Welcome to another exciting episode of Get Better Today. For this podcast episode, we had the privilege of speaking with Elliott Parker, the founder and CEO of High Alpha Innovation. Elliott, with his extensive experience as a venture builder who partners with corporations and universities to create startups, has a deep understanding of the key factors that drive innovation and how organizations can start unleashing radical progress.
Elliott Parker built his career in strategy consulting at Innosight, the firm founded by Clayton Christensen, in corporate venturing, and as an entrepreneur bringing new ideas to market. To date, Elliott has launched over 40 venture-backed startups. Elliott is the author of the book The Illusion of Innovation: Escape “Efficiency” and Unleash Radical Progress.
In this article, we’ll explore key insights from the fascinating conversation with Elliott Parker, including practical steps to build resilient organizations and drive meaningful innovation.
Listen to the episode on Spotify, Apple Podcasts, Amazon Music, or on your favorite podcast platform. Watch the episode on YouTube.
Elliott Parker Episode Highlights
The Journey of Elliott Parker: Elliott Parker’s passion for innovation began during his first job out of college at Arthur Andersen, the once esteemed accounting firm. His position in the consulting division allowed him to witness the company’s rapid decline due to the Enron scandal. This pivotal event ignited his passion for innovation and building resilient companies. Elliott recalls how the experience at Arthur Andersen taught him the fragility of even the largest organizations. It set him on a path to understand what makes an organization resilient and why many fail despite their size and history.
Characteristics of Resilient Organizations: According to Elliott, resilient organizations share a profound care for their stakeholders, including customers from the past, present, and future. He draws an analogy with the Kiyomizu Temple in Kyoto, Japan. This historic temple carefully manages its resources, such as planting trees that will be used 400 years later. This meticulous care and long-term thinking imbue resilience in both the temple and, by extension, any organization that adopts similar principles. Organizations that value their long-term health over short-term gains tend to fare better in the face of adversity.
How Companies Measure Success Today: Elliott pointed out that many organizations prioritize capital efficiency metrics like Return on Invested Capital (ROIC) over long-term resilience. While capital efficiency is important, it often leads to decisions that enhance short-term gains at the expense of long-term stability. Elliott emphasizes the need for redundancy and controlled inefficiency to build resilience. During the COVID-19 pandemic, companies with highly efficient supply chains struggled when a single component broke down, proving that some inefficiency is crucial for long-term survival.
The Illusion of Innovation: Elliott’s book, The Illusion of Innovation, critiques the traditional methods large corporations use to pursue innovation. He argues that the standard approach of setting up isolated innovation teams rarely leads to the transformative results companies hope for. Instead, this often results in value-destructive activities that sap resources and attention from genuinely impactful ventures.
Learning from Startups: One of the core messages from Elliott’s work is that large organizations can learn a lot from startups. Startups thrive on experimentation and learning, while large corporations excel at execution and scaling. By combining the strengths of both, organizations can drive meaningful innovation. Elliott highlights how companies like Ford Motor Company and startups like Shelby work together, leveraging each other’s strengths to achieve extraordinary results. He stresses that large corporations should not try to act like startups but should instead find ways to integrate startup practices that foster innovation.
Practical Advice for Leaders: For leaders in large to medium-sized organizations, Elliott has practical advice. First, forget the notion that everyone in the company should be an innovator. Focus on running the business efficiently while dedicating a small, specialized team to transformative innovation. He also suggests running numerous, low-cost experiments to challenge the status quo and uncover valuable insights. This approach helps balance the need for stability with the imperative to innovate.
Embracing Chaos and Curiosity: We discussed the importance of embracing chaos and being radically curious. As Reed Hastings of Netflix believes, welcoming a certain amount of productive chaos fosters innovation and growth. Similarly, Walt Disney’s pursuit of what interested him—model trains—led to the creation of Disneyland. To be effective leaders, one must not shy away from controlled chaos. Instead, view it as an opportunity to experiment, learn, and pivot. This mindset will help organizations not only survive but also thrive in the long term.
Optimism Is A Moral Duty: Elliott concludes with a powerful message on optimism. He believes that optimism is a moral duty because it leads us to think long-term, benefiting not just current stakeholders but future generations. Contrary to popular belief, optimism is not about ignoring challenges but about believing in our capacity to solve them. He likens the challenge of being contrarian and right to the strategies employed by successful venture capitalists. By betting on non-consensus ideas and being resilient enough to withstand failure, organizations can eventually stumble upon transformative innovations.
Show Notes
0:00 Elliott Parker Intro
1:05 Elliott Parker’s Early Career and Lessons from Arthur Andersen
3:38 Building Resilient Organizations
7:20 The Importance of Continuous Experimentation
8:29 Historical Examples of Longevity in Organizations
9:54 Challenges in Measuring Success
13:47 Corporations vs. Startups: Learning and Execution
17:21 Encouraging Innovation in Large Organizations
22:10 The Illusion of Innovation
30:37 The Role of Chaos in Organizational Success
31:26 Corporate Lifespans and Capital Efficiency
32:46 The Evolution of Corporate Structures
34:48 Challenges in Modern Business Education
37:37 Risk-Taking and Entrepreneurial Success
38:21 The Importance of Contrarian Thinking
40:01 Lessons from Steph Curry for Corporations
42:51 The Power Law in Innovation and Venture Capital
45:21 The Moral Duty of Optimism
50:58 Embracing Chaos for Radical Progress
Connect with Elliott Parker
The Illusion of Innovation Book
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