💥 Peacetime vs. Wartime innovation?
If you think The Godfather II would be the worst possible source to find the proper inspiration for strategy and innovation, I'd be with you. That being said, the movie has an interesting line of dialogue between Michael Corleone and Tom Hagen, his half-brother of sorts and family attorney. When Tom is aghast to be pushed away from his position of power when the family prepares for an open gang war, Michael just tells him kindly, "You’re not a wartime consigliere.”
In 2011, Ben Horowitz famously quoted the movie to discuss why Eric Schmidt left Larry Page in power at Google. According to Horowitz, the former was a peacetime CEO while the other was a wartime CEO, which Google needed at the time. In hindsight, and as we watch Google probably missing out on the AI revolution they started, we should say they didn't go to war quite enough since then...
Horowitz went on with this striking image for quite some years, derivating a complete set of rules for wartime vs. peacetime CEO:
In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.
There should be many things to discuss (like how reductive it can be to only think about your market in terms of zero-sum games), but let's say for now that there is some virtue to this principle. What never sat right with me is how badly it actually does apply to innovation. And it goes back to a discussion I had a few months on a podcast (in French – sorry) about rupture innovation. I was saying that whenever you have to deal with a rupture in your market, it's probably too late. If you didn't see it coming, you'd be out.
If you apply this notion of wartime vs. peacetime CEO, you might come to believe that, as a consequence, there should be a wartime vs. peacetime mode for innovation too. In peacetime, your work on open innovation expands the mindset of your teams and explores potentially fruitless but creative opportunities to build optionality for your company. While in wartime, you'd aggressively narrow your focus to a few selected endeavors with a clear market pathway and sound ROI. Said differently, peacetime is 'explore' while wartime is 'exploit.'
Intuitively this makes tons of sense.
In practice? I believe it's dangerous BS.
The key to innovation is not to shift from "peace" to "war" and back; it's about building and sustaining a continuum between these two modes. The bottom part of your innovation portfolio, closest to the market with the lowest uncertainties factors, is always full-on wartime. But if you just enter this mode without creating any core business alignment, you'll get crushed no matter how skilled you are at 'warfare.' Just as if the part that is the furthest from the market with high uncertainties and deeptech exploration looks like peacetime, it's actually a hot warzone too. Fighting to get into the best early-stage projects, picking enough far-reaching bets for the future, and building a learning organization around these uncertainties is anything but a walk in the park.
However, Google could these days go back to "war mode"; they won't be able to catch up with Microsoft, which built its jump in search during the last five years or more.
Was Microsoft in peace mode all these years? Not even close.