Let’s take a supply chain moonshot

Working together, we can eliminate boundaries, double-down on value creation, and continue to move forward—but only if we commit to an innovation-focused mindset.

The supply chain can break down boundaries, create unimagined value, and innovate everything, but only if a new mindset emerges—a startup mentality focused on generating ideas and enabling the people that can run with them, converting uncertainty into opportunity, standing up to risk, failing, sometimes succeeding, and always starting again. This is possible because the supply chain is not a one-dimensional institution for moving boxes from here to there, chasing cost reduction, and measuring efficiency. No. The supply chain connects people with differing needs and aspirations, globally and locally, across and within communities, enabling wealth creation, human flourishing, and the pursuit of happiness. Or at least it can be. In this edition, I call for a moonshot for making the supply chain all it can be—a catalyst for growth, sustainability, and profits, creating economic and social goods, and leading us through the stress and trauma of digital transformation.

Achieving “10X impact”

I found inspiration listening to Astro Teller on this HBR IdeaCast episode. Teller leads X, a division of Google’s parent company, Alphabet. X is a moonshot factory on a mission to “create radical new technologies to solve some of the world’s hardest problems” I see a common cause for a supply chain bent on stretching to become not just resilient but also responsive and regenerative. If X is reaching for the stars, so can we.

From the start, Teller explains that everything X does is designed to achieve 10X impact, not 10% improvement. That means striving for purpose-driven system change, not settling for continuous, incremental progress. X investigates thousands of possibilities every year, learning from what doesn’t work and launching what does. For example, a current project uses lasers to achieve hyper-fast data transmission at one percent of the cost of trenching fiber optic cables. Another applies automation tools to understand how we can regenerate the oceans to stop killing them as we extract trillions of dollars of wealth, growing at an ever-accelerating pace. Big stuff, and there’s more. Epic change for epic times.

Teller has two job titles, Chief Executive Officer and Captain of Moonshots, but he says he thinks of himself as a culture engineer in an organization populated with a diverse group of inventors and entrepreneurs, running experiments designed to prove why new technologies will fail. Every project starts by solving the most challenging thing that must be done—because if it can’t be done, nothing else is worth doing. Nearly every new technology fails to deliver its potential 10X impact, but failure is where learning happens. Like a home run hitter, X swings for the fence, embracing strikeouts as part of the process.

Knowing that failure is the norm, Teller says he sees a benefit in “failing more than once in the same area.” Every terminated project creates “moonshot compost” that helps the next because “the people stay, the code stays, the patent stays, [and] the learning stays.” X’s operating principles are “really simple stuff” but “ferociously hard” to do:

Everything at X is wired around trying to make you not feel stupid about actually showing up humble and open-minded with a growth mindset. Why are you going to kill your project if you think that your bonus or your ability to get promoted or the next thing that you're going to get to do is going to be harmed by intellectual honesty, which is why there isn't a lot of intellectual honesty floating around [in most organizations focused on innovation]. And so we are … back at basics all the time saying what do we need to do [and sending] the hundreds and hundreds of signals necessary so that everyone at X naturally does the things we're actually asking them to do.

Teller’s insights offer a critical lesson for innovating the supply chain: big things are possible, but not without steadfast commitment, driven by purpose and enabled by culture. X strives to do good things for humankind in a way that unearths colossal business opportunities for Alphabet. Doing so is a conscious choice; for other organizations, Teller says he sees a problem. Every leader asks for innovation, but most are “not actually willing to support the innovation because … innovation is mostly about making a mess.”  Tolerance is not a virtue exhibited only in tough times. Tolerating innovation’s messiness is an essential value, required in every moment of every day.

We live in epic times, and the supply chain may transform to create epic value, but not without intentional action fired by collaboration. Teller advises leaders to decide: “How badly do you want a factor 10 increase in value?” It’s a choice between pursuing a low-risk path, striving for 10 percent gains, or aiming for the stars. 10X impact requires committing to a long-term investment horizon, juggling a portfolio of possibilities, and building a culture that finds success in failure. Aiming for 10X outcomes is a moonshot for our times.

It is in our nature as humans to band together as a community to overcome adversity and strive for a better world. Innovation is in our genes, but not always in our actions. Success results from how teams interact and work together, and Teller offers advice on selecting the right people and then training them to “unleash” their potential:

I think that there's an incredible amount of [talent] latent inside people, but finding people who have unleashed themselves is pretty hard. We think about this a lot, and we actually spend a lot of time and energy even once we’ve hired people helping them to unleash themselves. So really, a lot of our interviewing process is about trying to decide if people are ready to unleash themselves—rather than that they’re sort of done or perfect in every way.

X’s recruiting process evaluates the future potential of candidates, evidenced by four intrinsic characteristics: fearlessness, humility, teamwork, and the ability to learn. Fearlessness indicates a person’s willingness to pursue audacious, bold ideas unconventionally. Humility is critical because many explorations fail; progress is gradual, and dishonesty wastes time and resources. Innovation is a team effort, and diverse teams yield the best results. And explaining why the ability to learn is essential, Teller offers that every team in X’s moonshot factory is a learning machine, so “we need each of the humans here at X to be a learning machine.”

Teller’s approach seems a very human-centric method for unlocking the power of new technologies to achieve 10X impact, but he does not think humans will go it alone. Asked about the power of generative AI, he offers:

Let me answer like this. I think that computers have been levers for our minds for a long time, and robots increasingly are becoming levers for our bodies, doing physical work for us in lots of different situations. And I see a lot of ongoing opportunity just here at X to use artificial intelligence and machine learning as raw materials that go into trying to make the world better. And in the same way, [if it] were a hundred years ago and electricity was relatively new on the scene, everyone would be excited about electricity and rightly so, but electricity isn't the end of the story. Electricity is the beginning of the story. If we can now put more intelligence into things that we're making great, then we can find better and better ways to solve huge problems in the world. That's how it feels at X.

Foresight and footsteps

A startup mindset is essential for every transformative innovation, and every journey begins with footsteps. X may offer more than inspiration, and the proof is in a project mentioned by Teller on his HBR IdeaCast episode. Project Chorus is a moonshot to “improve how we move and use the world’s goods.” Writing on The X Blog, Suresh Vishnubhatla, Chorus’ Project Lead, explains:

Despite trillions of dollars worth of goods moving through the world’s supply chains each year, too many businesses today still lack the tools they need to see where things are in real time. What's more, critical information about these things, like their location or temperature, either simply doesn’t exist or is incomplete or inaccessible to all the people who need to know it. My team wants to change this. Project Chorus is developing new sensor technology, software, and machine learning tools to radically improve our real-time understanding of where physical goods are located, where they are needed, what state they are in, and how they are used.

Please join our journey of nurturing and enabling a startup mindset for transforming the supply chain to achieve 10X impact. I need your help, and I’m looking for knowledge to share and stories to tell. Please leave your comments below or reach out at mark.dancer@n4bi.com.