the revenue of Google
Amazon Boeing and GE put it all together
and it’s less than four hundred and
fifty billion dollars but there’s also a
humanitarian
the social cost of Asst when people are
disengaged at work they increase worker
safety they have anxiety they have
depression damages family relationships
so I wanted to understand what is this
path right and I first assumed just I
think many people do is that the those
who did innovate they followed some
innovation process recover companies
spend about three hundred and fifty
billion dollars on incubation labs and
accelerators and incubators right we’ve
got chief innovation officer I figure
that’s the path by which employees can
innovate from within but what I found is
actually that often what they do is they
help the system get out of the way they
don’t follow the system chuck house for
example in 1962 at that time he was an
engineer at HP in the R&D lab who’s
working on something called a
large-scale electrostatic display and
mr. Packard came to visit his R&D center
as he did every year and he saw this
project he didn’t like it and he said I
don’t want to see this project in the
R&D lab next year what he meant was I
want you to kill this project and what
did Chuck interpret that to mean I have
12 months to get this into the market
and so what he did on his own time on
his own dime over Christmas holiday is
he took one of these things took it on a
plane showed it to customers came back
in January with orders and now it was in
the market nobody asked him to do that
but it’s because he did that that we saw
a man land on the moon for the first
time if he hadn’t done that that
technology would not have been adopted
we would only heard Neil Armstrong say
one small step for man one giant leap
for mankind
eventually he wins the medal defiance by
HP awarded in extraordinary defiance we
were sort of defiance in the face of
adversity beyond the expectation of what
an engineer should and and laid the
foundation for a technology revolution
so why do they do that
so we know that they don’t follow the
system so why do they push for it even
though the company’s not asking them for
it it seems to be that they do it for a
higher cause because unfortunately they
don’t get rich from doing this you might
think that they want to do it for the
bonus but they don’t do it for the bonus
Kat Cole she is the CEO of a company
called Fortune Brands they own Carvel
Cinnabon and a few other brands used
before that she was the CEO of Cinnabon
but she started her career as a waiter
at Hooters her single mom didn’t have
enough money to support the family so
she had to get a second job and she
describes a moment early in her career
when the cooks in her restaurant went on
strike they left and half of the waiters
they figured there’s no food to cook so
they hung up their aprons and left but
the other half what did they do they
went into the kitchen to cook and she
went into the kitchen this is what these
internal innovators seem to do they go
into the kitchen in service of something
bigger sometimes it is the organization
sometimes it’s something even bigger
than that Heather Davis she is an
executive at TIAA he’s been behind some
really major innovations which
unfortunately confidential reasons I
can’t talk about by can’t talk about
this one she owns through her group
she owns twenty five billion dollars in
agricultural real estate they’re the
largest owner of agriculture real estate
the world they own more wineries that
anyone else in the world and she also
has a son who’s autistic so when she
learned that her farms are having
difficulty finding workers it became
immediately obvious to her that this
type of work this farm work is the
perfect kind of work for autistic people
so she got her company to launch a
program called fruits of employment that
found fulfilling work for people with
autism and helped farmers
meet their issue and help the company in
the same way so what they’re doing is
they’re serving something bigger so
there is evidence to say that it is
actually advantageous rather than quit
your job to pursue to change the world
from inside an established organization
when organizations start off their
startups their disruptors they take
risks as they grow they introduce
bureaucracies they start narrowing tasks
they tightly narrow those tasks but if
they get bigger there are four things
that come into play you have if you
decide not to quit you’ll have scale
that entrepreneurs can only dream of
you’ll have capabilities technology and
experts to tap that that would be hard
to get as an entrepreneur innovation
resources that entrepreneurs have to
continually fundraise for and you have
the ability to diversify risk to take
multiple bets and reduce the risk of
driving innovation from within and the
good news is that we are at the cusp of
a new stage in the evolution of the
corporation of the organization in
general there are technologies that are
starting to accelerate the pace of
change around our organizations and if
you think about it most of our
organizations are still run like
centrally planned economies well we have
one central authority who decides how to
distribute capital and labor and
capabilities and technology and we know
this doesn’t work but corporations are
evolving builds rating the founder of
Ashoka he talks about that is the pace
of change change accelerates
exponentially that the old ways of
organizing and educating are dying many
organizations are going to die except
for those that are able to activate
internal innovators and so I interviewed
so far 150 internal innovators and I
asked each one what is the biggest
barrier that you face to innovating and
this lays out a framework I call it the
innovate framework of course there’s a
consultant I’ve got to turn it into an
acronym so I’m gonna lay it out innovate
I you’ll see there’s one end that’s
missing I couldn’t figure out how to get
that end in but if you have an idea I’d
love to hear it um and so I laid out
these seven barriers that they seem to
repeat often and what will what they
point is to the contours of a new form
of organization under intense
organizations that survive in the future
are going to give employees their intent
back they’re going to turn employees
into intrapreneurs
under needs we’re gonna evolve from
complex strategic plans that no one can
understand it’s a simple statements of
purpose that tell our employees what
that will the company and the world need
as we get two options we’re gonna see
options and ideas not coming from
boardrooms but coming from hallways
we’re gonna see value not being
delivered in just one way but many
different ways of delivering value of
Cree of you that you can create value
for your organization and the world Act
we’re going to move from a model in
which instead of companies asking people
to prove their idea before they can take
action they’re gonna recognize that
innovations require you to take action
in order to prove the idea teams we’re
gonna move from hierarchical siloed
structures in towards agile teams that
can move quickly and read and
reconfigure at will and we’re gonna see
an environment evolve we’re gonna shift
from a centralized economy into open
platforms where employees can find
opportunities rally resources to change
things in other words what we’re going
to see is the shift in organizations
from asking employees to paint within
the lines towards allowing them to paint
outside of the lines and now I’m not
saying that I necessarily made the wrong
choice by quitting my job but what I am
saying is that you and nobody should
have to choose [Applause]
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