Lutz: I think it was Tom Peters who said the greatest breakthrough products are the ones that the inventors invented out of the sheer joy of creating for themselves. I believe that whatever type of product or service you're offering, you have to start with that joy. If you're in the restaurant business and you're not passionate about creating great food and ambience, you'll never do better than OK--you won't be a winner.
Sometimes I talk to people who have the urge to become entrepreneurs, and they're casting around for the right idea. That isn't going to work. You have to start with this great idea, along with a burning desire to make it happen. You have to have a sense of mission. The most successful business leaders are those who retain their exuberance and enthusiasm for that mission, even if that enthusiasm sometimes borders on immaturity.
Inc.: OK, so passion is a prerequisite to growing a company. Is it enough?
Lutz: You don't want to be the only one who's passionate. If you're smart, you'll surround yourself with people who are caught up in the magic of this idea as much as you are. But if you're really smart, you'll pick one person who's the one who says, "Wait a minute, not so fast." That's probably going to be your chief financial officer. He or she can keep you from letting all that passion and excitement carry you off into trouble.
I've seen a lot of great start-ups in the auto industry stumble because they lacked that one person. Panther Cars in Great Britain was one of those heartbreakers. It came out with the first retro two-seat sports car, and the prototype looked as if it could be a hit. But the next thing you know, Panther is unveiling a prototype for a four-door luxury sedan, and it seemed that at every auto show, it had another car out. The company seemed so enamored of the act of creation that it couldn't organize itself to actually produce any of them.
Inc.: So while passion is critical, you actually advocate a sort of tension between that burning desire and a more disciplined, controlled approach.
Lutz: F. Scott Fitzgerald once wrote that the test of a first-rate intelligence is the ability to hold two opposing ideas in the mind at the same time and still retain the ability to function. Creativity and order are in a sense opposites, but you need them both. If you have nothing but order, it's all going to feel very good to management because everything will seem predictable. But you're going to end up with complete stasis. On the other hand, if you're all creativity, there will be nothing but constant renewal and churning, and the result will be chaos. Stasis and chaos are ditches on either side of the road, and a good leader will try to steer the company down the middle, occasionally veering one way or the other as course corrections are needed.
Inc.: If you had to err one way or the other...
Lutz: It's much more difficult to make an orderly company behave more creatively than it is to take a creative company and make it more orderly.
Inc.: Does the equation for creativity versus discipline change with company size?
Lutz: Founders of start-ups frequently take their company up to a certain level of growth through their own enthusiasm and creativity, without ever installing any systems. Everybody in the company is kind of working for the founder personally, and it's typical that the founder has to leave before the company can get the required discipline.
Every large company I've worked for, on the other hand, has tended to be run by too many M.B.A.'s who believed that the truth could be found in numbers. One of the functions I hate in automobile companies is called product planning, which is a ton of left-brain guys sifting through reams and reams of market data and then coming up with an elaborate numerical model of the market that to them takes on the semblance of reality. The products they come up with are bland, run absolutely counter to common sense, and almost always turn out to be disasters. Numbers are a poor surrogate for imagination, intuition, judgment, critical thinking, creativity, and leaps of faith.
A minicase in point is the minivan fourth door. Ford considered a second sliding door on minivans about the same time that Chrysler did. Ford claims that it did a lot of market research and that the research showed that most people just didn't want that second sliding door. We didn't even bother to do market research. We just said, "Hey, all passenger cars, all station wagons, all sport utilities have four doors. Why should minivans be any different?" We just went ahead and did it, and it's now standard. When it became obvious that minivan buyers really wanted that fourth door, Ford had to scramble to catch up, and it took three and a half years.
Inc.: You have strong ideas about what makes a good leader.
Lutz: You sometimes see CEOs who have big egos, which comes from insecurity. They have to be the center of attention, they intimidate people and take the upper hand right away in a discussion, and they lead by creating the kind of fear where their employees live in trepidation of their reaction.
That's a terrible kind of fear. It will ruin an organization because people become afraid of taking chances. They start underpinning all their decisions with consensus building, so they won't be tagged with the mistake if anything goes wrong. They can say, "It wasn't me--we all agreed on this," or, "Blame it on market research."
