Proximity Innovation: The Secret to Reshaping Markets

PMI CEO Pierre Le Manh sits down with innovation expert, author, and founder of TWIN, Robert C. Wolcott, to talk about how technology is revolutionizing customer relationships. Learn how industry leaders like Domino's and Emirates Airlines are transforming their operations through proximity innovations and discover why closing the distance between businesses and customers is the transformative key to future success.

Transcript

Rob Wolcott  
Even a small, incremental improvement in proximity compared to the competition can lead to very significant competitive advantage. Proximity actually is the answer for resilience and also for sustainability — if we do it right. This is not a nice-to-have. This is a must-have. 

MUSICAL TRANSITION 

Pierre Le Manh  
That is the voice of Rob Wolcott. He’s an innovation expert, professor and author of a book called Proximity. I actually wanted to talk with Rob because his insights about proximity provide very clear lessons on the future of business transformation, and also, it provides a roadmap for bringing innovation to life.  

I am Pierre Le Manh, CEO of the Project Management Institute (PMI). Welcome to The Shift Code, a podcast dedicated to the intersection of leadership, change management and real-world impact.  

Now, in this episode, I’ll talk with Rob about how technology is bringing products and services closer to customers, and the big, vast opportunities that it all unlocks. From Domino’s pizza to the mountains of Bhutan, from Emirates, the airline, to Haier in China, we explore together how proximity is already altering the marketplace — and what any CEO, any project leader, any team member can do to make the most of it.  

So, let’s get to it. This is The Shift Code. 

MUSICAL TRANSITION 

Pierre Le Manh  
I’m Pierre Le Manh, and I’m here with Rob Wolcott, the founder of TWIN, The World Innovation Network. Rob is also a professor at Northwestern’s Kellogg School of Management and author of the book "Proximity: How Coming Breakthroughs in Just-in-Time Transform Business, Society, and Daily Life." Rob, thanks for joining us. 

Rob Wolcott 
Thank you so much, Pierre. This is great. I look forward to engaging with you and the PMI community. 

Pierre Le Manh 
Wonderful. So, Rob, in your book “Proximity,” you discuss how businesses are evolving in the post-digital world, but how would you define business transformation overall? 

Rob Wolcott 
Well, great, that’s a big question. I guess it relates very much to the genesis of “Proximity." It came from this question, Pierre, which is: What is fundamentally different about digital—all things digitally enabled, any and all things digitally enabled—from the industrial age? And what we find when we take a close look is that digital, compared to industrial technologies, allows us to compress capabilities of all sorts in smaller and smaller packages, distribute them all over the economy, ever closer to each moment in time and space. And this is proximity — digital compels value creation ever closer to the moment of actual demand and time and space. And we’re not saying just a little better supply chain management, we’re saying, “This is predictive about where the future of every industry is going.” 

Pierre Le Manh  
So, how do you think traditional businesses will be affected by this concept of proximity? 

Rob Wolcott  
One observation I’ll make, Pierre, and I’m sure you and many of your listeners have seen this before, established enterprises see things coming. It’s not that they don’t see these new technologies and say, “Oh my gosh, who would have thought artificial intelligence?” But what they tend to do is they take the new technology, and they say, “What could we do with this technology to be a little better at what we already do?” And that’s a great exercise. We should do that, but it’s not enough. Because many of these technologies allow us to do things we could never have done before, which is a completely different exercise than asking, “How can we incrementally improve what we already do?” 

Pierre Le Manh 
Do you have some examples of companies that have really transformed using proximity as opposed to incremental changes as you were describing? 

Rob Wolcott 
So video streaming — I mean, it’s so obvious, and of course, the content itself is all digitalized, so it moves at the speed of light. It’s easy to see how video streaming can be available anywhere, anytime, to anyone. But back in the ‘90s, that wasn’t obvious, and Netflix decided, “Hey, we’re going to try and pioneer this,” and over time, that became video streaming. So, today, you can watch any video you want, anytime, anywhere, for the most part. Now that means you can binge-watch “The Kardashians,” so we’re not saying that everything is great necessarily, but the fact is that the provision of video content is already 100% proximate, but the production of most of that content is not. The production of that content was months ago. Maybe it was even decades ago, if you’re watching “Citizen Kane,” for instance, but where are we right now, Pierre? We’re at the knee of the curve with generative AI, and I’m sure you’ve all seen examples of Sora where you create a video with a few prompts, and in a matter of a few minutes or a few hours, you’ve got brand new, compelling video content. It’s still early, but imagine where we’ll be in three years, five years, 10 years, 20 years when eventually we’re creating video [in] real time from whole cloth for an audience of one. That’s an example of the production of video content being entirely proximate, whereas already the provision of video content is entirely proximate.  

Pierre Le Manh  
Right. We’re actually seeing these experiments in advertising, for instance. 

Rob Wolcott 
Yes, exactly — platforms coming up with what might matter, what might connect with each individual consumer in the moment. And again, in the book, Kaihan Krippendorff, my co-author, and I are not saying that this is going to be nirvana, “This is all going to be great.” There are going to be a lot of challenges we face as a result but also extraordinary opportunities. And, Pierre, this is not just relevant for digitalized content. It’s also relevant for products, for services, for experiences. I mean, think 3D printing, think controlled environment agriculture. All of these things are percolating right now. They’re not ready for primetime in many cases, absolutely not economically viable in many cases, but in some cases, they are already economically competitive in making people money.  

Pierre Le Manh 
Don’t you think that even incremental improvements or transformations triggered by your concept of proximity are still worth it? 

Rob Wolcott  
Oh, absolutely. As a matter of fact, Pierre, in the appendix of the book, we have “Proximity Strategy Workbook,” and we have an exercise that helps companies look much further out into the future for bigger ideas and opportunities, but we also share an approach to identifying near-term opportunities. And it’s important to note that even a small, incremental improvement in proximity compared to the competition can lead to very significant competitive advantage.  

So, to give an example that everybody will recognize, we all know Domino’s pizza is about delivering pizza fast. Whether you like the pizza or not is another question, but nonetheless, they’ve been focused on bringing pizza as quickly and effectively to consumers as possible. A number of years ago, Domino’s said, “You know what? We have a lot of digital data about where the pizza is in the production process, what people have ordered, whether it’s in the car, on the way to someone’s home, for instance. Why don’t we take those data, and why don’t we make them accessible to consumers so they can track the progress of their pizza, sort of like UPS does with packages and all this?” And that’s an example of making a proximity improvement to an existing model that had a significant impact on consumer happiness. And by the way, during a 10-year period that we studied for the book, if you had invested in Domino’s pizza, you would have made a lot more money than had you invested in Google. So, this is meaningful stuff. 

Pierre Le Manh  
That’s fascinating. Okay, you mentioned other examples of a massive transformation that will come from this concept of proximity in other sectors. 

Rob Wolcott  
In December of 2022, I was speaking in Sharjah in the UAE, and during that trip, I had the opportunity to visit Bustanica in Dubai. Bustanica is the largest vertical farm in operation, still today in the world, and it’s a few miles from the Dubai airport. Bustanica was a partnership with Emirates airlines, and in this facility, they grow leafy greens and herbs. And first of all, I have to tell you, the quality of this produce is as good as anything you’d find in a French farmer’s market, no offense. I mean, it was really good. But here was the exciting part — I got on my Emirates airlines flight back to New York the next day, and the lettuce in my salad was picked in that plant the night before. Now, as many of your listeners will know, controlled environment agriculture is not economically viable on a unit-cost basis in most cases. So, each of the heads of lettuce grown in this facility are far more expensive than heads of lettuce grown at scale, say, in Spain, miles away. But when Emirates did the math, they said, “Look, you grow the leafy greens in Spain. You harvest them in advance. You put them on a ship. You take them to a warehouse. You hope they’re in great shape by the time you need to make the salad, and then you hope you’ve got a good product for the consumer. Compare that to this model — we grow only what we need, where and when we need it. Waste has gone not quite to zero, but pretty close. We use 98% less water.” And here’s the exciting part — this has been so successful for Emirates, in February, they announced they were buying all of Bustanica. So, Emirates airlines now owns Bustanica, and they’re scaling up this capability of producing exactly what they need, where and when they need it. 

Pierre Le Manh  
For many businesses, in fact, going from ideas to action can be the most difficult thing to do, right? And we know this in project management because this is what we do. So, how do you think companies can effectively manage resistance to change?  

Rob Wolcott 
First of all, we have to be much clearer about why we’re doing what we’re doing, what is the underlying purpose. A lot of times, people think they know why the company’s trying to make the change they’re making, but they don’t really. Or perhaps sometimes leaders think they have the right solution. They run at the solution too quickly before really deeply understanding the needs of the customer or the underlying objectives. And I’ll give you an example.  

So, a colleague of mine used to be in the medical devices industry. He was at a company with a little oligopoly of four companies. They all made approximately the same sort of medical device. The company he worked for, everyone agreed, had the very best technology, full stop. But they had the worst customer service. The people loved the product and hated the service. So, a new CEO came in and correctly said, “You know, this is unacceptable. We want to be number one in customer service. So, here’s what we’re going to do. Anytime we get a call for service, I want my service technicians on site within 24 hours. And if they are, they get a bonus, and if they’re not, they get dinged." So all of a sudden, all these service technicians are showing up within 24 hours. 

Now here’s the interesting wrinkle. A year and a half later, they’re looking at the cust[omer] sat[isfaction] survey results, and the company’s moved up, but they’re still a distant number two to the number one highest satisfaction in their industry. And the CEO said, “How is this possible?” And then they did some research. Now, by the way, they probably should have done this research before coming up with a solution, right? And when they did the research, they realized, “Wait a minute, our equipment is used in places like hospitals and clinics. There are a lot of other things going on.” And so the consumer, the hospital administrator, the doctor, nurse, etc., they didn’t necessarily want a service technician showing up immediately. Maybe they would have been happier to schedule something a week later at a specified time. That’s the value proposition — not speed of response but come when I want you there. And by the way, as we already said, they could have easily done that research first and had a much better solution. So, Pierre, we have a tendency to converge on solutions too quickly before we even understand what it is we’re trying to solve. 

Pierre Le Manh  
Do you feel that companies that operate in this proximity world are typically better at enterprise agility? 

Rob Wolcott 
What we’re asserting with proximity is not just that, “Hey, you should respond faster to customers.” That’s great, but we’ve always wanted to do that. Smart companies have always wanted to do that. What we’re actually saying is, “This is definitely where the world is going. It’s already going there. And so now that you can see the future, you can decide whether you’re going to get ahead of it or not.” And now that said, companies that we’ve found that seem to be leading this proximity revolution, whether they’re private — I do a lot of investing in venture [capital], so a guideline for me for the past six or seven years has been, “I want to invest in startups that are driving proximity but also in public markets.” We could talk about examples of publicly-traded companies who are, over and over again, driving toward proximity, and in most cases, they didn’t call it that, but that’s exactly what they were doing. 

Pierre Le Manh  
Yeah, do they usually call it more customer centricity, or do you feel they’re more still reliant on new technologies that enable them to transform the way they service their customers? 

Rob Wolcott  
I’ll give you an example, Axon, A-X-O-N, publicly traded. They’re in the public safety and security space. They pioneered the Taser many years ago, then later on pioneered the bodycam for security and police professionals. Earlier this year, they announced that an officer can now take the data from the bodycam, push a button and automatically fill in the police report. And then to top that off, Axon announced they were buying an indoor drone company and an outdoor drone company. And if you look at each of these technologies—data, generative AI, drones, etc.—they all carry the production and provision of value ever closer to the moment where it might be demanded.  

MUSICAL TRANSITION 

Pierre Le Manh 
Rob’s stories of proximity really give us a glimpse of where the future is moving. But who might benefit most from the changes that are coming? Are these changes a net positive or a net negative? We’ll talk about that after the break, so stay with us. 

I am Pierre Le Manh, and this is The Shift Code. Now, before the break, we heard innovation expert Rob Wolcott explain to us how proximity is changing the marketplace. Now, we talk about which industries are the most likely to benefit, how just-in-time is being redefined, and also the most important driver of a successful transformation. Plus, we will talk how to match your innovation strategy with your goal, and more. So, let’s get back to it.

MUSICAL TRANSITION 

Pierre Le Manh  
One of the big hopes for businesses, and a motivation for many of those in the project world, in particular, is that their efforts help to make our world a better place, right? So, at PMI, we even have this as part of our purpose. We want to maximize project success to elevate our world. So, with these ideas of proximity, is that, in the end, a good or a bad thing enriching that goal?  

Rob Wolcott 
I really do see a much better world coming, but that’s not the same thing as saying that it’s all going to be great. There are enormous ethical challenges and issues we have to consider, but I’ll give you one very tangible example about how proximity can drive a far better world. So, the end of last year, I was in Bhutan, the kingdom in the Himalayas nestled between India and China, and we were hiking to a temple. And this was a three mile or so walk through a beautiful bucolic area up into the mountains, and the only sign of modern civilization were overhead wires, power lines. And I asked my Bhutanese friend, I said, “What’s that for?” And he said, "Those lines serve the 30 people who live around the temple.” And I said, “Well, thinking about proximity, distributed energy resources, rooftop solar, small-scale wind, etc., why wouldn’t they put a small-scale solar array or something right next to the temple?” And he said, “Oh, they’re already doing it, except it’s small-scale hydropower.” The power lines are still there. They’re backup, but they also allow the temple complex to sell the electricity back to the grid. And Bhutan is installing these small-scale facilities all over the country, driving power generation ever closer to the moment of demand. And what does that do, Pierre? That increases resiliency. Even if the grid’s down, even if there’s a severe climate event, people have far more effective access to electricity, anywhere, anything, anytime. So, proximity actually is the answer for resilience and also for sustainability if we do it right. 

Pierre Le Manh  
Yeah, actually, you see similar examples with distributed energy, even in the U.S. We’re seeing communities developing their own systems and then contributing to the grid. That’s a great example. Do you have any examples on the other side where proximity could actually make things worse? 

Rob Wolcott 
Well, I mean, I don’t want to cast any aspersions, but how much better are our lives because of social media and I mean binge-watching videos? 

Pierre Le Manh 
Are you a dad? That’s a dad speaking. 

Rob Wolcott  
I am a dad, yeah, and I’m certainly talking about my 13- and 15-year-old daughters, Jolie and Sage, but I’m honestly also talking about myself. It’s something we have to take personal responsibility for. So having anything you want, anywhere, anytime is definitely where our economy is going, then the question is, “What should we do and why?” And it’s a fundamental ethical question for each of us to confront. 

Pierre Le Manh  
And what do you think are the solutions to that or things we could do? Education? Is it more regulation? 

Rob Wolcott 
In general, I like to try and come up with approaches that don’t rely, or don’t rely much, on regulation. To be fair to regulators, it’s hard to regulate stuff that doesn’t exist yet or that’s brand new. So by definition, in a way, we’ll always be a little behind. Second, it doesn’t allow for the ferment and the experimentation that will help us find better ways. But on the individual level, I think one thing we can all do is pay more attention to our attention. Our most limited resource is never capital. It’s our own personal attention. And as leaders of organizations, the most limited resource we have is the attention of our best people. One thing we can each do as individuals, as parents, as leaders, is think about, “Where are we focusing our attention and why?” What kind of change are you seeking to wrought in the world? What kind of life do you hope to live for your children, and how does that relate to where you focus your attention on a day-to-day basis? 

Pierre Le Manh 
There’s another topic that you’re talking about in your book that I found very interesting, and that’s the whole idea of ecosystems. How should businesses think about ecosystems to be more effective in this new landscape? 

Rob Wolcott 
A lot of the things that are arising now, even if you’re a large, established company, you’re not going to be able to do it all by yourself. It’s just a nonstarter. Any company can leverage large language models, but you’re very unlikely to be able to go out and buy enough NVIDIA GPUs to build your own large language model. So you’re going to be relying on other platforms. A fun example that we share in the book, Haier, the Chinese appliance company, had digitally-enabled ovens. And COVID hit, everybody’s at their homes, and they said, “You know what? Chinese love Peking duck.” It’s a specialty dish. Typically, you have to go to a restaurant and have a professional chef create it. And they said, “What if we could provide Peking duck to our consumers at home during COVID?” They reached out to celebrity chefs, and they said, “We would like to license your particular recipe for Peking duck.” They went to a livestock company and partnered with them to generate the ducks, then to process them in a way that they’re prepared for the ovens. They built the software, sent the software out to enable the Haier ovens. And they could only have done this because they were able to marshal various suppliers, partners and resources — very nontraditional partners and resources — to bring this value to their consumers. 

Pierre Le Manh  
If you’re a smaller company, how should you think about partnerships within an ecosystem where you can benefit?  

Rob Wolcott  
Let’s think about supply chain opportunities. One of the execs that’s helped me think through proximity over time is Tom Bianculli, who’s the CTO at Zebra. Zebra is plant automation and technologies like this. Zebra made an investment in a company called FourKites, and Coca-Cola is an example of one of the clients. “We want to know where our products are in our channels at any moment and how much product is moving through. We want to know where the aluminum cans are coming from.” So, the aluminum can supplier started providing data into this system, and the aluminum can supplier said, “Hey, we like having this visibility. We need access to aluminum, and the aluminum providers need access to bauxite.” So, over time, you ended up with this database that’s protecting the rights of each of the participants, but that’s providing a level of supply chain transparency that was really unprecedented. And when you have that level of transparency, you’re able to predict a lot better, you’re able to bring value closer and closer to the moment of demand. You’re able to drive out waste, and by the way, part of the way you drive out waste, Pierre, is the easiest demand to predict, is one that already exists. So, the more you can set up your business models and platforms to procrastinate, to wait until there’s an actual customer for a specific need and then produce and provide, the easier your prediction challenge becomes. So, that’s an example of layering technology across a traditional ecosystem and then enabling new capabilities that you really couldn’t do before having that level of transparency. 

Pierre Le Manh 
Yeah, absolutely. You remind me of the great days of just-in-time and how this has completely revolutionized the automotive industry, but of course, now we can do this at scale, right?  

Rob Wolcott 
I’d like to underscore your point, Pierre. We use the term just-in-time in the subtitle, and honestly, that might be a little misleading for a lot of people because they look at it and they think, ‘Oh, yeah, we did that in ‘80s and ‘90s. That’s old news.’ It’s actually not what we’re saying. If you think about it, the fact that we didn’t do more with that in the ‘80s and ‘90s was not because we didn’t want to. It’s because we couldn’t. 

Pierre Le Manh  
Limitations, for sure. 

Rob Wolcott  
And today, you can. You can do things you could never have done before, and you can produce and provide exact, customized products for an audience of one in ways we could never have before. 

Pierre Le Manh 
Just-in-time, even in the ‘90s, was already progress in terms of customizing compared to what they had before, right? So, how do you see proximity evolving over the next five to 10 years?  

Rob Wolcott  
Think about how hard it is to buy one matching metal fork. Someone in Western Australia mines iron ore. They send it to Southeast China. They melt it down, alloy it, and send it to another plant. They make 12 matching metal forks. They put them into a box, into a pallet, slide it onto a ship across the Pacific Ocean. Eventually, it’s in a store, and I buy 12 matching forks. Today, it is already trivial to download a design file, push a button and print one matching metal fork to order. In fact, if you say, Pierre, “I want a picture of my kids on my fork,” that’s trivial. You upload the picture, throw it on the fork, and you get an absolutely customized product for an audience of one, and over time, that will become economically viable.  

Pierre Le Manh  
In which industries do you think this level of customization will bring the most value to people? Is it in healthcare? Is it in consumer goods?  

Rob Wolcott  
We’re all going to have 3D printers at home sometime. I don’t know if it’s five years or 20 years, but I think for my money and also for humanity, I think healthcare. 

Pierre Le Manh  
Because here you can see the need, right? Having a very customized treatment, very customized devices that can really, really change the game. 

Rob Wolcott  
Actually, this relates to a personal story. My father, Bob Wolcott, passed away relatively early — he was 63 — of an aortal aneurysm back in 2004, and he had just had a complete physical two months before. The doctor said, “Bob, you’re in fantastic health. Keep it up.” Two months later, he was dead.  

Our old model is, “Go for your annual checkup.” They poke and prod you a little bit, and maybe they discover something, maybe they don’t. Fast forward to today, so many of us have Oura rings or Fitbits or whatever. It’s still pretty rudimentary, but it’s going to continue to get better. So, imagine in the not distant future where you have always-on, real-time health monitoring of every aspect of your lived system. It disappears into your daily life. And there’s an AI system analyzing every bit of data, and it says to you, “Hey, Rob, you know what? Maybe you need to talk to your doctor.” Proximity compels healthcare from curing things to preventing things. This will disappear into your daily life and compel healthcare toward prevention because it will be far more effective and far cheaper. 

Pierre Le Manh  
Now, that’s exciting, Rob. If we now talk a little bit about people who manage transformations, so transformation managers, project managers, CEOs, right, are there a few things that you think they should be very careful about? Big misconceptions, mistakes about digital transformation? About this concept of proximity?  

Rob Wolcott  
One that I’ve seen over and over again that any leader should consider if they are in charge of making big change happen — so, let’s say your CEO says to you, “Hey, you’re in charge of this really important transformation project or this really important new business we’re going to build.” The first thing you should do, I think, is go offsite. Don’t do this in the office. Don’t do this in an electronic document. Take your small team offsite, get a big piece of paper, and put it on a table. Write down all the senior executives and all the mid-level executives you think could be relevant to your big change project. Then write down, for each one, what you think they think about what you’re doing. Now understand, Pierre, I didn’t say, “Write down what they think.” You don’t know that. You know what you think they think. 

Pierre Le Manh  
Absolutely. 

Rob Wolcott  
Then allocate to yourself and your core team the responsibility to reach out and say, “Hey, you know what? Julie smiles and nods at staff meetings when we talk about this, but we don’t really know what Julie thinks. Pierre, you and Julie used to work together. Go find time to have lunch, talk to her, find out what she’s thinking. You know, Bob, boy, he tried this five years ago, and it failed. We know he doesn’t want this to succeed, but wait a minute, maybe Bob would love for this to succeed because it vindicates him because he said, ‘See, I told you I was right.’”  

Pierre, this is not a nice-to-have. This is a must-have. This is the work. And what you often see with change processes, with new businesses, new technologies, people will do a project management chart. They’ll do the technology development roadmap. They’ll have a Gantt chart with stage gates, all wonderful stuff, but where’s the human engagement plan? Where’s the human intelligence, situational awareness? It’s the organizational politics that rise up and kill things unexpectedly. And so, you have to take a proactive approach, not just to developing the technology, the product, the change, whatever it is, but to really bringing the organization along. So, I would say that’s the number one thing that not enough teams do early on to make real change happen. 

Pierre Le Manh 
Absolutely. It’s managing your stakeholders but also making sure that their perception of the value that is being created is high. 

Rob Wolcott  
Yeah, and that’s one of the things I appreciate about your programs at PMI because they’re not just about the tech or about the budgeting. It’s you recognize that this is really about people. 

Pierre Le Manh 
If I go back to leaders, transformation leaders and CEOs, let’s say you want to bring your company closer to this concept of proximity, right? Make it think like a company that is absolutely fluent when it comes to adjusting to this concept of proximity. What are the first things that you should do to get started? 

Rob Wolcott 
To give yourself a frame for where the future is going to go, not “Well I wonder if,” but this is actually predictive. Ask yourself, “What is the pickup product or service your company offers?” Ask yourself, “What’s the value we believe our customers are getting from that product or service?” 

Now, imagine it’s 25 years from now — and I just picked 25 randomly as it’s far outside of our normal every day. It releases us from the reality of everyday business. Say it’s 25 years from now. This value is now produced and provided at the moment, in the location where it’s demanded. How does the world look? So, this is an ideation exercise, and you should not let reality get in the way for this ideation exercise. It gives you an opportunity to break out of existing paradigms and say, “How would the world look if somebody who wants a steak dinner actually had a replicator like in Star Trek?” And we’re not going to be there in the next 10 years, but we’re actually going in that direction in a lot of ways. 

We can already do that with pharmaceutical drugs, for instance. There’s a company we talk about in the book called On Demand Pharmaceuticals. They have a piece of equipment the size of a big refrigerator. You type in, “I need 1,000 doses of atropine,” and hours later, out come 1,000 doses of atropine. “Three hundred doses of ciprofloxacin,” out comes 300 doses of ciprofloxacin. The same as you would get at the pharmacy. So, this stuff is already possible. It’s out there. It’s on the peripheries. And so by doing this ideation exercise, how might the value we create be produced and provided proximate to demand in the future? Then you can work backwards and get a sense for how your industry will change and what role you intend to play. 

Pierre Le Manh 
Do you think it’s realistic for a traditional business to do that unless they’re going through a massive crisis? Or is it better to have a separate team develop this on the side? 

Rob Wolcott  
We have to have homes for both. We have to be able to do both. And by the way, Pierre, if somebody is running a billion-dollar P&L (profit and loss statement), and you can’t set aside a million dollars and a couple of great people to be exploring the future, you need to get a new job. I mean really, come on.  

Pierre Le Manh 
Absolutely. I actually call this the 70/20/10. You have to spend 10% of your research and development. 

Rob Wolcott  
Yeah, on the further out. 

Pierre Le Manh  
Exactly, on the further out. You don’t even know if they would work. 

Rob Wolcott  
Yeah, and they have to be handled very differently than incremental improvements to the core business, even to radical efficiency gains. One of the things we point out that people still seem to miss is, how you drive innovation depends entirely on what it is you’re trying to accomplish. The number one fail factor was innovation initiatives that tried to do lots of different kinds of innovating, and they did nothing particularly well, compared to those initiatives where they knew, “You know what, our team is focused on driving radical efficiency gains for the existing businesses, and that’s what we do, and we’re going to be great at it.” Whereas another team says, “You know what? Our job here is to envision brand new businesses for the company, and we’re going to be great at that. We’re not going to do that other stuff.” And the ones that failed tended to say, “You know what? We’re going to come up with radical efficiency gains for the business. We’re going to come up with brand new businesses for the company. We’re going to come up with new products and services. We’re going to change the culture of the whole company, all six of us.” And they did nothing particularly well.  

When you look at these three or four different objectives, they’re all innovation, but they’re all completely different. Coming up with a groundbreaking, disruptive new business for the company is completely different than integrating even a cutting-edge, new technology to change an internal process. Those are completely different challenges. 

Pierre Le Manh 
Absolutely, and your view is that it’s probably better to have different teams working on those different topics? 

Rob Wolcott  
Yes. And absolutely, they should coordinate. They should support each other, but recognize these are different objectives, and then you can optimize with that in mind. 

Pierre Le Manh  
Thank you, Rob. Thank you for being with us. 

Rob Wolcott  
Well, again, I appreciate this opportunity very much, Pierre, and I’ve had great respect for many years for Project Management Institute. I think you guys do a really important job. The more efficient and effective we can become at making the future happen, the better all of our lives will be.  

MUSICAL TRANSITION 

Pierre Le Manh 
Listening to Rob, it’s clear that in order to get things done in our evolving business world, we need to do more than just follow a plan. We need to be prepared for change and embrace it, to rethink our old habits and be flexible about how we reach goals. If hydropower can transform temples in Bhutan, and pharma equipment can crank out custom medicines, what else is possible? It all makes me even more optimistic about our future, and the role that project work and the project economy can play in bringing it to life.  

I am Pierre Le Manh. Thanks for listening.