What’s happened in the past, or previous notions of what Detroit is, are just totally different. You don’t see tires burning in the streets here. You see a city that was once one of the great cities in our country that had suffered for many years, and it’s finally getting back its energy. That’s happening from a lot of different perspectives. You got government that was once corrupt is finally being led by thoughtful and mature and business-minded leaders. You’ve got a federal government that is being supportive financially. You got a huge amount of private industry that is investing billions of dollars in the city.
And you have the philanthropic community that is investing as well. In the same way as we had the perfect storm that really brought us down, you might say now we’re in the midst of a perfect sunny day where the factors are aligned and our city is really racing back. We have a good way to go, but the upward trajectory is thrilling.
What industries and sectors will lead this revival?
JL: I think the good news is it’s finally a mix. Hindsight is always 20-20. But when you look back at what hurt our city, one of the biggest things is we’ve never had any economic diversity. We’ve always been a one-industry town that rose and fell based on the auto markets. Coming back, it’s going to be a little different. First of all, I think the automotive sector is really doing well, which is great. So our city’s core industry is going to play an important role, certainly. But it’s not the only thing anymore.
I’ll give you an example. In our case, we run a venture capital firm called Detroit Venture Partners. And we are investing in tech start-ups. When we came to Detroit in 2010, we were the second venture fund, only second by a couple months to General Motors, which has a small venture effort. Today there’s nearly 20 venture funds in this city. Furthermore, we took over a building that had been vacant for a couple decades. Brought it back to life and made it kind of ground zero of entrepreneurship in Detroit. It’s called the Madison building. This has created so much momentum, both for the companies we’ve funded and those that want to be close by. It’s spilled over, and this square block right now is referred to as the Madison block, and there are 70 tech start-ups within this one square block and growing by the day.
Entrepreneurs, tech entrepreneurs are playing a role. And there’s some very cool industries that are happening. Quicken Loans is financial services; they have 10,000 people down here that didn’t used to be. There are advances in advanced manufacturing, alternative energy, even medical devices. I think the good news about Detroit’s comeback is it isn’t only reliant on one industry. It’s more of a patchwork that’s going to bring us back and keep us there.
Do you think regulations on new technologies such as drones should be lightened to stimulate innovation in Detroit?
JL: We need to make this an entrepreneurial-friendly environment, a business-friendly environment. And let more people take really interesting risks and try new things — whether that’s drones or orbit farming or a number of other things that have been tossed out. I will say, though, that I don’t think we need a totally off-the-wall silver bullet. It’s not like, “Oh gee, Detroit’s about to crumble. Let’s just try one last thing.” We don’t need a Hail Mary pass. I don’t think our entire future is reliant on any one far-out idea. Like any great city like Silicon Valley, there’s experimentation into strange things, and there’s lots of stuff that’s happening underneath to support it.
Who do you think are the most innovative companies out there right now?
JL: Whirlpool, one I talk about in the book. There’s a big company, and they could have certainly rested on their laurels, but they forged ahead into new areas. They launched something, for example, called Gladiator GarageWorks, the first and now the leader in garage organization systems.
Without that as their core business of making white appliances, they saw a better need to serve their customers, which are homeowners. That division is now a $700 million division. To me, it’s about organizations that embrace the reinvention ethos. They view reinvention as an important and ongoing part of their leadership responsibilities. The best of the best reinvent early and often. They view reinvention as sort of a constant process rather than a once-a-decade type endeavor.
Are there industries you see as most vulnerable to disruption right now?
JL: Nearly every industry is in the midst of massive upheaval. I think there’s so many. One for me is the publishing world; there’s a lot of change happening there. You go right down the board and almost every industry is being shaken up. The world is changing at a rate like no other in history. Success is often erroneously viewed as a permanent condition. Like you’ve arrived. We’re successful now. That’s really not what happens.
Success is a temporary theme in the context of many external factors. If you had a great movie studio, that’s great. You just launched a great hit, but all the external factors that made that hit successful in addition to the great work in that studio. The point is if you keep running the same game plan, it’s a sure-fire path to crashing and burning, and so what I think industries and companies need to do frequently is, okay, that worked yesterday, but what’s the best strategy for now? How do we engineer the next chapter of our journey rather than just cling to the previous one. It’s funny how so many organizations, especially larger ones, get caught up and they think their job is to protect rather than invent. That creates the opportunity for entrepreneurs or competitors to come on and eat their lunch.
Is the mind-set and personality of disrupting an innate trait?
JL: The research shows that creativity, which is really the fundamental DNA of this whole process, is fundamentally a largely a learned behavior. It turns out that creativity is 85 percent learned, which is amazing because it turns out as much as 98 percent of adults, you ask them, “Are you a creative person?” They say, “No.” It’s largely because they’ve been socialized out of it.
Maybe a teacher in elementary school said you’re not good at art, you’re not a creative person. Or they’ve been so worried about following rules and not making mistakes that they consider themselves uncreative. Or they credit their job to a level of creativity. “Well, I’m a financial planner, so I can’t be creative.” All that is totally false. We as human beings have enormous amounts of creative capacities to build those skills up a little bit. Furthermore, organizational structures tend to kill it. If you have a company that is fear-based and that ideas are shot down, and people are yelled at or made to feel foolish, you’re never going to get any creativity.
The good news is people have the raw DNA; it’s not only one out of 1,000 are born creative. It’s leaders’ responsibility to nurture and build and expand on that creativity. That will be again the building blocks of successful reinventions.
There’s been a stir regarding Jill Lepore’s New Yorker article on Clay Christensen and his theory of disruption. What’s your reaction to the article?
JL: I think the article was really poorly written. I think it was one of those things like, let’s attack a theory to get a bunch of media attention. I think her counterarguments didn’t really hold weight. If you zoom out, every great company originally came from some disruptive act, the status quo or an industry, a service. Henry Ford is the classic example here in our backyard of someone who is a disruptor.
When there are massive shifts they often come from small companies who are not bound by tradition. For example, Red Bull wasn’t a Coca-Cola product; it was entrepreneurs that changed the industry. Or Zip-Car didn’t come from Hertz, it came from an entrepreneur. So I really support Clay Christensen’s thinking, and his research has been very sound. This article I thought was more of an attention grab than a logical argument.
Furthermore, because we’re talking about it, I’m kind of [annoyed] because she quoted me in the article and clearly hadn’t read my book and reached erroneous conclusions and really twisted my words. Ordinarily I don’t mind criticism; that’s natural. But she’d quote me and then interpret that quote in a way that had no basis of interpretation. It’d be like if I just said, “Hey because you said X, Y and Z, clearly that means that you think that all babies should be murdered.” And the answer is no, that isn’t any way, shape or form what you were saying. So I was frustrated that she twisted my words and reached conclusions that were in no way, shape or form my thinking. Had she read my book she would have got it.
If readers should take one lesson from your book, what would that be?
JL: I think the importance of reinvention on a regular basis, whether it’s in our careers, our communities or in the broader sense or even our companies. So I think to the extent things are changing so rapidly it’s a comment on all of us to be using a blank canvas. It’s never really too late. Certainly it’s relative to come back from adversity. Look at Detroit. One hundred years ago we were the Silicon Valley of our country.
This is where people would come, and we reinvented ourselves from a fur-trading industry to lumber and then of course manufacturing. When we stopped reinventing is when we stopped winning. Our city became so focused on a sense of entitlement and being untouchable. But today we’re fighting back. If Detroit can reinvent itself, falling as hard as it did, to me the lesson for all of us is even if we have suffered some adversity in our lives, it’s never too late to reinvent.
There’s some hand-wringing over America’s future. Do you expect the United States to remain the global leader in innovation?
JL: I’m cautiously optimistic. I think we have some real issues. Clearly there’s some real issues. I’ve always said education. Specifically, I write a lot about creativity, the idea that we’re teaching kids to be more rule followers than creative problem solvers. So I’m concerned in that respect, and I think that is what really has led us to our global lead from an economic standpoint and has the biggest threat of undermining us if we go in the wrong direction.
However, I do think — maybe I’m just idealistic — that I have a broad sense of optimism that we as a nation have a strong sense of ingenuity and resourcefulness and determination and willpower. So I think it’s more based on my opinion than deep fact, but I don’t look out and think, “Oh gosh, the sky is falling.” We’re living in a time of incredible opportunity. For example, entrepreneurship is more accessible than it’s ever been in our country’s history.