Built Instability Fosters Innovation New Product Development

As funny as the Calvin and Hobbes comic is, it conveys an important message about how creativity and chaos almost always go together. In 1981, when Honda was developing Honda City – the innovative first-of-its-kind compact car – an executive in charge of its development remarked, “It’s like putting the team members on the second floor, removing the ladder, and telling them to jump or else. I believe creativity is born by pushing people against the wall and pressuring them almost to the extreme.”

Haven’t most of us experienced this at some point in our lives?

The idea of “built-in instability” was first published in a 1986 Harvard Business Review paper, which kicked off the Agile movement. The paper names built-in instability as a top quality of new product development at leading companies such as Honda, Fuji and Canon.

Well, what does built-in instability mean? Why is it important? How does it help teams succeed? Let’s address these questions one by one.

What built-in instability means

When a company’s top leadership does the following:

• establishes a broad but extremely challenging goal,
• does not provide a product definition or a work breakdown structure, AND
• offers the project team ample room for experimentation and failure

… this is called built-in instability.

The leaders have basically created an environment of constructive chaos to serve as a catalyst for creative output.

Why built-in instability matters

Honda’s leaders instructed the Honda City project team to develop “the kind of car that the youth segment would like to drive.”

• Do we see a goal here? Yes.
• But is the goal well-defined? No.
• Do we see what kind of product is expected? Uh, maybe.
• But do we see the steps to get there? No.

With a goal like that, the only way leaders can expect the team to succeed is by letting them fail – to fail early, fail often, and fail forward. When a team has the freedom to fail and knows there isn’t a firing squad waiting down the road, it begins to break traditional boundaries. And companies that thrive beyond decades or centuries with avant-garde products do not get there with traditional thinking. This is why built-in instability matters.

How built-in instability fosters success

Look at the Honda City team’s goal again: to develop “the kind of car that the youth segment would like to drive.”

A broad goal like this naturally demands cross-disciplinary work across a broad spectrum of organizational functions – market research, finance, planning design, production, testing, sales and service. When the team wants to succeed while having the luxury to fail, the built-in instability fosters collaboration among individuals from various functions.

In the words of a member of the Honda City team: “You then start thinking in terms of what’s best or second best for the group at large and not only about where you stand. If everyone understands the other person’s position, then each of us is more willing to give in, or at least to try to talk to each other. Initiatives emerge as a result.”

In sum, what we today use as Agile/Scrum or other modern methodologies essentially relies on built-in instability. By giving teams the freedom to fail, the process encourages a DNA of experimentation, learning, innovation and continuous growth.

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