Amy Wilkinson, founder and CEO of Ingenuity and lecturer at Stanford Graduate School of Business, draws on her unique experience as an entrepreneur, business executive, and academic researcher to reveal how companies and leaders can answer disruption with the forces of innovation. As CEO of Ingenuity, Wilkinson provides C-suite executives, entrepreneurs, and investors with the tools to ignite growth in business. Wilkinson teaches Fortune 500 companies to constructively engage and retain their talent pools, while finding and fostering entrepreneurs within their ranks. This allows even the most established firms to unleash the powerful forces of creative dynamism.
Author of the global bestseller “The Creator’s Code: The Six Essential Skills of Extraordinary Entrepreneurs” (Simon & Schuster), Wilkinson is a leading authority on how business leaders master the skills to excel in our rapidly changing economy. Driven by the belief that everyone must think like an entrepreneur, Wilkinson assembled one of the largest datasets on the mindsets and skills of high scale entrepreneurs. Amongst her 200 high-profile interviewees are the founders of Airbnb, LinkedIn, Tesla Motors, and 23andMe.A veteran of McKinsey, J.P. Morgan, and the start-up world with her previous company Alegre, Wilkinson has proven adept at breaking through notoriously high glass ceilings. Having worked as a White House Fellow and policy aide on both sides of the aisle, Wilkinson is also an expert on the increasingly turbulent impact of policymaking on companies’ global supply chains, profits, and competitiveness.
Wilkinson serves on the board of Innovate Corp (VATE) and US Bitcoin Corporation. She is an innovation expert for the World Economic Forum and The Wall Street Journal, a member of the Council on Foreign Relations, an Eisenhower Fellow, and an Ewing Marion Kauffman Foundation grantee. Amy has been a keynote speaker for corporations and conferences around the world, opening audiences’ eyes and providing the rare insight needed to capture growth with startup-like agility.
The six essential skills framework is the basis of a couple of different courses that I teach in the business school at Stanford.
The first skill is called Find the Gap. What you really have to do to be a visionary leader is see what others don't see, right? You need to be able to go into the marketplace or step out of your routine and spot something that can drive growth that can change a process, help you alter a product, help you, sometimes its efficiency but really more than that, if you want to find a gap, you want to see something that surprises you.
And one way to do that is as a sunbird. This is giving you patterns for seeing gaps. Sunbird is the Australian word for a hummingbird. And just like a bird would be in one place, pick something up, fly it across and put it down somewhere else, you want to be able to lift and shift ideas. Howard Schultz is an example of this. It's an example I love to use because we all know what Starbucks is. He doesn't invent coffee culture, he sees it. And this is an important thing to harken back to the beginning of a very large and visionary kind of company. He goes to Italy, he's on a trip, he's at a conference, and he's going between the hotel to the conference. What he realizes is that all the Italians are going to a coffee house, and he sees this gathering spot. It's a community spot. And that doesn't exist at the time in the United States. You could get coffee in a diner, you could get coffee at your house, but there weren't just coffee shops, coffee houses all around. And what he really spots is the basis of Starbucks' business model, which is called the third location. If home is your first location, and work is your second location, the third place the Italians were going was to the coffee house. And that's what Schultz said, you know what, we need to develop a third location, that third place. That's the basis of Starbucks.
Very few people know that he didn't get it right the first time. He did an exact copy paste. I grew up south of Seattle, so I was there at this time. The first Starbucks looked like a very Italian concept. It had a high stand-up bar, white porcelain cups, bow tie clad waiters, opera music in the background. It was too Italian for the Pacific Northwest. You don't just want to copy paste something. You don't want to literally replicate what you see.
What you want to do is ask a whole lot of questions. Probe, figure out what the underlying structure is to make that concept work. And then do a little twist on it. Starbucks, as you know, is the third place for many people. You can take a laptop, you can read the paper, you can have a job interview, you can go on a date, you can sit there as long as you would like to. It's designed as a gathering place but with easy listening music and much more informal-type concepts. This is one way, if you want to spot a gap. Look into the world at things that are working, and then start asking a bunch of questions about what makes them work. And what you can lift across or what you can import or export. And giving you a geography example, you see something in one geography and you move it to another geography. Starbucks continues to innovate in this way.
I was a student for seven years at Stanford. Now, I've been back on faculty for seven years. But when I was a student, the Google guys were on campus. What I can tell you is they took an old technology called PageRank, it was the ranking of our library, Green Library card catalog system, they moved that concept, and they applied it to the World Wide Web, created search as we know it. There are lots of different revolutionary companies and concepts and products and services that are spotted in this way. It's one way to find a gap.
A next way that you could find a gap is as an architect. Think of yourself as an architect. What you want to do is design piece by piece, from the ground up, a new building. It would take a foundation and a first floor and a second floor and a third floor that would create and build something new. But where do you have the space to do that? What you look for in the world of spotting an opportunity or an open space. Do you need some kind of rest in order to build something in this way? And that is most often our problem.
If you spot an opportunity, you look for something that's bothering you, something that's bothering other people, a friction point, a bottleneck. You go into the world asking where's the pain, where's the irritation, and then you flip that over and say, that is an open space. That's where you can build something new. Sara Blakely is one of my favorites out of my original data said. As many of us know, she designed an undergarment. She was a fax machine sales woman for seven years in Atlanta, and she was wearing nylons under white linen pants. She wanted a better undergarment. She went to every mall, talked to all kinds of retailers. It didn't exist. She was cutting the feet out of her nylons to wear under these white linen pants. They were rolling up her legs, that was an irritation. Irritating problem. She solves it by designing Spanx. At the time, she becomes the youngest self-made female billionaire. That's a problem that is not just hers, suddenly, lots of people had the same type of problem, wanted a different undergarment, creates a very big opportunity.
This is often called reasoning by first principles. Mathematicians, physicists, lots of different disciplines teach breaking a problem down into its elements and pieces, questioning every assumption, building something new from the ground up. That's the approach to spotting a gap in a different way as an architect. Spotify is one of my favorite examples here of revolutionizing music. Takes two visionary people to come along and say we could have a subscription-based model. Music has fundamentally been changed, and it took a few people to come and break down the old model, build assumptions, and come up with a new creation that the rest of us would use. That's a way to think about spotting an opportunity.
Third way is as an integrator. At the intersection of ideas, a lot of novelty is created. A third way you can spot an opportunity is to put things together that haven't been put together before. And if you take an all-terrain vehicle, you might see this in the Colorado Rocky Mountains, and the luxury town car. You might see this in Manhattan, and you put them together, which hadn't been put together before, you get luxury SUV. Ingenuity, our company, has done some work with Porsche, what I can tell you is this is their number one revenue generator. And if you are traditional German engineering, you don't love the idea of making an all-terrain vehicle or an SUV, but it creates a whole new category. You see this in traditional business again, you see it in spotting brand new ideas as an entrepreneur. Put things together that haven't been put together before and you will create something, oftentimes that can change certainly your business or your nonprofit, or the things that you're working on.
Canva is a great example. I'm imagining many of you use this. It came out of Australia. It's putting together all kinds of different design tools to help the average person, someone at home, design their own presentations. Before that, there were individual places you could go for bits and pieces of design, maybe you could hire a designer. But putting all of these things together, integrating them into one place, created an absolutely enormous success in terms of a new company. Walmart is one of the examples I've recently written a case on, and how they're trying to drive innovation to compete against Amazon. Walmart, is fortune number one, for those of you that don't know, it is the world's largest company. There are 2.2 million employees at Walmart. This is a very difficult, heavy asset stores, big legacy business across the United States. And one thing that they've considered and are actually doing, which is very fascinating, is looking at urgent care or looking at health care.
Basically their head of strategy, Lori Flees, a woman that I've written a case on, she basically started looking at the core customer of Walmart. Their number one concern is access to healthcare, price of healthcare. The Walmart stores, as they go more and more online, have square footage that's unused. So a huge innovation here is putting these two things together. You'll get dentistry on the store floor, family practice medicine, women's health, etc. That huge legacy business is integrating a new totally different type of product and service onto their store floor. There are examples here of startups. There are examples of legacy businesses. My data set originally had a number of social entrepreneurs and nonprofits in it. This is a way, a third way, of spotting a gap. Putting things together that haven't been put together in the past.
The second skill is called Drive for Daylight. The idea is in a fast-changing world, in a turbulent world, you've got to always look for the light on the horizon. You have to look forward. To be a visionary leader, you have to know what your purpose is, what your mission is, where you're trying to go. And there's great research on to go thinking, which is when you're committed to a goal, if you're focused on what's in front of you, it's cognitive psychology research, you are two to three times more likely to complete that goal, than if you're focused on the ground you've already covered to date. One very easy thing, accessible to all of us, is to make sure that you are focused on what's in front of you. This research is across business, it's across education, it's across health.
There are lots of different examples. One of the easiest ones to grab on to is if you are running a marathon, you're in mile 20, and you think, I've already run 20 miles, your brain basically signals to you that your lungs are burning, your legs are aching, you have blisters, you've already covered 20 miles, and you slow down. If you instead think, I have six miles to go, your brain throws concentration, focus, motivation towards closing that gap, you're two to three times more likely to finish with a better time. I tell my students all the time in the academic space, this is shown that if you're 70% through a semester, for example, and you think, I have covered 70% of the material, your grades go down. If you think, I have 30% to go, I have this in front of me, your grades go up. Certainly, if you're trying to navigate in a turbulent world, if you're trying to lead a group of people, even if you're just trying to accomplish what you want to set out to do, your own goals, you want to keep your focus on what's ahead. What's to go.
Many of you probably have taken the 23 & Me genetics test. This is a long horizon view. They are thinking way ahead on how we would potentially crack a number of diseases with a dataset of the human genome. We would be able to have genetic material, figure out diseases, and then solve them. But in order to do that, you have to really take a visionary long horizon view. She's run into a number of obstacles as she's gone along. That's the other thing to say, if you have a long-term view, you can more easily navigate the setbacks that come.
Another thing you look for, if you're driving for daylight, if you're driving a very fast race car, this is originally the analogy, if you're driving really fast, you're always looking in front of you, you need to scan a little side to side, what you look for when you're scanning is lead users. This is the idea of a GoPro. You see there that extreme sports, and in this case, some athletes that wanted to video record their own extreme skiing, created an entire concept. Lots of times in the marketplace, you're looking for a homemade solution. GoPro was very much homemade at the beginning, was people with video cameras, they were duct-taping onto helmets and recording things. If you want to see where the future is going, oftentimes there are people being lead users. Maybe you are a lead user, but maybe you can spot them by watching who's hacking a solution to solve their own problem. Who's putting something together that maybe looks strange, but it could go mainstream. Airbnb is an example of this. These are the three founders, and they solve their own problem in San Francisco because they get a note under their door that their rent is up 25%, and they can't pay the rent. So they basically invite some other designers, two of these guys are out of the Rhode Island School of Design. They say, they're all going to a conference, if you want to sleep on our air mattresses and pay us a little bit towards our rent, we'll leave a mint on your pillow, pick you up at the airport, we'll go to the conference together, we'll make it really great for you. That seems like a fringe idea at the start. Airbnb today has more people staying in its lodging around the world than any major hotel chain. So you can see this homemade solution beginning very much to go mainstream.
And the last thing about driving for daylight is you want to avoid nostalgia or looking back or being emotional about things. Steve Jobs was amazing at this. Many of the people that have worked for him have said that he was willing to cannibalize his own business. And when you think about iTunes, once you put music on the phone, you knew you were cannibalizing the iPod, for example, which had come before. He was absolutely ruthless about continuing to look forward and not being stuck in any kind of past even if it was a successful past of his own product. Here's Whitney Wolfe Herd, she's an amazing example, the Bumble founder. She'd been a co-founder at Tinder, had a very difficult situation there, was marginalized as a woman, left, started a womens-first dating site. And then she becomes now the youngest self-made female billionaire. But you have to not be emotional about things, be able to step back, re-gear and always look forward.
The third skill is called Fly the OODA Loop. It stands for observe, orient, decide, act. There it is. It's originally a fighter pilot's mantra. It's how the United States has trained our fighter pilots to observe with real situational awareness, orient, ask a lot of questions and try to figure out as fast as you can what matters and what doesn't, take decisions, and take actions. If you can do that, even a split second ahead of a competitor, you change the dynamics of a fight. And you can get inside a competitor's learning loop. You get inside the loop, the opponent is reacting to a world that's already changed. You've taken a decision, you've taken an action, and you have literally altered what the landscape looks like. Visionary leaders have to be fast moving leaders. You have to be willing to observe things very quickly, orient to them, take decisions, take actions.
PayPal is a story out here from Silicon Valley of an amazing group of early founders, they at PayPal had six different business models in 18 months. Six different things they thought they were in a year and a half. They actually make what we all know today as an online currency exchange. Basically, it wasn't started out like that. Originally, it was supposed to be beaming money between palm pilots, the palm is gone. They continued to observe, orient, decide, act. The more interesting thing is they had a success in 2002, when most of the world thought the tech bubble had burst and technology was over. I came out of Stanford Business School that year, and I can promise you, it was dead out here. Rent was cheap. There were no cars on the freeway. There were no new technology companies starting up. This same group of people observes, orients, decides, and acts and starts LinkedIn, YouTube, Yelp, Slide. It's all of Elon Musk's follow-on businesses.
They put the first investment behind Mark Zuckerberg at Facebook. They literally go on to see the entire next wave of the internet. I've spent time with all of those individuals, and what they say is you have to observe what surprises you. You have to orient very quickly, and you have to move.
Jeff Bezos is an example of moving quickly and making decisions quickly. This is inculcated into the culture of Amazon. And one of the things he says is, you have to make these calls with 70% of the information that you wish you had. If you wait, you're too slow. You've got to be able to move through decision cycles.
Another thing that Amazon does is talks about one-way doors versus two way doors.
I think this is one of the greatest takeaways, especially for corporate leaders, that I teach at Stanford Business School, is a lot of decisions you think of as a one way door, or oh, I can only make that decision once and the world has totally changed.
They're not one way doors, most decisions are two way doors, which means I can make the decision, and if it's not a good one, or my team can be empowered to make this decision. If it's not a good one, we can all double back, you can come back through the door and we'll try again.
And two way doors are literally the vast majority of decisions. It's launching a product. Oh, if it didn't work, we'll launch again. It's a marketing campaign. Oh, that was a flop let's do a new campaign. Let's hire someone even, okay, that didn't work. Well, we'll let that person go, we'll hire somebody new. There are lots of different two way doors. You might think that it's a one way, you can never come back from this. But the vast majority of decisions that you make, you can come back from.
A one way door, in the example of Amazon, would be the acquisition of Whole Foods. Okay, once you make the acquisition of Whole Foods, you go into brick and mortar retail, that's a big decision. What that requires is more time and more senior leadership to think it through. But otherwise, they're empowering people at all levels across that very large business now to make decisions. You have to be able to empower people and then know that you can continue to make good decisions.
Skill four is called Fail Wisely. All of us, especially if you're building something that world hasn't seen, if we're all navigating through turbulence that we haven't experienced before, you're not going to be able to be perfect at it. What you want to do is fail wisely. You want to have setbacks, but you want to turn them into successes, right? You want to learn from them.
If you think of failure as learning and what you can learn and what you can gain and what you can take forward, you propel yourself and your team, your organization, to a lot faster and greater success. One thing that my research shows on this is that great visionary leaders set a ratio ahead. For example, one in four things that my team and I try is not going to work, that's what we want. Maybe it's one in five, maybe it's one in 10, maybe it's one in three. But you can't have a perfect record. And you don't even really want people to try to have a perfect record.
You just want to experiment and have incremental failures and avoid catastrophic mistakes. Jessica Heron runs one of the fastest growing startups now; it's called Stella and Dot. It's a direct to consumer women’s jewelry and handbags and skincare product business. She's backed by Sequoia, which is one of the absolute top venture capital firms worldwide. What Jess will say is one in three is her failure ratio. One in three things that they move in their inventory is not going to work. And she just wants the Salesforce to tell her love it or lose it. You can love this, this wonderful piece of jewelry that's selling really really well or lose it, lose it as fast as possible out of the inventory line. So one in three.
They're experimenting all the time, and they're moving just as quick as they can towards things that do work. Eric Schmidt at Google started a ratio, this is for management time. 70/20/10 idea is that 70% of your time should be on core business, 20% on side business, 10% on moonshots. And right there, the senior leadership of Google is probably at 30% of the time, maybe not successful, certainly not driving the core business, but that's what they want. They want you to allocate your time and your energy and your focus 70/20/10.
There's great research by Carol Dweck, she's out of Stanford as well, in the psychology department. Probably many of you know the growth mindset work that she's done. But what it says is you can grow through setbacks, you have a pliable mindset, to keep learning, to keep improvising, to keep trying. It's a lot about resilience. You take feedback as constructive. And if you can cultivate this type of mindset, you're going to have setbacks, but you're going to continue to persevere. Versus a fixed mindset, which would say, I'm right or wrong, it's black or white, I'm smarter, I'm not smart, I'm successful or not successful. You don't like to be challenged in that case, and you certainly don't like to be wrong. And that can really hamper and hinder people.
Her original work was done in the education system in New York City, and now it's applied to all kinds of things in life. You want, whether you're a student, a kid growing up, a parent or someone in the workplace, you want to try to be having this growth mindset. Alright, the fifth skill is called Network Minds. This is about networking the brain power of other people to help you solve problems in new ways. David Kelly is the Founder of IDEO, and the D school, the design school at Stanford. One of the conversations I've had with him over the last 10 years is, how do you harness cognitive diversity? How do you pull in different points of view and get people to build on each other's ideas? Diversity, we often talk about what we can see on the outside. The problem solving diversity is really what points of view do our brains bring to solving a problem? Can you put together a mathematician with an anthropologist, or an introvert with an extrovert, or a convergent thinker with a divergent thinker. And as you figure out how to take on challenges, navigate turbulence, it's going to take lots of different points of view in order to be a visionary leader, spot the future, create the future. Coursera is an example.
The very last skill here is called Gift Small Goods. And the idea is, you want to be generous, you want to be helpful. A small good would be a small act of kindness, it would be something you could do for someone else that would be valuable to them. It's basically a five-minute favor. And in an economy in which we are networked together, your reputation is very transparent. And it's important to realize that in, certainly in this group of people, we can all find out a lot of information about each other.
In 24 hours, I can find out about anyone in this group, and I can ask, are you good to work with? Are you helpful? Do you assist your colleagues? If that's the case, then people want to come work with you, information comes to you, deal flow comes to you, lots of wonderful things happen if you've got a reputation for really being good and being helpful. The opposite is also true. If you start asking around about people and you find someone hoards resources, they take credit for everything, they mistreat their colleagues. And #MeToo has been a very big example of this transparent reputation has dislodged many people at the top of power from their jobs. It's the power of reputation and speed of communication and ability for the transparency of actions that's changing here.
It's the basis of LinkedIn. Reed Hoffman and I have had conversations going on eight or nine years about, if you're in a networked economy on an economic grid or a graph, as LinkedIn is linking us all together, it's very easy to do a five minute favor. Forward someone's resume, make an introduction, be helpful. It's a whole lot easier to do that. Again, the opposite is true. It's it gets really harder to burn someone because we can all on LinkedIn, ask about each other. So the bottom line here of this skill is that it's in your self-interest to be good. And I think that's one of the most interesting things of technology is with transparent reputation, it actually puts some pressure on being a better colleague.
One example is First Lab. I love this example. I've recently written a case on Eve Burton, who's the general counsel at Hearst. She has started a lab accelerating women entrepreneurs. She's trying to play the ideas and support women in new and different ways. They have a scouts network across parent company, Hearst, there are women who are scouts, and they are all drawn to spotting these next women entrepreneurs or helping them. Helping them with legal work, helping them with social media marketing, helping them with data science, etc. And it's a core to not only accelerating the women entrepreneurs, but to revitalizing a very large, traditional parent company as well.