ZS Podcast · Management Consulting

Generative AI Insights Driving Innovation

·35 min·2 clips

Mike says dynamic capabilities require playing two strategy games at the same time.

Maria Whitman frames the conversation around a central tension in biopharma and other large organizations: how do you evolve without losing control of the business that already exists. Mike Tushman pushes back on the idea that structure alone can carry transformation. He says scientists and engineers often prefer systems, metrics, procedures, and structure, but culture is still essential. That opening gives the episode a practical, grounded tone around organizational change. The episode keeps coming back to ambidexterity. Tushman describes the need to exploit the current business while also exploring new models. He treats those two modes as different enough that they cannot simply be forced into the same operating setup. The point is direct: different structures, different cultures, different processes, and different metrics are often required. The argument is not that one side is right and the other is wrong. It is that each serves a different job, and mixing them too quickly creates friction. A major example comes from Harvard Business School. Tushman describes how the school had long operated in a traditional classroom model. It then experimented with a structurally separate online effort called HBX. The project had a different set of faculty, a different culture, different processes, and different metrics. That separation let it develop without being constrained by the old system. Once it proved itself, it was brought into the larger institution as Harvard Business School Online. The episode uses that example to show how incubation can work in practice. New ideas often need room to breathe before they are asked to perform at full scale. Tushman is careful not to romanticize the process. He says that for every 10 attempts at ideation, incubation, and scale, most fail. He also says the hard part is usually not the first idea or even the early build. The hard part is scale. That point becomes the center of the conversation. In large organizations, the core business has a natural immune system. Once a new project starts consuming money, attention, or authority, the older system pushes back. Tushman suggests that this is why so many promising efforts get absorbed before they can change the organization in a lasting way. Maria keeps pressing on what leaders should do with that reality. The answer is not to avoid new ideas. It is to design for separation first and integration later. The episode also treats the current moment as unusually favorable for experimentation. Tushman says ideation and incubation are cheap in 2024 and that everyone is doing it. That makes the real differentiator not novelty, but the ability to scale. He argues that organizations need to think carefully about where exploration lives, how it is protected, and when it is ready to rejoin the core. The conversation stays focused on execution rather than hype. It is about operating model design, not inspiration. As the discussion moves toward the close, it comes back to healthcare. Tushman says that if he could change one thing, it would be ease of access and getting the right thing at the right time. He adds that he has been fortunate to have had healthcare support for his family. The tone stays measured and appreciative rather than grand. That ending reinforces the episode's broader point: innovation matters most when it improves how real people experience the system. The whole exchange is built around the relationship between innovation and inertia. It asks what must be separated, what must be measured differently, and what must be protected if new work is ever going to matter. It does not promise easy answers. It gives a useful framework for leaders who are trying to move an organization without breaking the engine that keeps it running.

As heard by us

A clear look at culture, structure, and the hard part of scaling innovation.

This episode lays out a straightforward argument: organizations can keep doing today’s work and still make room for new models, but only if structure and culture pull together.

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Why you'd press play

For when you need the hard truth about scaling innovation inside a mature organization.

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