Innovative Leadership in the Army: Four Lessons from a Start-up Incubator

Many leaders in the Army would like to be innovative, but the task can seem so daunting that it is difficult to determine where to start. This is not a new problem. Col. Eric Aslakson called out this issue five years ago (in 2016) when he argued that the Army isn’t developing enough creative leaders.^[i] That same year, the Army released its innovation strategy for 2017 to 2021.^[ii] Since then, the Army has undertaken several initiatives aimed at innovating how the Army operates in the 21^st century. Despite this, it appears that there is still a need for leaders at all levels to make good use of these new capabilities.^[iii] Growing tensions between the United States and China link innovation to national security have made the quest for innovative leaders even more important.^[iv] To develop the next generation of innovative leaders for the Army, it could be helpful for us to look outside the Army for examples of innovative leadership.

One place Army officers can look to identify examples of innovative leadership to emulate is startup incubators.  One only needs to look at the Forbes 2020 list of America’s most innovative leaders to find examples of start-up founders who used innovation to successfully lead their organizations through a changing world.^[v]  Many of these leaders cut their teeth in startup incubators like Y-Combinator.  Startup incubators provide funding and mentorship to the next generation of creative entrepreneurs. The approach employed by these incubators has been so successful that universities around the world have also started their own incubators to develop their students’ innovative ideas.  I was fortunate enough to work in one of these university-led incubators where I competed with a group of fellow students in a Spring Venture Lab competition.  Over several months with the lab, I learned four lessons that I think can make innovation more manageable for junior officers.

 Innovative Ideas Don’t Have to Be New

When I told the director of the Venture Lab that our team had an idea that no one tried before, he frowned. New ideas, while exciting, aren’t always good for innovation. This may seem counter-intuitive, but the successful innovators most of us know about didn’t come up with anything new. When Steve Jobs created the first computer with a graphical interface, he took the idea from Xerox. Steve Jobs didn’t create anything new. Instead, he understood how to put the new technology to productive use.^[vi] Likewise, Google wasn’t the first search engine and Facebook came after MySpace failed to control the social network market.^[vii]

New ideas are risky because they have not been tested. Ideas that depart from the status quo create uncertainty that is difficult to navigate. Because many innovations are unproven, it is hard to know what their future impact will be.^[viii] It is often the case that the first-mover in a new market is often the first loser. Organizations that are looking to conserve their resources may wait for another player to pave the way before they enter the market with their version or unique application of that technology.

Being free from having to generate new ideas can help leaders be more creative. One way junior officers can generate innovative solutions is to look at other units to identify mismatches between proposed solutions and current problems. Some innovative solutions fail at first because they are addressing the wrong problem.  A recent, relevant example of this is the mRNA technology used to inoculate people against the COVID-19 virus. One of the lead inventors of this technology, Dr. Kati Kariko, had worked with mRNA since 1985 with mild success.^[ix] Previous experiments with mRNA failed to treat blood clots or HIV, and her research was nearly shelved several times. Eventually, she found that mRNA treatment was a good match for the spiked-protein structure of coronaviruses. Today, her technology is used in both the Pfizer and Moderna vaccines that are used all around the world. Junior officers could potentially do the same by looking at old AARs to find initiatives that failed because perhaps they weren’t applied in the right environment, or at the right time.

Another way to develop innovative ideas is to look at what is working in other fields. My team’s original idea for the Venture Lab was to take existing technology used to create digital collectibles and apply them to the problem of ticket scalping. By researching the successes and failures of multiple players in this market space, we were able to put together a good picture of how the technology would fare in different circumstances. Junior officers might apply a similar approach by looking at what other units or leaders are doing and thinking about how they might modify those ideas or apply those techniques to new situations or scenarios.

Execution is More Important than Ideation

When I started the Spring Venture Lab competition, my team was very worried about sharing our idea with potential collaborators. I called a friend who had worked in Silicon Valley for a few years and asked him how to protect our idea from getting stolen. What he said changed our entire communications strategy.

 “I have never heard an idea that is so good that the success of a project depends on keeping it a secret.” Having worked on a few of his own projects, he learned that execution was the difference between a failed business and a potential unicorn (the name for a startup that reaches a billion-dollar valuation). Paul Graham, the founder of Y-Combinator, wrote something similar in an essay on successful start-ups. He wrote, “What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can’t save bad people.”

This advice, while harsh, should be intuitive for Army leaders. Leadership in the Army is about building great teams to perform a mission. When trying to find an innovative solution, leaders shouldn’t spend so much time on the idea that they don’t determine how to get it done. We wasted the first few weeks of our program trying to keep our idea secret from the world when we could have been finding potential partners to help us fill key gaps in our team.  Junior leaders can avoid this mistake by sharing ideas with their peers or mentors.   They might also set aside time in their training schedule to test the idea on a small scale. By testing early, junior officers can gain input from their NCOs and soldiers that will allow them to improve upon the idea and work out potential issues.

Strong execution is also important because many people are uncomfortable with change. To win over late adopters, junior officers need to validate that their new solutions bring real value to their unit. One way to do so is to measure this value relative to the status quo. Peter Thiel, the founder of PayPal and Palantir, wrote in Zero to One that a new startup must provide ten times the value of the second-best option or it won’t be worth a customer’s time to use it.^[x] By Thiel’s reasoning, junior officers should expect resistance to new ideas until the benefits are obvious to their unit. For this reason, junior officers should optimize their solutions to provide specific, measurable outcomes. This can be in terms of resources saved (such as time or money) or unit effectiveness. Communicating these benefits to the formation will allow junior officers to avoid the pull of the “this is how it is always done” mindset and ensure good ideas do not go to waste due to a lack of willpower.  

The Innovator’s Greatest Advantage is Agility

Many of the other teams in our cohort in the Spring Venture Lab competition were looking to disrupt billion-dollar industries with their new products. Why did they believe that their start-up, with limited resources and little experience, could beat an entrenched incumbent? They planned to use their size to their advantage. Small organizations are better positioned to pivot away from failures while established organizations often struggle against bureaucratic inertia that keeps them on a predetermined path. In a rapidly changing environment, this can give start-ups the edge they need to beat out the competition.

For our team, agility was important as we tried to find their right market fit. What started as a ticketing service for events ended up as a tool for small e-commerce businesses to drive growth. While these adaptations meant that hours of research went to waste, we were not encumbered by the same huge sunk costs that a larger organization would have when mobilizing its resources.

This advice may seem the most difficult to adapt to the Army, but leaders at all levels can benefit from agility in their quest to field innovative solutions. A  paper from McKinsey argues that leaders should see their organizations as living organisms rather than machines.^[xi] This means that leaders must be open to positive and negative feedback that will allow them to shape their solutions to fit the needs of their users. Junior leaders should take advantage of the relatively small size of their units by setting up processes for quick feedback on each program. While many units use AARs at the end of training to perform this function, junior officers could set up channels of communication during the planning phase that will allow them to receive input before the end of the mission. While it may not always be possible to act on this input, junior leaders should not be afraid to pivot from their original concept when they receive new information that contradicts their original assumptions

From initial idea to final product, innovative solutions will evolve many times throughout their lifetime. Allowing ideas to evolve will help leaders to eliminate the fear of sunk costs and get more out of the innovation process. Even large organizations can learn to be more agile by prioritizing the right projects. In doing so, leaders can give themselves the ability to pivot to more promising solutions.

 Risk is the Price of Opportunity

The final lesson I learned came from the investors—our key stakeholders. While we never got to meet them, they were a constant presence throughout the process. The goal for most startups in the Venture Lab was to get funding from a venture capital firm or angel investor. Venture capitalists take a very specific approach to risk that runs counter to the Army’s understanding of the subject. Most startups fail and venture capitalists expect to get little to no money back from most of their investments. Instead, they rely on a handful of their companies to return 100X or more for them to make money.^[xii] These investors manage a portfolio of risks by playing them off each other. For these angel investors,  risk is the price of opportunity. This approach has not only made many of them very rich, but their investments have helped to bring innovative solutions to the masses.^[xiii]

This is very different from how the Army approaches risk. We have known for a while that the Army overstates risk.^[xiv] In 2019, General Mark Milley lamented that the military is too risk-averse for the type of warfare that he imagines in the future.^[xv]  Doctrine on risk management explains in detail how to mitigate risks during operations, but makes no mention of leveraging risk to access potential opportunities.^[xvi] Despite this, our transition to mission command requires junior officers to become comfortable with taking prudent risks This requires junior officers to underwrite certain risks for their NCOs and soldiers. While the risks we face in combat are very different from those venture capitalists face on Sand Hill Road, adopting their attitude towards risk management could be invaluable when trying to create a force that can win tomorrow’s wars.  Getting comfortable with risk during training and in garrison operations may be the first place junior officers need to start.

 Final Note

 In looking at these four lessons, leaders must understand that new solutions, tactics, or technologies are not the final goal of innovation. Rather, innovation is a process that allows us to stay relevant in a changing world. The Army will need junior officers who can innovate and lead creatively so that they can motivate diverse teams to tackle new threats and challenges – including threats and challenges we haven’t identified yet. The lessons above, taken from startups can help leaders meet this challenge.

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2LT Bryce V. Johnston is a Military Intelligence officer and a Fulbright Scholar who studied International Development at the IE School of Global and Public Affairs in Madrid, Spain, where he took part in their annual Venture Lab. He previously studied American Politics at the United States Military Academy and can be found on Twitter under the handle @am_bryce.

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^[i] Alakson, E. (2016, May 4). The Army Is Falling Short in Developing Creative Leaders. Association of the United States Army. https://www.ausa.org/articles/army-falling-short-developing-creative-leaders

^[ii] The Office of Business Transformation. (2017). Army Innovation Strategy. U.S. Department of the Army. https://www.imcomacademy.com/ima/wp-content/uploads/2018/06/Army-Innovation-Strategy.pdf

^[iii] McCoy, K. (2021, March 2). Building the Next Generation of Boyds, Hoppers, Krulaks and Pattons. https://mwi.usma.edu/building-the-next-generation-of-boyds-hoppers-krulaks-and-pattons/

^[iv] Louis, J. A. (2021, April 7). Linking National Security and Innovation: Part 1. Center for Strategic and International Studies. https://www.csis.org/analysis/linking-national-security-and-innovation-part-1

^[v] America’s Most Innovative Leaders. (2020). Forbes. https://www.forbes.com/lists/innovative-leaders/#129ab3c26aa9

^[vi] Dernbach, C. (2010, March 22). Did Steve Jobs steal everything from Xerox PARC? Mac History. https://www.mac-history.net/computer-history/2010-03-22/apple-and-xerox-parc

^[vii] Graham, P. (2005, October). Ideas for Startups. http://www.paulgraham.com/ideas.html

The Science Behind Social Networking And Why MySpace Lost To Facebook. (2017, September 15). [Cornell Networks Blog]. https://blogs.cornell.edu/info2040/2017/09/15/the-science-behind-social-networking-and-why-myspace-lost-to-facebook/

^[viii] Suarez, F. F., & Lanzolla, G. (2007, April). The Half-Truth of First-Mover Advantage. Harvard Business Review. https://hbr.org/2005/04/the-half-truth-of-first-mover-advantage

^[ix] Kolata, G. (2021, April 8). Kati Kariko Helped Shield the World From the Coronavirus. The New York Times. https://www.nytimes.com/2021/04/08/health/coronavirus-mrna-kariko.html

^[x] Thiel, P. A., & Masters, B. (2014). Zero to one: Notes on startups, or how to build the future. Currency.

^[xi] Aghina, W., Ahlback, K., De Smet, A., Lackey, G., Lurie, M., Murarka, M., & Handscomb, C. (2018, January 22). The five trademarks of agile organizations. McKinsey & Company. https://www.mckinsey.com/business-functions/organization/our-insights/the-five-trademarks-of-agile-organizations

^[xii] Gompers, P., Gornall, W., Kaplan, S. N., & Strebulaev, I. A. (2021, March 1). How Venture Capitalists Make Decisions. Harvard Business Review. https://hbr.org/2021/03/how-venture-capitalists-make-decisions

^[xiii] Faria, A. P., & Barbosa, N. (2014). Does venture capital really foster innovation? Economics Letters, 122(2), 129–131. https://doi.org/10.1016/j.econlet.2013.11.014.

^[xiv] Summers, B. (2017, May 9). Slow, Inflexible, and Micromanaged: The Problems of a Military that Overstates Risk. Modern War Institute. https://mwi.usma.edu/slow-inflexible-micromanaged-problems-military-overstates-risk/

^[xv] Lythgoe, T. (2019, May 9). Our Risk-Averse Army: How We Got Here and How to Overcome It. Modern War Institute. https://mwi.usma.edu/risk-averse-army-got-overcome/

^[xvi] ATP 5-19: Risk Management. (2014). Headquarters, Department of the Army. https://armypubs.army.mil/epubs/DR_pubs/DR_a/pdf/web/atp5_19.pdf