The Remarkable Leadership Podcast

00:00:08:09 - 00:00:40:12
Kevin Eikenberry
We say we want innovation. Corporations say they're innovating. But is it an illusion? What are what factors are thwarting innovation and how do we remove those barriers? These are big picture questions worth exploring. And that's what we're going to do here today. Welcome to the next episode of the Remarkable Leadership Podcast, where we are helping leaders grow personally and professionally to lead more effectively and make a bigger difference for their teams, organizations and the world.

00:00:40:13 - 00:01:07:00
Kevin Eikenberry
If you are listening to this podcast, you could be live for future episodes on your favorite social media platform to find out when those are happening and how you can get involved. You can join us in our groups on both Facebook and LinkedIn, although we are on other platforms as well. Go to remarkable podcast.com/facebook or remarkable podcast.com/linkedin to join us and find out when we will be live.

00:01:07:00 - 00:01:31:04
Kevin Eikenberry
So you can join us then. today's episode is brought to you by my upcoming book, Flexible Leadership Navigating Uncertainty and Leading with Confidence. This book gives you a new perspective and skillset to lead in challenging times in a more effective, flexible, and confident way. Pre-ordering your book now guarantees you the best possible price and to be an early adopter of these groundbreaking ideas.

00:01:31:06 - 00:02:01:07
Kevin Eikenberry
Learn more. Preorder your copy now at. Remarkable podcast.com/flexible. let me introduce Elliot to you, and then we will dive in. Elliot is the founder and CEO of High Alpha Innovation, a venture builder that partners with corporations, universities and entrepreneurs to co-create startups that solve compelling problems. He built his career and strategy, consulting IT in know site. The firm, founded by Clayton Christiansen in venture corporate venturing and as an entrepreneur, bringing new ideas to market.

00:02:01:13 - 00:02:28:02
Kevin Eikenberry
To date, he has launched over 40 venture backed startups. Originally from California. He currently resides with his family near me in Indianapolis or Carmel, Indiana. He earned his B.S. in finance from BYU and his MBA from the USA. Excuse me, UCLA Anderson School of Management. He is the author of the new book, The Illusion of Innovation Escape, Efficiency, and Unleash Radical Progress.

00:02:28:05 - 00:02:33:00
Kevin Eikenberry
He's our guest today. And, I'm so glad you're here, Elliot. Thanks for being here.

00:02:33:02 - 00:02:35:01
Elliott Parker
So, my thanks for having me.

00:02:35:02 - 00:03:01:07
Kevin Eikenberry
So, let's start. I mean, obviously, that short introduction says a little bit about who your journey, but I really want to know a little bit more like you didn't. You didn't wake up when you were ten and say, I'm going to be a venture strategist. So I, I like it like a little bit like how how do you end up here and maybe a little bit how you end up at the book, but just a little bit about your journey to give us context and to know a little bit more about you.

00:03:01:09 - 00:03:13:06
Elliott Parker
Yeah, yeah. Okay. So I began my career. I had a really fun job. I was working with, at a company called Arthur Andersen. And those who have been around for a while know about serving Andersen.

00:03:13:08 - 00:03:17:10
Kevin Eikenberry
And it was one of the big five, the big seven, the big three. It all depends, right?

00:03:17:12 - 00:03:41:15
Elliott Parker
Yeah, yeah. I mean, 100 year record as a as a accounting and consulting firm and imploded over the course of about six weeks. And, for me that was a, a remarkable, teaching moment. because here I was, brand new out of undergrad. I thought, I've got I've loved my job. This place is is, rock solid.

00:03:41:15 - 00:04:06:03
Elliott Parker
It's going to be here for a while. It's going to give me all sorts of options. And then a couple of years and it was gone and, learned that big companies can be pretty risky and pretty fragile. they can appear very stable and often they're not. And, I a few years later, I was working, got the MBA, started a couple of companies in business school and ended up getting a job in corporate venture capital later.

00:04:06:03 - 00:04:36:20
Elliott Parker
And first week. And on the job, I'm in the office headquarters, looking out in the parking lot and dozens of cars in the parking lot, knowing that this company had been started by someone 25 years before in his garage. And, thinking, that's remarkable. What an impact each of those cars represented a person, their loved ones, and the ability to do what they wanted to do in life because this company existed and was not only solving important problems in the world, but enabling the people there to have opportunities.

00:04:36:22 - 00:04:57:07
Elliott Parker
I thought that is an admirable thing to do, to start businesses that can grow and scale and solve the problems. And I come from a long line of entrepreneurs as far back as I can track. it's in the blood. can't get away from it. And, decided that I wanted to be an entrepreneur also. And maybe there's a way to do this at scale.

00:04:57:08 - 00:05:35:09
Elliott Parker
Or we could launch a bunch of companies and create as much opportunity for as many people as we can while solving really important problems along the way. I had an amazing opportunity to spend many years working with, an incredible thinker and person named Clayton Christensen who, came up with this idea of disruptive innovation, which we all know about now, came up with the idea of the, the innovator's dilemma, the notion that companies will do everything right and ultimately still fail because they leave themselves exposed at the low end for new entrants to come into the market with good enough products, they grab, hold, move up market and displace those incumbents.

00:05:35:11 - 00:05:55:02
Elliott Parker
Really hard problem to solve. And so my career has been spent on building new ventures, thinking about innovation, how it really works and how can you use these things to impact larger companies and enable these large corporations that we depend on and need to be successful? By the way, how do we enable them to be more successful in innovating.

00:05:55:04 - 00:06:16:14
Kevin Eikenberry
So big picture ideas today and yet practical solutions before we're done? I want to open, Elliot, by having you tell a story about someone that I think you you may even have said this, but you certainly will agree with the statement that especially Americans really ought to know, but we don't, his name is Gerald. Sure.

00:06:16:14 - 00:06:25:10
Kevin Eikenberry
And obviously we can't tell the long version of story, but give us the short version of the story and why it's an important metaphor for what we're talking about.

00:06:25:12 - 00:06:45:01
Elliott Parker
Yeah, yeah. So we I think we a lot of us have this sense that our large institutions, whether they're government, corporations, whatever they are, seem less capable today than they were back in the past 100 years ago. It seems like we could build bridges a short amount of time and not very much money. And now it takes years and costs money and more money and something's different.

00:06:45:01 - 00:06:45:21
Elliott Parker
Something's changed.

00:06:46:00 - 00:07:00:22
Kevin Eikenberry
I heard this morning. This, of course, will date this from a podcast perspective, but I heard this morning that it's going to be four years before the bridge will be replaced in Baltimore. Four years anyway, because your connection to what you just said.

00:07:01:04 - 00:07:23:08
Elliott Parker
Relatively fast compared, if you look at that one quick aside, the Golden Gate Bridge in San Francisco, they just put a net on it to prevent suicides. and I think if my numbers are right, it took longer to add the net and cost more funding to build the bridge originally. So something is different. Something's changed. Daryl sure is a great example.

00:07:23:09 - 00:07:58:02
Elliott Parker
This Gerald founded the witness protection program. he was, he was a lawyer in the Justice Department. And, Robert F Kennedy was there, running it. And, he'd had a history with the mob. Grew up in New York City where the mob had intimidated his father, was a tailor in the city, hated the mob, and decided the only way to bring it down was to create a program that would protect those who wanted to testify against the mob, create this amazing program, witness protection program that has led to, the arrests of thousands of criminals, brought down big crime rings.

00:07:58:04 - 00:08:16:22
Elliott Parker
And he did this almost single handedly inside this organization, where he was, kind of ran the thing with an iron fist for many years. he was actively involved in that organization, kind of built it in the way that he wanted to, and then ran it that way. It's really hard, and we've all benefited from it.

00:08:16:22 - 00:08:29:03
Elliott Parker
Right. So here's this kind of outsized, weird innovation that came out of the Justice Department. It's really hard to imagine somebody being able to do something like that today inside the Justice Department, doesn't it? Or inside of Bill or.

00:08:29:03 - 00:08:46:13
Kevin Eikenberry
Any place else. Right. We don't need to. Right. And we have to be just as boring to be in place. Yeah, I think that's exactly right. I love that story. I was unaware of that. and I love that. So I'm glad that we started there because it does, I think, frame this conversation really well, just like it frames the book.

00:08:46:13 - 00:09:03:02
Kevin Eikenberry
Well, you talked about The Innovator's dilemma. Clayton Clayton's, idea in the book, you talk about something called The capitalist dilemma. Sort of sits on the shoulders of that, if you will, talk about the capitalist dilemma.

00:09:03:04 - 00:09:32:21
Elliott Parker
Yeah, yeah. So this is an idea Clay was working on, before he passed away in 2020. Capitalist dilemma is this idea that one of the reasons companies have such a hard time innovating and doing things differently is that they are optimizing for certain metrics that prioritize short term financial capital efficiency, short term results. And specifically, what we see is that if you are a you ask anyone, how do you go to business schools, right?

00:09:33:02 - 00:09:52:11
Elliott Parker
We teach MBA students. How do you measure the success of a company? Well, return on investment capital, return on net assets, internal rate of return. We want to generate a lot of capital. That's how we measure success. and we've gotten very, very good at doing that. And as a result, companies now have more money on their balance sheets than ever before.

00:09:52:13 - 00:10:25:00
Elliott Parker
It's increased dramatically just in the last decade, even. And yet at the same time, we see corporate lifespans shrinking. So they've got they're making more money than ever, but they're going out of business faster. That's a really interesting question. Why why is that? The the answer is that they're so optimized for efficiency for making things as capital efficient, as predictable and as safe as possible, that when a crisis comes or a new competitor comes online, they find that they can't compete.

00:10:25:00 - 00:10:46:18
Elliott Parker
A good example of this during the Covid crisis, right. We saw supply chains crash. Now these supply chains for these big companies were amazing, built over decades to be super efficient things arriving just in time all around the world. in the book, I talk about an auto parts supplier that had 181 plants around the world, creating millions of parts a day.

00:10:46:20 - 00:11:08:13
Elliott Parker
super, super efficient. It's like a miracle of human ingenuity. Right? And then one little part of that system breaks, and we find that the whole thing comes crashing down. So it may have appeared to have been capital efficient in the near term, but when a crisis comes long term, that does not capital efficient. That is in fact very fragile.

00:11:08:15 - 00:11:30:08
Elliott Parker
And that's the problem. We've optimized our companies for return on invested capital, return that assets that tell leaders it's better to remove assets from your balance sheet and improve your metrics than it is to go do something risky and build something new. Over the long run, however, it's that building the new that creates resilience and creates organizations that endure.

00:11:30:10 - 00:11:38:03
Elliott Parker
And I want to build things that endure. I don't want to build things that are super efficient for three months and go to business.

00:11:38:05 - 00:12:01:04
Kevin Eikenberry
Well, or in the case of those those supply chain examples, you know, that looked like they'd been effective for a long time until any one little thing changes, right? So the subtitle of the book is Escape Efficiency. We've just been talking about that a little bit and unleash radical progress. Excuse me. Which to me is really the heart of the book, which is a good, a good use of a subtitle, of course.

00:12:01:06 - 00:12:30:03
Kevin Eikenberry
but I'm. But I want you to say a little bit more about this resiliency or resilience versus effectiveness or efficiency. Excuse me. Yeah, you just hinted at it, but let's go with a little deeper. There, recognizing that, those who are watching and listening might not all be making those decisions about a supply chain, but like how how do we take, say more about this idea and then think a little bit more about that, how we can use it wherever we sit in an organization?

00:12:30:07 - 00:12:49:09
Elliott Parker
Yeah. Well, I think it applies to our personal lives to actually let me let me tell you a story. There's a guy from Iceland named Hafthor Bjornsson who's six foot nine. he's an enormous guy. His nickname is The Mountain. Some people might know him by that name is pretty well-known. He holds the world record for the heaviest deadlift.

00:12:49:11 - 00:13:10:11
Elliott Parker
And if you go around Google, you can find the video of this deadlift. It's a remarkable thing to see. over 1,100 pounds, 501 kilos, he, the previous record was 500 kilos. He wanted to break it just by one kilo. Despite the guy who had at the previous record. We got done with the lift. He's like, I could have done more, but I just wanted to just beat him.

00:13:10:13 - 00:13:20:01
Elliott Parker
Like no one had ever done that in the history of the world before. An amazing feat. Now he has some natural abilities that aren't able to do this. Being six foot nine helps right?

00:13:20:04 - 00:13:26:19
Kevin Eikenberry
It would help compared to I don't know how tall you are because I can only see you from the shoulders up. I'm guessing you're not six foot. Not I know, I know.

00:13:26:21 - 00:13:45:14
Elliott Parker
Yeah, I couldn't do it. I would never do it. but he also had to prepare for a couple of the years he was working out during these strenuous workouts where he had to train this mind and his body to interact better, to tear down muscle, build it up. He had to eat five meals a day, full meals, 10,000 calories a day.

00:13:45:16 - 00:14:02:12
Elliott Parker
By the time you did the lift, he weighed 450 pounds. Crazy. He does this lift, he gets done, and the stress of it was so intense that he actually bled from his eye sockets. So now here's the thing.

00:14:02:12 - 00:14:04:02
Kevin Eikenberry
We can watch this on YouTube.

00:14:04:03 - 00:14:07:07
Elliott Parker
You don't see the bleeding from the eye sockets, fortunately, but you can see I'm.

00:14:07:09 - 00:14:09:17
Kevin Eikenberry
Glad about that. Actually.

00:14:09:19 - 00:14:35:08
Elliott Parker
But here's the remarkable thing. When we run our businesses or when we operate in our lives as well, I think this is true of us individually. We try to minimize the stress and tension in our lives or in our businesses, while increasing the insights that we accumulate that enable us to learn and to do new things. And the reality is, you cannot minimize tension and increase in size.

00:14:35:08 - 00:14:51:11
Elliott Parker
You need to think about how, to our honest, if he had pursued that same strategy, I'm going to take it easy. I'm going to I'm going to I'm going to take it easy on my body and I'm going to go do this lift. There's no way he would have broken that world record. He had to put his body through stress and tension to be able to do the hard thing that he wanted to do.

00:14:51:13 - 00:15:13:01
Elliott Parker
It's true in our businesses, too. And the the issue is we try to run these companies so efficiently, so optimized for predictability and safety and by the way, what this looks like is slow to make decisions, everything done by committee. Those are features of a large organization, not a bug that is optimizing for safety and preserving what exists.

00:15:13:03 - 00:15:36:17
Elliott Parker
Being really careful hundred percent. Yeah. And boy, that type of organization does not gather insights. That type of organization does not learn, does not uncover anomalies or the surprises that lead to new paths for growth. So you have to as a leader or I think it's true in our own lives, we have to accept some degree of deliberate inefficiency and be okay with that.

00:15:36:19 - 00:15:41:15
Elliott Parker
Now, there are ways and companies actually you can do this systematically.

00:15:41:17 - 00:16:02:03
Kevin Eikenberry
Before you go there, I just have to tell you that I literally this morning and maybe it's because I was channeling this conversation. I mean, I've read the book, but I don't know that it came from that necessarily, at least not consciously. But I wrote for my, Monday, Wednesday and Friday newsletter I wrote this morning and the idea was to seek out struggle.

00:16:02:05 - 00:16:15:09
Kevin Eikenberry
Yeah, it's the point where make it's the exact point we're making right to seek out struggle, that it's only through that that we gain learning, that we gain growth, that we get insights to your point. So now take, take take this home back back in organizations.

00:16:15:11 - 00:16:47:07
Elliott Parker
Yeah. Yeah. So on that Clayton Christiansen right. This wonderful, thinker, he had a sign outside his office at Harvard Business School that he made that said anomalies wanted. And, boy, if you walked into his office with some idea about how one of his theories was wrong, he loved it. He sought that out because it was that conflict, that tension that made the theory stronger and a more accurate representation of how the world really works.

00:16:47:09 - 00:17:11:02
Elliott Parker
The problem is, in our organizations, when we think about the way that we innovate or the experiments that we run, often those experiments are designed to reinforce what the organization already knows already believes to be true. We need to instead run experiments that lead us to question, that uncover anomalies, that challenge what the organization believes. Everything in the organization is optimized for preservation.

00:17:11:04 - 00:17:16:03
Elliott Parker
We've got to find ways, new systems to break out from that. So you think about it. Go ahead.

00:17:16:05 - 00:17:32:19
Kevin Eikenberry
You know, and the tension of that optimized for the words you use was optimized for, you know what? Where do you use now but optimized to be safe to stay in business. And yet our businesses are lasting shorter and shorter periods.

00:17:32:19 - 00:17:34:09
Elliott Parker
That's the irony. Isn't that crazy?

00:17:34:12 - 00:17:35:13
Kevin Eikenberry
The irony. Right. Exactly.

00:17:35:13 - 00:18:00:13
Elliott Parker
Yeah. We think we're running these things. We're we're trying. We are being safe. We're being careful. We're being deliberate. Well, it turns out that's extraordinarily risky. And it is destined to lead to failure. Think about in business, we think in the world. I operate in a world of venture capital. We think about, options, strategies and a two by two, right where on one axis you have you're with the consensus.

00:18:00:15 - 00:18:19:19
Elliott Parker
You're against the consensus. On the other axis, you're either right or wrong. Now, if you are with consensus, let's imagine you're running a company and you're going along with your competitors. You're believing all the things they believe and you turn out to be right. Congratulations. You've gone out of business. Now, it might take a while, but you do that over and over again.

00:18:19:19 - 00:18:34:09
Elliott Parker
You're going to go out of business because everybody else is doing the same thing, and somebody else is inevitably going to do it better than you. The only way you win in business is by going against the consensus, being contrarian and turning out to be right. That's a really hard thing.

00:18:34:09 - 00:18:36:18
Kevin Eikenberry
Oh, by the way, that second part is really important.

00:18:36:20 - 00:18:56:10
Elliott Parker
Yeah, yeah. You don't turn out to be wrong. Then you're going to go out of business too. But the thing is, over the long run, that is the only path to success. And so you've got to find ways to surface those non consensus views, those contrarian views, those anomalies, those surprises are hard to do.

00:18:56:12 - 00:19:12:03
Kevin Eikenberry
I love that I want to come back to that. But I want to put up a question that came in from Keith Glover. It's a little long, but I think we can get to it. How do we hit the sweet spot of bleeding from the eyeballs, reaching unbelievable goals and blowing our eyeballs completely out of our eye sockets?

00:19:12:05 - 00:19:31:17
Elliott Parker
Well, so that's the thing. You don't want to blow your eyeballs. You need your eyeballs. You need to be able to see. And that's true in companies. You don't go too far. Don't go to the other extreme. The extreme. We often operate on is to say hyper efficiency. Remove all error from the system. the person who personified this really well was Jack Welch when he was running GE back in the 80s, 90s.

00:19:31:19 - 00:19:51:04
Elliott Parker
He said famously, variance is evil. what he meant by that was we're going to remove all error from the system. Well, that's one extreme. That's not good. But you can imagine what the other extreme would look like, which is complete chaos. That doesn't work either. That's that's you're doomed to fail that way too. So we have to find where the sweet spot is in the middle.

00:19:51:05 - 00:19:52:15
Kevin Eikenberry
Between the two of those.

00:19:52:17 - 00:20:05:06
Elliott Parker
Yeah. I think there's, And ultimately comes down the question, how much innovation do we need and how soon do we need it? More innovation you need, and the sooner you need it, the more deliberate inefficiency you need to bring into your system.

00:20:05:07 - 00:20:19:10
Kevin Eikenberry
More you need to leave. quality lean practices and allow for variation. Right. The more that you, the more in, the sooner you need that you're not. Because you're not saying that those are bad things.

00:20:19:12 - 00:20:40:06
Elliott Parker
No, not at all. And most of the innovation we benefit from are incremental improvements or efficiency improvements that lead us to be able to do more with less. Or think about, boy, if I go to the doctor and I'm having surgery I don't like, I want that to be super safe and predictable. I don't want that surgeon to be innovating in the operating me.

00:20:40:08 - 00:21:03:04
Elliott Parker
Right. So there are environments where you want just just focus on efficiency. It's good to do. We've got to find ways to carve out some room for that deliberate efficiency in efficiency. So think about an organization as it scales up the governance systems, how we make decisions, the talent we recruit and retain, the incentive systems we use, the processes we use to get things done.

00:21:03:04 - 00:21:24:09
Elliott Parker
All of those are optimized for preserving what exists, for making things predictable. And then we know that these organizations need to innovate. And so often what we see inside of these companies is we know we need to bleed from the eye socket at least a little bit. Everybody knows this. And so what we do is we say we're going to take the system we've created and we're going to we're going to pointed toward learning.

00:21:24:11 - 00:21:47:07
Elliott Parker
Well, this is a system that has been designed to execute, to execute, often at scale, often globally. That is a very different activity than learning, which is inefficient, which is making mistakes, which is doing things that don't make sense. And you cannot take that system designed for hyper efficiency and execution and directed toward learning and expect it to work.

00:21:47:07 - 00:22:08:21
Elliott Parker
You have to create an entirely new system for that type of innovation that requires a high degree of inefficiency, where you're operating in a world of ambiguity. Where we think about it a lot is you've got you've got two types of problems that companies face. You've got learning problems and execution problems and execution problem. As we we know the problem and we know what we probably need to do.

00:22:08:22 - 00:22:30:05
Elliott Parker
We just have to go do it. Corporations are designed to do that better than anything else. better than anyone else. On the other hand, if it's a learning problem where we know the problem is, but we're not quite sure how to solve it, it's still ambiguous. We've got to go figure it out. Small teams, startups are designed will win almost all the time against large corporations.

00:22:30:05 - 00:22:45:05
Elliott Parker
With those types of challenges. And so if you're running a business, you have to first look at are we is this a learning problem or an execution problem? Because if it's a learning problem and I'm inside a big company, we've got to find a different way to solve this than we typically would.

00:22:45:07 - 00:23:02:02
Kevin Eikenberry
I love that. I think to me, that's a one of the really big ideas that we all can take from this and we can take from that. And back to when we were talking to earlier about, how we can apply this in our personal life. I think the same thing is true. We can ask those same two questions of ourselves, right?

00:23:02:04 - 00:23:31:09
Kevin Eikenberry
As individuals, as families, as colleagues or whatever we want to do. we've talked a lot about and there's a lot of things in the book, and we're talking with Elliot Parker, the author of The Illusion of Innovation here. And there's there's a lot of stuff that you talk about here that help us see that this is a very prevalent problem, and that it's not necessarily been getting better.

00:23:31:11 - 00:23:51:11
Kevin Eikenberry
you make a lot of really cogent points and talk about that a lot. And yet at the end of the day, you're optimistic about the future. And even though you say, hey, you know, it's taking us longer to do stuff in big corporations, we're trying to play it safe. We're we're focused on the mean, maybe focus some of some of the times on the wrong things.

00:23:51:17 - 00:23:56:03
Kevin Eikenberry
And yet you're ultimately optimist like Y.

00:23:56:05 - 00:24:06:15
Elliott Parker
Yeah. for a few reasons. First of all, what what does it mean to be optimistic? It doesn't mean I expect everything to be good from here on out. I do expect.

00:24:06:17 - 00:24:08:14
Kevin Eikenberry
Everyone read your book and takes that.

00:24:08:16 - 00:24:33:03
Elliott Parker
Well, hopefully that might help. I hope. I, I think being optimistic means that we assume they're going to be really big problems in our futures, but that our capacity to address those problems is going to increase over time. And if you look through history, the trends, that is true. If you look back over time, optimists on average have been much more correct than the pessimists.

00:24:33:04 - 00:24:57:16
Elliott Parker
And so if you want to be more correct and more prepared for the future, you should want to be an optimist because you're more likely to be correct. The underlying factors that have helped us increase our, for example, world GDP exponentially over the last 500 years. The underlying factors have not changed. In fact, you could argue that, we will see accelerated change because of what's happening.

00:24:57:18 - 00:25:19:11
Elliott Parker
Things should our capacity to address problems will increase over time. And so on average, things will get better. There will be problems, but on average, things will get better. There's been no better time to be alive. And things from here on out. I'm envious of our grandchildren and what they will see and experience, because our capacity to address problems will increase on average over time.

00:25:19:12 - 00:25:30:20
Elliott Parker
But I think we could do things better, and I think we could we could make it a little more, accelerated and in ways that benefit humanity.

00:25:30:22 - 00:25:53:13
Kevin Eikenberry
I want to share with something that you wrote on page four. I know I'm going to read it. I'm not going to make you tell me. it's not a quiz. at the very beginning of the book, which, I think is well stated and I completely agree with and I think it's a good way for us to start to, to round the corner to the end of our conversation.

00:25:53:13 - 00:26:13:02
Kevin Eikenberry
So I'm just going to read what you wrote on page four and then have you comment on it, add to it, and sort of connect it to the dots of what we've talked about today and everybody. He has no idea. And he's not he's not scrambling to find page four. So he does know what's coming. Here comes, there is more enduring truth and light outside the narrow subject of business than within it.

00:26:13:08 - 00:26:28:15
Kevin Eikenberry
There is so much to understand from science, history, biology and adventure that can be applied to the way organizations work to solve important problems. Yeah, anything you want to add to that or you want to connect that to what we've been talking about innovation.

00:26:28:15 - 00:26:53:13
Elliott Parker
In the end, it comes from the collision of ideas. And, my view, again, in the spirit of seeking anomalies and seeking surprises, you're more likely to find them in areas that you don't know a lot about. And so you think about, if I'm running a bank, for example, I'm going to focus on everything financial services and how to improve incrementally, how to operate that think, well, boy, there's a lot of good ideas to be found in other industries, other fields in history.

00:26:53:15 - 00:27:15:22
Elliott Parker
One of the best lessons I ever learned about business, I learned in the Amazon jungle, watching tracking insects in the Amazon. Totally unexpected. I didn't go there thinking that was going to happen. but it became an important life lesson for me and a lesson in how to run businesses more effectively. So there's there's much more truth that say business is a very narrow part of the world, a very narrow part of our lives.

00:27:15:22 - 00:27:19:12
Elliott Parker
So we can learn a lot from history and other other places.

00:27:19:14 - 00:27:26:22
Kevin Eikenberry
Elliot, is there anything there are lots of things that we could have talked about. Is there anything that you wish I would have asked that I didn't?

00:27:27:00 - 00:28:08:02
Elliott Parker
Let me let me give you one more good analogy. Just I think, to think about, this challenge of innovating, and every hopefully when the listeners see this pop up in the news, it'll still strike a thought and they'll think about it. Wildfires in the western United States give us a good lesson, both about our capabilities as humans and also the, the challenges of misplaced priorities in if you go back in history prior to the gold rush out in California, some estimate that, 4.5 million acres of land burned a year, naturally, through lightning strikes and things like that, as people moved in to California and other states in the western United

00:28:08:02 - 00:28:29:05
Elliott Parker
States, we got really good. As soon as a fire pops up, we put that fire out for very good reason to preserve life and property. And if you look now in the in the Western states, on average, or by the 1950s and 1960s, we reduced the amount of land burning each year to about 250,000 acres per share, from 4.5 million 250,000.

00:28:29:07 - 00:28:33:10
Elliott Parker
Amazing feat of human ingenuity. The problem?

00:28:33:12 - 00:28:35:03
Kevin Eikenberry
Unintended consequences.

00:28:35:03 - 00:28:55:02
Elliott Parker
My intended consequence was that those forests have become incredibly dense, ten times more dense than they used to be, so that when a fire does come down, we don't put it out right away. It burns with intensity and faster than anyone could have ever believed. And so now we have, we talk about a fire season. Isn't that crazy?

00:28:55:02 - 00:29:16:22
Elliott Parker
We talk about it's the fire season in the western United States. my great great grandparents are buried in a town called Paradise, California, which was devastated by a fire. One of these fires a few years ago. Now, here's the lesson for our companies. We operate our companies with a very similar strategy. As soon as a fire pops up, we put it out.

00:29:17:00 - 00:29:40:01
Elliott Parker
Meaning as soon as we see errors in the system or mistakes, anomalies, things that challenge the organization, we put those out as soon as we can. Similarly, our companies, over time build up this Tinder innovation debt so that when a crisis comes like Covid, some part of it breaks. The whole thing comes crashing down much faster than we could have possibly imagined.

00:29:40:03 - 00:29:56:00
Elliott Parker
We all know what the answer is in the western United States, but the strategy is it's a strategy. We need to engage in a strategy of controlled burns, where you map out a checkerboard and you burn certain areas of land on purpose so that it reduces the fuel for these fires when they come. We all know that's what we need to do.

00:29:56:00 - 00:30:21:00
Elliott Parker
The problem is the incentives don't enable us to do that for any individual land manager. There's too much risk to do that. I think last year in California, something like 20,000 acres were burned deliberately through through this type of, controlled burn strategy. Some people estimate that for California to regain its balance, an area the size of the state of Maine would need to burn.

00:30:21:02 - 00:30:24:22
Elliott Parker
And so until that happens, we got this incredible fire debt in the state.

00:30:25:00 - 00:30:25:17
Kevin Eikenberry
The.

00:30:25:19 - 00:30:44:03
Elliott Parker
Same thing in our companies. We've got to think about how do we get good at operating, running controlled burns, at running these types of experiments that enable us to learn, uncover and reduce some of that innovation that that, that Tinder that's sitting there that is going to be our destruction when a crisis comes.

00:30:44:05 - 00:31:05:17
Kevin Eikenberry
It's good. Everybody. That's really good stuff. And so if you've enjoyed this conversation, you're going to get a copy of, The Illusion of Innovation. The things that Eliot has talked about so well, here are in the book with plenty for you to think about. This is Sabina maybe a little bit different of a show than we do sometimes a little bit higher level thinking, bigger picture than we do sometimes.

00:31:05:17 - 00:31:20:00
Kevin Eikenberry
Not always, of course. and I hope that you all found it useful, but we're not quite done with Eliot yet. I have a couple more questions for you, sir. and but I'm really going to shift gears now, and so I want to know what you do for fun.

00:31:20:02 - 00:31:24:15
Elliott Parker
so more fun than anything for me is surfing. I may be the only person who don't.

00:31:24:15 - 00:31:26:00
Kevin Eikenberry
Do that in Carmel, Indiana.

00:31:26:01 - 00:31:44:05
Elliott Parker
Not a lot of that in Indiana. Maybe the only person in Indiana with a bunch of surfboards in my garage. but when I get a chance, I am, I'm looking for good waves around the world. So I grew up surfing. and there is nothing. Nothing more fun, than surfing. I wish I could do it more.

00:31:44:07 - 00:31:53:07
Kevin Eikenberry
There you go. And. And the other thing. The only thing you knew I was going to ask you is about reading. Like, what are you reading these days? Or what's something, Eliot, that you've read recently?

00:31:53:09 - 00:32:16:14
Elliott Parker
I read a lot of books. I've always got 3 or 4 books I'm reading at once. currently, two of the books I'm reading that I'm loving. it's kind of kind of different. one is The Military Maxims of Napoleon. I can't recommend this book enough. Napoleon Bonaparte sat down and wrote out what are the lessons that he learned leading the military of France?

00:32:16:16 - 00:32:20:20
Elliott Parker
And it turns out not all of them are applicable to run company.

00:32:20:22 - 00:32:22:02
Kevin Eikenberry
Thankfully.

00:32:22:04 - 00:32:40:19
Elliott Parker
Thankfully. But a lot of it is so applicable to strategy and thinking about businesses. Remarkably so. And if you read it with that lens, you will learn a lot. I've learned so much and it's broken down. I take 1 or 2 of these a day. I just read through it. How does that apply? Super interesting. fascinating person.

00:32:40:21 - 00:33:02:08
Elliott Parker
right. another book that I'm, I'm diving into right now, very relevant, written a few years ago. maybe six, eight years ago, even maybe not that long, but called, competing in the age of AI by a couple of professors at Harvard, provides some wonderful frameworks for thinking about what do we do about this AI revolution that is just starting?

00:33:02:10 - 00:33:04:02
Elliott Parker
And, it's really helpful.

00:33:04:04 - 00:33:24:15
Kevin Eikenberry
You make it two observations for everybody. Number one is, reading a book about AI that's not recent gives us a different perspective. And obviously, reading a book from Napoleon gives us it gives us a different perspective. So. So Eliot is practicing what he's preaching, about looking outside of business, number one. But number two is there's a lot to be said.

00:33:24:17 - 00:33:46:17
Kevin Eikenberry
although, you know, I'm a proponent of and a purveyor of the ideas in new, brand new books like you, Eliot, I'm I'm a big fan and believer in reading stuff that's not the latest thing, out or that, that everyone else is currently reading. So yeah. So I appreciate that. before we go, where do you want to point people?

00:33:46:17 - 00:33:53:16
Kevin Eikenberry
Where can where can people learn more about you, connect with you, your business, the work that you do, the book, etc.? Where do you want to point people?

00:33:53:18 - 00:34:09:04
Elliott Parker
you find me on LinkedIn, on Twitter. Er, Parker, you can go to R parker.com to find more info about the books available. All the places books are sold Amazon and all that. or you go to our company website, High Alpha. You know, Scott's also a good place to go.

00:34:09:08 - 00:34:27:01
Kevin Eikenberry
I offer, you know, dot com E.R. parker.com. Those will be in the show notes. Everybody. I hope that you'll, check that out as well as we always put the links to, all of the books that we talk about here, there as well. before we go, though, everybody, I have a question for all of you who are listening or watching.

00:34:27:02 - 00:34:53:18
Kevin Eikenberry
If the question I ask every week, because it's an important question, and the question is now what? What action will you take as a result of this conversation? What idea did you get that you need to go act on? Because until we take action, it doesn't really matter, right? Like having ideas are wonderful and having new insights are useful, but only to the degree that we put them into action.

00:34:53:18 - 00:35:08:18
Kevin Eikenberry
I hope that you have thought of some of those things today, and, are now ready to go out and take action. I hope you'll do that. And, Lee, thanks again for being here. It's such a pleasure to have you, as a neighbor, so to speak, to have you here and, to all of you.

00:35:08:18 - 00:35:28:04
Kevin Eikenberry
Thanks for being here. I hope you'll come back next week. If you're here on the podcast, you know what to do. You like, make sure you like the podcast. Make sure you tell somebody else about the podcast. And if you're watching this and don't know about the podcast, wherever you watch podcasts, you can find it. It is the remarkable Leadership podcast, and we'll be back next week with another episode.

00:35:28:04 - 00:35:28:18
Kevin Eikenberry
We'll see you then.