6 Lessons of Creative Destruction from a Sushi Dinner

April 22, 2014

 

Is there any professional effort that requires more courage than innovating? Innovation tomes frequently focus on the creative aspects of product and service development, but that is only half of the equation. Execution is required to make a creative idea into an actual innovation.

 

“Execution” is a funny word. It has two meanings: 1) the manner in which something is accomplished, and 2) the carrying out of a death sentence. When I say, “execution is required,” you probably think that I am using the first meaning…but I mean execution in BOTH senses.

 

The insightful economist Joseph Schumpeter coined the term “creative destruction” as a description of the innovation engine that moves economies forward. Creating the future does not just mean adding something new to the world. It necessarily involves destroying something old from the world.

 

Creative Destruction in Action

 

At the height of the recent economic downturn, my son picked the “Mr. Samurai” restaurant as the location for his birthday dinner. He is a self-proclaimed sushi freak, and Mr. Samurai delivers not only good-quality sushi but also an excellent teppanyaki show at a reasonable price. The only negative was the facility itself: dated décor and a strip mall location made it feel more like a trip to a convenience store than to a quality dining experience.

 

As we approached, sheets of plastic on the storefront greeted us, billowing like sails in an ocean breeze.  “Oh no, they’re closed,” came my son’s voice from the back seat. It never occurred to me to check and see if they were actually open. We went ahead and drove up to the door, just in case. We were relieved to see a “pardon our dust, open during remodeling” sign.

 

The restaurant interior was in full Jekyll and Hyde mode. The half I remembered from previous visits was covered in canvas drop cloths, scattered tools, and stacks of assorted building materials. The other half, which had previously been a small ice cream parlor next door, was beautifully organized, inviting and stimulating to all senses. Old seating made of plastic and steel had been replaced by new seating of hardwood and leather. The window to the kitchen carved from painted drywall had been replaced by a walnut and polished-brass bar. Overhead, fluorescent lighting had been replaced by pendant chandeliers.

 

The scene perfectly captured the concept of creative destruction.  To create the new, the old had to be destroyed.

 

Why do it?

 

But why would the owners embark on such a risky endeavor? Mr. Samurai had been a successful restaurant already with consistently good crowds in spite of the décor. Why not just leave well enough alone? Consider the risks: in uncertain economic conditions, expenses like dining out are easy to forego as belts are tightened. Would a remodel actually increase customer traffic, or would it push away people who think that prices might go up? If traffic did increase, would it do so sufficiently to cover the money invested in the reconstruction, not to mention the additional rent for the expansion into the old ice cream parlor space? What would happen to business during the remodeling? I’m sure we are not the only ones who thought that they restaurant must be closed, so how many others just drove by?

 

While this little restaurant remodel may not exactly win any innovation awards, the questions to be answered and the risks to be accepted present very similar consideration to those we face as product developers. We embark on reinvention efforts without a crystal ball that offers perfect foresight into the future. We invest time, money and sweat in things that have no guaranteed return. We risk fortunes and reputations in a quest to make things just a little more functional, a little faster, a little cheaper, a little more efficient, a little more durable, a little bit safer, a little more…

 

The fact is, though, that we must take on such risks as part of survival and growth. Simply surviving requires change and adaptation. Truly flourishing requires even more.

 

Lessons from Mr. Samurai’s Creative Destruction

 

1) Face the fact that innovation requires not just creation, but destruction. Rarely is the destruction as literal as sledge hammers to dry wall, but at some point the products and services of the past must be sacrificed for those of the future. Making such a sacrifice requires courage and consciousness. You must think consequentially, that creating X will destroy Y, and much of the time, Y is something internal, something you own, something that you have relied upon. You have to be willing to let that go or face inevitable irrelevance. As Steve Jobs famously said, “If you don’t cannibalize yourself, someone else will.”

 

2) You must be honest with yourself.  I have no doubt that the owners of Mr. Samurai were very proud of their original restaurant, but they did not let their pride in the current product stand in the way of trying to make it even better. Challenging the status quo, especially in good times, requires an acute awareness of unfiltered reality. You must be in touch with your current strengths and weaknesses, and with your potential. You must be aware of the real environment around you.

 

3) Innovation takes time. The owners of Mr. Samurai did not simply lock the doors one night and return the following morning to a new restaurant. The construction process lasted months. Prior to the construction process was the planning process. Prior to the planning process was the saving process. The will to make it happen had to last for a long time, through much turmoil and amid constant distractions. Such fortitude requires a special balance of opposing forces – the paradox of patient impatience. Impatience channels the drive and energy required to slog through what Schumpeter called “times of effort and sacrifice.” Patience provides the stamina to persevere until what he called the “harvest [that] comes after.” Impatience creates the sense of urgency to push forward quickly, while patience creates the discipline to push forward correctly.

 

4) Consciously choose between “pardon our dust” and “voila!” In renovating the restaurant, Mr. Samurai chose to remain open throughout the process. People like me could see what was going on throughout the transformation process. Sometimes, that’s not a good thing. Nothing creates a vegetarian faster than a visit to a sausage factory. In such cases, it is best simply to reveal the finished product, only after it is completely finished, with a cheerful “voila!” Sometimes, though, the backstage pass is a great thing, inviting customers to be part of the development itself.

 

5) "Chance favors the prepared mind." As I asked myself why Mr. Samurai would do those renovations at that time, in that economy, with shops going out of business all around, it occurred to me that maybe these conditions were actually fortuitous. The space next door became available when the ice cream parlor went out of business. Rents may have been driven lower due to lack of demand for space, and the low demand for new construction could have made remodeling costs more competitive. If the owners had been saving their profits for reinvestment, then that may actually have been the perfect time. Innovative organizations can seize upon opportunities with advanced preparations, focusing amassed resources opportunistically when the time is right.

 

6) Communicate with your customers. From the road, Mr. Samurai looked closed. With the rash of business failings creating empty storefronts throughout the country, it was the act of purest desperation, based on wanting to fulfill a child’s birthday wish, that made me even bother to go see if the restaurant existed anymore. They needed signage readily visible from the road to let people know that they were open during construction. As you develop new products and services, how are you communicating with your customers? Are you keeping them apprised of your plans? Are you building excitement for something coming soon? Are you effectively listening to their feedback, needs and desires for your products and services? Have you considered what channels might be required to keep people connected with your business while you are still preparing to wow them with your innovations?

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