1: Splat.
A multiyear Research & Development project for the Dutch firm DSM‘s picture frame glass business had failed.
Here’s where things got interesting.
DSM’s CEO Feike Sijbesma “had set up a ‘Hall of Failures’ where the company organized funerals for failed projects,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest.
“The idea was to show that trying and failing would be honored as long as lessons were learned and shared, much in the same way that a traditional ‘Hall of Fame’ celebrates successes,” the authors write.
Like Ben and Jerry’s “Flavor Graveyard”, the idea was to create an environment where people are encouraged to experiment and try new things.
“These corporate funerals also made it clear that no more resources would be allocated to the effort—that the projects were dead,” the authors write.
2: As DSM, as part of the ritual, one of the project leaders would give a speech about the lessons learned to technicians from other divisions.
In this particular case, “engineers had created a glass coating that took all the photons from incoming light and pushed them directly through the glass onto the painting or photograph, making the glass fully transparent with absolutely no reflection,” Carolyn, Scott, and Vik note.
Unfortunately, the innovation was expensive, and the only market for the glass was museums, which was too small for DSM’s purposes.
As the eulogy was being delivered, one of the engineers in attendance raised his hand.
“If I’m understanding the chemistry behind the coating, what would happen if you applied it to solar panels? Wouldn’t this give them more photons to absorb than otherwise and therefore increase efficiency?”
CEO Feike Sijbesma turned to look at his chief innovation officer: This insight “was a simple yet brilliant idea that hadn’t been considered by the sales department, which had fixated on the picture frame market.”
The project was restarted. Sure enough, tests showed that the coating gave solar panels a 5 to 10 percent power boost. Fast forward to today, where “the coating is installed on many solar panels worldwide,” they write.
3: What are the key lessons here? The best CEOs are proactive about both pruning and nurturing.
“The growth of DSM’s antireflective coatings business was nurtured by funds freed up by other products and projects pruned by the ‘Hall of Failures,’ Carolyn, Scott, and Vik observe.
“Valeo‘s Jacques Aschenbroich pruned investments in what were previously considered core products,” they write, “to nurture its carbon emission reduction technologies and advanced driver assistance systems businesses.
“Adidas‘s Kasper Rørsted pruned inventory from retail partners to nurture its online channel.
“Israel Discount Bank‘s Lilach Asher-Topilsky drew resources from her international operations to bolster the pursuit of domestic opportunities.”
The big takeaway? We must prune so we can nurture.
More tomorrow!
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Reflection: What processes does my organization have to “prune” and “nurture”?
Action: Discuss with my team.
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