Catching the Innovation Wave

What the risk-taking, big-wave-surfing community has to teach executives about finding new ideas and riding the curl of growth

On Jan. 12 surfers from around the world converged on Maverick's at Pillar Point, just a few miles from San Francisco, to challenge each other on the big waves that have made this a legendary surfing destination. The sixth Mavericks Surf Contest had been announced only forty-eight hours earlier to ensure optimal wave conditions for the contestants. Surfers from as far away as Australia, Brazil, and South Africa scrambled to make their way to this invitation-only competition. It was magical to watch these athletes challenge twenty-foot waves with an ease and grace that made it all seem so natural.

Beneath the surface, though, there is a different story here, one that contains important lessons for business executives. While all attention was on the athletes riding their surfboards, the technology and techniques used to master big wave surfing have evolved over decades, driven by dedicated, perhaps even obsessed, groups of athletes and craftsmen. Executives can gain significant insight into the innovation process by looking at this sport.

Find Your Relevant Edge

First, if you want to push your performance levels, find the relevant edge. In the case of big wave surfers there has been an ever-expanding search for the breaks that would produce bigger and rougher waves to test new board designs and surfing practices. In 1953 a group of Southern California surfers, including Greg Noll, inspired by newspaper photos of surfers tackling fifteen-foot waves, boarded flights to Hawaii and made the trek out to Oahu's Makaha Beach. There the warm water and gently tapered waves proved to be a fertile ground for big wave surfing. Major breakthroughs in performance did not occur in the milder surf of Malibu, but in the pounding surf of Hawaii's Waimea or Jaws, or the notorious Teahupoo break of Tahiti.

Following the lead of big wave surfers, business executives need to find relevant edges that will test and push their current performance. For example, companies making diesel engines and power generators should be actively engaged in finding ways to more effectively serve lower-income customers in remote rural areas of emerging economies. These demanding customers could prompt significant innovation in both product design and distribution processes in an effort to deliver greater value at lower cost. The innovations resulting from these efforts on the edge could lead to significant improvements in their product lines.

Assemble Innovations Hothouses

Second, attract motivated groups of people to these edges to work together around challenging performance issues. In the late 1950s, Waimea Bay, on the North Shore of Oahu, became the next test bed for athletes seeking to push the boundaries of big wave surfing. In the isolation of the North Shore, dedicated surfers spent eight to ten hours each day, every day, challenging themselves and each other on the big waves. The real advances in surfing technology and practices occurred at the breaks where surfers gathered and formed deep relationships over extended periods of time. They learned rapidly from each other and pushed each other to go to the next level.

Large companies have become very adept at establishing remote outposts in places like Beijing, Hyderabad, Haifa, and St. Petersburg to attract local talent and push forward challenging research and development projects. Often, though, these outposts either become disconnected from their parent companies or fail to establish deep links with other leading edge participants in the local area. The key challenge is to connect these company-owned facilities more effectively with their local environments as well as with each other through challenging and sustained innovation initiatives that build long-term, trust-based relationships.

Performance improvement generally comes first in the form of tacit knowledge that is difficult to express and communicate more broadly. You literally have to be there to gain access to this tacit knowledge. Big wave surfers who watched Laird Hamilton tackle the Teahupoo break in Tahiti for the first time in 2000 noticed that he put his right hand into the wave on a left-breaking killer wave, something unheard of in surfing. It was an instinctive move on Hamilton's part; he had never done it before and he was not even aware of doing it, but it was enormously effective in coping with the distinctive power of these waves. Those who were there to observe this and who had deep understanding of the practice of big wave surfing realized immediately that a powerful new practice was being developed.

Reward Risk Takers

Third, recognize that the people who are likely to be attracted to the edge are big risk-takers. Greg Ambrose, a surfer, observed that: "When surfing Waimea, it is essential to have the proper crazed attitude that implies a certain reckless disregard for personal safety. If you paddle out thinking you are going to get hurt, you will [be]. If you think you can't make the drop, you won't. If you begin to wonder what in the world you're doing out among those menacing waves, it's time to be thankful you're still alive and head for the beach."

This is a key reason why the edge becomes such a fertile ground for innovation. It attracts people who are not afraid to take risks and to learn from their experiences. They relentlessly seek out new challenges. Executives need to be thoughtful about how to attract these people, provide them with environments to support risk-taking and reward them for both successes and failures.

A conventional response to this challenge is to create highly segmented organizations—one part of the company focuses on the core business while separate organizational units focus on highly innovative (and more risky) business initiatives. The challenge with this approach is to bring the edge back into the core. The innovations spawned in edge organizations are often critical to the continued success of the core business, yet the different cultures, mindsets and skill sets create significant barriers to learning. Executives need to balance organizational focus with aggressive performance challenges and incentive structures that reward collaboration across these organizational units.

Celebrate Diversity

Fourth, recognize that the edge fosters not just risk-taking, but very different cultures that are also "edgy." The advances in big wave surfing did not come from the casual surfers but from those who developed an entire lifestyle and culture, fostered by intense and even obsessive concentration on pushing the envelope. The early big wave surfers in Waimea were so obsessed with the sport that they lived in close quarters right on the beach and relied on the sea and the occasional stolen chicken or pineapple for food. Dismissed as "surf bums" by mainstream society, they developed their own distinctive identity. Executives need to find ways to protect and honor these edgy cultures, whether they are inhabited by tattooed Web designers or the next generation of employees who learned how to innovate as members of guilds in World of Warcraft.

Fifth, find ways to appropriate insights from adjacent disciplines and even more remote areas of activity. The aerospace industry could not be further removed from surfing, yet early advances in surfing technology came from this industry, because some of the employees in this industry were also avid surfers. Some of Laird Hamilton's greatest insights came from his experiences as an expert windsurfer and his colleagues' experiences with snowboarding. By attracting diverse backgrounds and experiences to the edge, executives can foster creative breakthroughs.

Mix Practitioners and Developers

Sixth, bring users and developers of technology close together. It is no accident that the most innovative surfers also tended to be expert shapers of surfboards. These folks not only designed surfboards but shaped the materials into the finished product and then took them out to life-threatening breaks to test and refine them. They were relentless tinkerers, integrating experience, intuition, and craft to come up with creative new boards. Downing and Noll were both proficient shapers, driven by their experiences in using their own surfboards, and Laird Hamilton is the adopted son of one of the most renowned surfboard shapers, Billy Hamilton.

Technology and practice are intimately linked. Very little performance improvement comes directly out of the technology itself. It is only when seasoned practitioners engage with the technology, especially in close-knit communities, and evolve their practices to better use it, that the real performance breakthroughs occur. One of the big wave surfers watching Laird Hamilton getting towed into a big wave said the wave was no bigger than the waves that had been paddled before, but the technique was clearly different. It set the stage for a new "S-curve" of performance improvement. Evolving practices in turn generate insight for product designers riding future waves of design innovation.

Finally, executives can profit from understanding the loose practice network that evolved around big wave surfing. Key individuals like Greg Noll, Laird Hamilton and Jeff Clark have played pivotal roles in shaping and growing this network. They certainly have not applied the traditional management techniques that most executives use, but they have been very effective in attracting world-class talent to collaborate with them in their athletic and commercial efforts, focusing that talent on challenging performance goals and helping to disseminate the learning that came from these efforts. Complex and shifting relationships among athletes, commercial enterprises, and competitions shaped the advances we have seen in big wave surfing. These new management techniques, or perhaps more accurately, orchestration techniques, will increasingly determine who creates value and who destroys value when seeking to innovate on the edge.
- businessweek.com, January 30, 2008