Technology, Innovation, and Great Power Competition – Class 5 – AI and Machine Learning

This article first appeared in West Point’s Modern War Institute.


We just completed the fifth week of our new national security class at Stanford – Technology, Innovation and Great Power CompetitionJoe FelterRaj Shah and I designed the class to cover how technology will shape all the elements of national power (America’s influence and footprint on the world stage).

In class 1, we learned that national power is the combination of a country’s diplomacy, information/intelligence, its military capabilities, economic strength, finance, intelligence, and law enforcement. This “whole of government approach” is known by the acronym DIME-FIL.

Class 2 focused on China, the U.S.’s primary  great power competitor. China is using all elements of national power: diplomacy (soft power, alliances, coercion), information/ intelligence, its military might and economic strength (Belt and Road Initiative) as well as exploiting Western finance and technology. China’s goal is to challenge and overturn the U.S.-led liberal international order and replace it with a neo-totalitarian model.

The third class focused on Russia, which since 2014 has asserted itself as a competing great power. We learned how Russia pursues security and economic interests in parallel with its ideological aims. At times, these objectives complement each other. At other times they clash, as Russian policy is run by Vladimir Putin and his political institutions.

The fourth class shifted our focus to the impact commercial technologies have on DIME-FIL. The first technology we examined were semiconductors, the oil of the 21st century. The U.S. is dependent on TSMC, located in Taiwan, for its most advanced logic chips. This is problematic as China claims Taiwan is a province of China.

Today’s class: Artificial Intelligence / Machine Learning

Catch up with the class by reading our intro to the class, and summaries of Classes 1, 2, 3 and 4


 

Required Readings

Introduction to AI

The AI Arms Race: Fact or Fiction?

China’s AI Strategy

Russian AI Strategy

US AI Strategy

Obama Administration

Trump Administration

Biden Administration

Other AI and National Security Resources

Reading Assignment Questions:

Pick one of the below questions and answer in approximately 100 words, based on the required readings. Please note that this assignment will be graded and count towards course participation.

  1. How would you characterize the geopolitical AI Arms Race? Is an “arms race” the right lens through which to understand this phenomenon, or is there another way to better understand great power competition in the AI domain?
  2. Can the U.S. learn any lessons from China’s AI strategy?

Class 5 – Guest Speakers

Our speakers for our fifth class were Mike Brown, Nand Mulchandani and Jacqueline Tame.

Mike Brown is the director of the Defense Innovation Unit (DIU) – a Department of Defense organization that contracts with commercial companies to solve national security problems. Previously Mike was the CEO of Symantec and Quantum.

Nand Mulchandani is the Chief Technology Officer of the Joint Artificial Intelligence Center (JAIC). The JAIC is the focal point of the Department of Defense AI strategy.

Jacqueline Tame was the former Acting Deputy Director of the JAIC and the architect of the JAIC “Gamechanger,” an AI-driven Policy Analysis Tool.

Mike Brown led off the session with an overview of the Defense Innovation Unit (DIU).

If you can’t see Mike Brown’s Defense Innovation Unit presentation click here.

Key takeaways from Mike’s talk were that 1) 50 years ago defense-related R&D made up 36% of global R&D. Today, defense-related R&D is 4%. Key technologies needed by defense today are made by commercial companies (5G, AI, biotech, quantum, access to space, batteries, etc.) 2) The top tech companies (Facebook, Alphabet, Microsoft, Amazon, and Apple) outspend U.S. prime contractors 11 to 1 in R&D ($70.5B versus $6.2B.)

DIU’s role is to find and then funnel commercial technology into the DoD by prototyping, transitioning, and scaling solutions. They have (by DoD standards) an extremely fast pipeline from problem curation, to evaluating and selecting companies, then prototyping projects and inserting them into DoD programs. AI/MLis one of the six core areas DIU focuses on (along with space, autonomy, advanced energy and materials, cyber and human systems.) DIU AI/ML has three lines of effort: machine Learning predictions, big data analysis, enhanced decision making.

Nand Mulchandani described the role and the initiatives of the JAIC. One in particular, Gamechanger, was conceived and run by Jacqueline Tame.

Gamechanger uses AI to tackle a problem only a government could create. The DoD and federal regulations have 10’s of thousands of policies, laws, regulations that tell decision-makers what they can or cannot do. These exist in different places on different networks and change almost daily. Now you could simply type a natural language query that asks, “Do I have the authority do x?” Or, “How can purchase this item quickly?” etc.

Lecture 5

If you can’t see the slides, click here

Our first discussion in class (Slide 7) was whether Nicholas Chaillan’s (the first Air Force Chief Software Officer) claim that we have already lost the AI battle to China was correct.

Slides 9-14 kicked off the discussion of the geopolitical implications of AI. Given both China and Russia have made a AI a national effort, how will AI impact all aspects of DIME (Diplomatic, Intelligence, Military, and Economic) and national power? What are the impacts of AI created deep fakes? AI automating image recognition of satellite data? AI creating optimal concepts of operations? AI-tuned cyber-attacks? AI cyber security? AI smart/predicative maintenance? etc.  Where will we first see its impacts? What will our response be?

Class Discussion Questions: (Slide 15)

  • How would you characterize the strengths and weaknesses of the U.S.’s AI Strategy?
  • How would you advise the Biden Administration to pursue an AI Strategy?

Next week: Autonomy and Unmanned Systems

Lessons Learned

  • AI and machine learning is a critical technology that will impact all aspects of DIME (Diplomatic, Intelligence, Military, and Economic) and national power
  • Most of the advanced work in AI/ML is happening in commercial companies and universities not the DoD
    • China and Russia have made AI and machine learning national priorities
  • The Defense Innovation Unit (DIU) exists to find and then funnel commercial technology like AI/ML into the DoD
  • The Joint Artificial Intelligence Center (JAIC) is the focal point of the Department of Defense AI strategy


How to Find a Market? Use Jobs-To-Be-Done as the Front End of Customer Discovery

Modern entrepreneurship began at the turn of the 21st century with the observation that startups aren’t smaller versions of large companies – large companies at their core execute known business models, while startups search for scalable business models. Lean Methodology consists of three tools designed for entrepreneurs building new ventures:

These tools tell you how to rapidly find product/market fit inside a market, and how to pivot when your hypotheses are incorrect. However, they don’t help you figure out where to start the search for your new business.

Anthony Ulwick and Ted Thayer of Strategyn have a set of unique and valuable insights:

  • Rather than defining markets as existing, adjacent or new markets – or by verticals, technology, demographics, et al. all markets can be described by what job the user wants to get done
  • Their Jobs-to-be-Done Market Definition Canvas make the Lean Startup methodology even better by finding and defining a market up front. Here’s their description of why and how.

Problem – Lean Doesn’t Have a Market Definition Step
The Lean Startup methodology asks innovators to interview potential customers within their “market” to discover the customer’s unmet needs and establish a product/market fit. Given the number of interviews to get meaningful data, this can take months.

As innovators deepen their understanding of the customer, they may pivot their product concept, target a different vertical, demographic, or customer activity, or incorporate a different technology into their solution.

Some innovators define markets around a product, e.g. the vacuum cleaner market or the espresso maker market. Others define markets around verticals, e.g. the financial services market or the healthcare market. Or defined around demographics (the people over 45 market), technologies (the brain sensor market), customer activities (the fitness market), and product portfolios (the heavy equipment market).

Here’s the consequence: Depending on how founders originally define their market, making one or more of these changes can inadvertently alter the original market definition, which in turn changes the “market” they are targeting and invalidates the customer needs they have captured.

This creates a recursive process in which the team is simultaneously iterating on the market definition, customer needs, and the value proposition, with no logical way to exit. This circular loop can cause them to churn, pivot, and fail.

Startups would have a greater chance of success if founders could avoid iterating the market they are targeting while at the same time trying to establish product/market fit.

In most cases, innovators don’t create markets; they create products to serve markets. Thus, the market must be defined and validated in the innovation equation before moving to needs discovery and product definition.

What’s Missing?
What missing is a process for defining a market that reduces uncertainty, reduces iteration in the effort to establish a product/market fit, and aligns the team around the business objectives and the results.

We’ve spent a good number of years asking ourselves what constitutes the “perfect” market definition. What we have concluded is that a market should be defined in such a way that…

  • The market definition becomes a constant in the product/market fit equation, not a variable. It does not change as the study of that market unfolds.
  • It is stable over time. It does not go away when different solutions or technologies come along, thus making it a valid long-term focal point for value creation.
  • It is unique from any other market, making it distinguishable and unambiguous.
  • It does not assume a product or a solution. Rather, it is defined in problem space.
  • It indicates who the targets are for value creation—making it clear which group of people to focus on.
  • It makes the discovery of customer needs quicker, more effective, and less costly.
  • It reveals all sources of competition, making disruption and other surprises less likely.
  • It is relevant to and aligns the entire organization, e.g., sales, marketing, development, etc.

Given this set of characteristics, how should a market be defined?

How should a market be defined?
It’s worth remembering that people buy products and services to get a “job” done. A job is defined as a task people are trying to accomplish, a goal or objective they are trying to achieve, a problem they are trying to resolve, something they are trying to avoid, or anything else they are trying to accomplish. More about Jobs-to-be-Done Theory here.

When looking at a market through the Jobs-to-be-Done lens, a market is best defined as: a group of people and the job they are trying to get done.

For example, parents (a group of people) who are trying to “pass on life lessons to children” (a job-to-be-done) constitute a market. As do surgeons (a group of people) who are trying to “repair a torn rotator cuff” (a job-to-be-done), or clinicians (a group of people) who are trying to “diagnose the cause of a patient’s sleep disorder” (a job-to-be-done).

When defining markets with a jobs-to-be-done lens, thousands of unique markets exist. They are stable over time, focus on what people are trying to accomplish rather than solutions, offer a focal point for analysis, and form a foundation for deeply understanding customer needs. Learn about needs through this lens here.

Because the market is defined using “Jobs-to-be-Done” before engaging in the first step of the Lean Startup methodology, the defined market will not change as customer discovery and validation of that market unfolds. This cuts back on the number of iterations and pivots.

Big idea – Even New and Disruptive Markets can all be viewed as “Jobs-to-be-Done”
How does “Jobs-to-be-Done” work in new and disruptive markets? For example, people often talk about the cryptocurrency market as a new market, but is it really? It depends how you define “market.”

If you choose to define a market around a new product or a new technology, then, by definition, the “cryptocurrency market” would be considered new. But if you define the same market through a jobs-to-be-done lens, the story is very different, as consumers (a group of people) have for centuries been trying to intermediate the storage and exchange of value over time (the job-to-be-done).

When looking through a jobs-to-be-done lens, cryptocurrency is simply a new offering in a pre-existing market. Similarly, Uber, Netflix, electronic evidence discovery, cloud computing, smartphones, online learning, Airbnb, Spotify, Google Maps and many other products considered disruptions are in fact new offerings in pre-existing markets.

Why does this matter? When conducting needs discovery, potential customers struggle to articulate needs for a product that does not yet exist. But when you ask them about their job-to-be-done, customers can state with precision their needs associated with getting the job done better, making needs discovery faster and more effective.

To help you define your market through this lens, we have created the Jobs-to-be-Done Market Definition Canvas. We want to make this canvas available to everyone who has embraced the Lean Startup methodology and want to take it to the next level.

Instructions for using the canvas are included below, and the canvas can be downloaded here.

THE JOBS-TO-BE-DONE MARKET DEFINITION CANVAS

If you can’t see the canvas click here.

The Jobs-to-be-Done Market Definition Canvas is designed to help you define the market you are in or have chosen to serve as [a group of people] + [the job they are trying to get done].

The Market Definition Canvas works for both B2C and B2B applications. While it is optimized to define single-sided markets, it can be used twice to define both sides of a double-sided market. For component manufacturers who sell to OEMs or who are at the top of a long distribution chain, a canvas can be completed for each constituent in the distribution chain, including the end-user, as each constituent has its own unique job to get done.

See this webinar with Tony Ulwick to learn more about this canvas.

8 steps to define Jobs to Be Done

1. Start with a traditional market definition

What is the product/service/idea you seek to innovate?
The exercise starts with something you’re familiar with—a product focus. We ask, “What is the product, service, or idea you’re looking to innovate around?” We use this as the grounding point, as the subsequent steps will help transition you from a product view to a jobs-to-be-done view of your market.

2. Job executor determination

Who’s using the product to get a job done?
The focus on “jobs to be done” begins with this step. Ask, who’s using your product (or who would use your product once released) to get a job done? The goal is to reveal the diverse set of potential product users. So, list all the categories of people who use or would use the product to extract its value. Keep in mind; we are focused here on the job executors. Do not list out influencers, economic buyers, people who support the product throughout its lifecycle, or other customer types, just job executors.

For example, Bosch used this approach when trying to enter the North American circular saw market (yes, they began with a product-based market definition in mind). They concluded that finish carpenters, framers, roofers, general contractors, electricians, and plumbers use circular saws. Notice they did not use the formal job titles of the job executors; instead, they listed the categories of people who use circular saws.

3. Abstracted job executor

What overarching term can classify all the categories of people using the product to get a job done?
Next, define the one overarching term that can be used to classify or describe all people using, or potentially using, your product these people as a single group. Remember, we are defining a market as a group of people + the job-to-be-done. When defining the group of people, try not to use an actual job title. Instead, look for an all-inclusive term that encapsulates all job executors, usually a higher-level, generic term.

The Bosch team, for example, abstracted roofers, framers, plumbers, finish carpenters, etc., into a higher-level category using the term “tradespeople.” In other words, the “group of people” using circular saws was conveniently referred to as tradespeople.

For consumer product goods, the job executors are often referred to simply as “consumers.”

4. Job executor

The group of people (job executor) is defined as:
You may have come up with more than one way to describe the “group of people.” Choose a label that fits all types of people using the product, service, or idea you have in mind. For example, you may choose the term surgeons over cardiac surgeons, or tradespeople over tradesmen to be more inclusive. Other examples include educators over teachers, accountants over tax preparers, or consumers over adults.

It is important to define the “group of people” before defining the job-to-be-done, as you will be interviewing representatives of the group to determine, from them alone, the way they define the job they are trying to get done.

5. Function of the product

What “job” does the product/service/idea you want to innovate help the job executor accomplish?
Products don’t have jobs-to-be-done; people do. But to uncover the targeted group’s job-to-be-done, it is often helpful to start by understanding what function/job the product you have in mind performs.

Work with your product team, or preferably use customer discovery to go directly to the “group” of people (defined in step 4) and ask: What does/will the product or service we have in mind help you accomplish from a functional perspective? Collect and cull the responses into a single statement according to this formula:

The product will help the group of people [verb] + [object of the verb] + [contextual clarifier (optional)].

For example, a kettle may be used to “heat + water + to the desired temperature,” or a dental drill may be used to “contour + the shape + of a tooth.”

Keep in mind; this isn’t the customer’s job-to-be-done—it’s the function or the job that the product gets done, which is often only part of the job the customer is trying to get done. For example, while people may use a kettle to “heat water to the desired temperature,” the overall job they are trying to get done may be to “prepare a hot beverage for consumption.”

The goal of the market definition canvas is to help innovators uncover the job-to-be-done as perceived by the customer, not the product developer.

6. Other products used and their functions

What other products do people use in conjunction with the product?
What “job” does each of the other products get done?To get a feel for the entire job your customer is trying to get done, ask them what other products they use immediately before, while, and immediately after using your product/service.

For example, when tradespeople use a circular saw to “cut wood,” what other products are they using in conjunction with a circular saw? Perhaps they are also using a T-square, a measuring tape, sandpaper, and (or) a pencil.

List the products they use in conjunction with the one you have in mind.

Next, document the functions / jobs that each of these other products gets done for the group of people. Use the same format used previously: [verb] + [object of the verb] + [contextual clarifier (optional)].

The Bosch team, for example, determined through customer interviews that while the function of the circular saw was to “cut wood” (a job statement), that tradespeople were using a T-square to ensure they “make a cut in a straight line” (a job statement), and that they were using a pencil to “mark the cut path” (a job statement).

7. Abstracted job statement

When looking at the market through the job executor’s eyes, what core functional job do they say they are trying to get done?
Putting all the pieces together helps reveal the customer’s ultimate job-to-be-done at the right level of abstraction. Assume your product is getting part of a job done. Assume people are using these other products to complete the entire job-to-be-done.

You want to define your customer’s job-to-be-done in a way that includes your product’s function (job) and rationalizes why customers are using all these other products as they cobble together a complete solution. The Bosch team, for example, determined that tradespeople are using a circular saw along with other products so they can “cut wood in a straight line” (the abstracted job statement).

A financial services firm determined that accountants use tax preparation software in conjunction with other products so they can “formulate and execute a tax strategy for a client” (the abstracted job statement).

Defining the market at this level of abstraction allows you to evolve your product over time to help customers get more, and eventually all, of their job done—preferably before competitors do. It offers the innovator a built-in path and vision for growth—tied directly to what customers are trying to accomplish.

Remember, complete steps 5-8 employing customer interviews. Make sure you encapsulate the job of the product you have in mind in the abstracted job statement. If the job of the product is not represented, you have abstracted the job statement to too high a level. Preventing you from capturing customer need statements that will help inform the improvement of the product you have in mind.

8. Customer’s Job-to-be-Done

Now that you have your customer’s job, you can document that job in this box. If you have multiple versions of the job statement, work with job executors to gain consensus on the best version.

With this, the Market Definition Canvas is completed, and your market is defined for you through a jobs-to-be-done lens. Your market = Group of people (Step 4) + Job-to-be-Done (Step 8)

Now you can iterate quickly during your lean innovation process—and more reliably succeed in your market.

To learn more about Jobs Theory and Outcome-Driven Innovation, check out the following resources:

Technology, Innovation, and Great Power Competition – Class 4- Semiconductors

This article first appeared in West Point’s Modern War Institute.  


We just completed the fourth week of our new national security class at Stanford – Technology, Innovation and Great Power CompetitionJoe FelterRaj Shah and I designed the class to cover how technology will shape all the elements of national power (America’s influence and footprint on the world stage).

In class 1, we learned that national power is the combination of a country’s diplomacy (soft power and alliances), information/intelligence, military power, economic strength, finance, intelligence, and law enforcement. This “whole of government approach” is known by the acronym DIME-FIL.  And after two decades focused on counter terrorism, the U.S. is now engaged in great power competition with both China and Russia.

In class 2 the class focused on China, the U.S.’s primary great power competitor. China is using all elements of national power: diplomacy (soft power, alliances, coercion), information/ intelligence (using its economic leverage over Hollywood, controlling the Covid narrative), its military might and economic strength (Belt and Road Initiative) as well as exploiting Western finance and technology. China’s goal is to challenge and overturn the U.S.-led liberal international order and replace it with a neo-totalitarian model.

The third class focused on Russia, which is asserting itself as a great power challenger. We learned how Russia pursues security and economic interests in parallel with its ideological aims. At times, these objectives complement each other. At other times they clash, Putin’s desire to restore Russia into a great power once again leads to a foreign policy that is opposite the interests of the Russia people. As Putin himself has said, “The collapse of the Soviet Union was a major geopolitical disaster of the century,” and that quote offers a window to his worldview as he tries to remake Russia into a great power once again.”

Having covered the elements of national power (DIME-FIL) and China and Russia, the class now shifts to the impact commercial technologies have on DIME-FIL. Today’s topic – Semiconductors.

Catch up with the class by reading our intro to the class, and summaries of Classes 1, 2 and 3.


Class 4 Required Readings:

Silicon Valley, the Military, and the Journey to the Fourth Industrial Revolution

Moore’s Law & the Global Semiconductor Industry

Semiconductor Case Study

Reading Assignment Questions:

Pick one of the below questions and answer in approximately 100 words, based on the required readings. Please note that this assignment will be graded and count towards course participation.

  1. Describe the roles of Fred Terman, William Shockley, and Fairchild Semiconductor in the genesis of Silicon Valley. Who had a greater role in creating Silicon Valley, Fred Terman or the Traitorous Eight?
  2. How would you characterize China’s attempt to catch-up in the semiconductor industry? Do you think China can credibly catch TSMC (without an invasion of Taiwan)? Why or why not?

Discussion Questions

  1. Put yourself in the shoes of Mark Liu, chairman of TSMC: Do you view China as more of a competitor or customer – and why?
  2. Now imagine you are the NSC Senior Director with responsibility for technology strategy. What’s the first thing the U.S. Gov’t should do regarding semiconductors?

Class 4: Guest Speaker
Our guest speaker for our fourth class was John Hurley, former Member of the President’s Intelligence Advisory Board, an expert on semiconductors and supply chains, and former Captain, U.S. Army.

Lecture 4

If you can’t see the slides, click here

Slide 4. The critical role of semiconductors in great power competition. Both our commercial and military systems are dependent on semiconductors. China spends more on semiconductor imports than it does on oil. We framed the advances in technology as part of the 4th industrial revolution. Slides 5-7. We reminded the students of the role the DoD and IC played at Stanford turning it into an outward-facing university, which kick-started technology entrepreneurship here in Silicon Valley.

Slides 9-11 Dual-use technology. For the first time in 75 years, federal labs and our prime contractors are no longer leading innovation in many critical technologies including AI, machine learning, autonomy, biotech, commercial access to space, etc. Rapid advances in these areas are now happening via commercial firms – many in China. This is a radical change in where advanced technology comes from. In the U.S., the government is painfully learning how to reorient its requirements and acquisition process to buy these commercial, off-the-shelf technologies. (Products that are sold commercially and to the DoD are called “dual-use.”)

Slide 15. Semiconductor industry. We began a deep dive into semiconductors by drawing the map of the semiconductor industry (Slides 3-15 from this required reading.) Five companies provide the majority of the wafer fab equipment needed to make chips. TSMC is the leading fab for manufacturing logic chips. (Slides 32-33 from this required reading.) Of the 29 new fabs starting construction in 2021-22, over half are in China and Taiwan.

Slide 16. TSMC Case. We took the class through the TSMC case study and mapped out the roles and interests of TSMC, China, Intel, and the U.S. Slides 17-18. We discussed China’s drive for semiconductor independence, U.S. export controls on Huawei (why and its consequences,) the various constituencies of a U.S. semiconductor policy (Commerce Department, DoD, U.S. chip makers, U.S. semi equipment suppliers, etc.), whether TSMC’s success makes Taiwan more or less secure, given China’s goals of reunification with Taiwan.

Slide 19-20. Policy.  How do decision makers formulate policy? Does it start by asking “What problem do we want to solve?” Using semiconductors as an example, is it China’s access to U.S. technology?  Or is it China embedding this advanced U.S.-designed technology into their military systems? Or what happens to TSMC and Western access to advanced technology if China quarantines or invades Taiwan?

How do policy makers select and narrow a problem? Is it based on the value the policy adds for identified stakeholders? Is it a personal passion/interest? Specifically for China and semiconductors, what are potential solution ideas? Export controls? Stronger CFIUS regulations? How do you take into account stakeholder feedback (DoD, Commerce Department, commercial firms)? And once you create a policy, how do you effectively implement it?

Slide 21 -23. Class midterm assignment: Assume you’re a policy maker. Write a 2,000-word policy memo that describes how a U.S. competitor is using a specific technology  (semiconductors, AI, autonomy, cyber, etc.) to counter U.S. interests. Propose how the U.S. should respond.

Slides 25- 32 Group Projects. We had several teams talk about their learnings from their out-of-the building interviews. Team ShortCircuit (Slide 29) is working on how the U.S. should improve its ability to design and produce semiconductors, and develop and retain relevant talent. They heard from a professor that the ratio of Stanford students taking software versus hardware courses was 10-to-1 software, a complete reversal from decades ago. We discussed whether  1) that was true or just anecdotal 2) if true, was it the same in other research universities, 3) why it happened (software startups are getting funded at obscene valuations)? 4) and what kind of incentives and policies would be needed to change that, and 5) where in the value chain those might be most effective (students, venture capitalists, government, etc.)

Next week: Artificial Intelligence / Machine Learning

Lessons Learned

  • Semiconductors are the oil of the 21st All economies run on them.
  • Semiconductors are China’s biggest imports
  • China’s roadmap for building an indigenous semiconductor industry and accelerating chip manufacturing is the National Integrated Circuit Plan
    • The goal is to meet its local chip demand by 2030
  • The U.S. is dependent on TSMC, located in Taiwan, for its most advanced logic chips
    • China claims Taiwan is a province of China
    • TSMC will build a fab in Arizona, but it will represent only 2% of its capacity
  • What are U.S. policy makers’ options?


11/02/2021 Technology, Innovation, and Great Power Competition – Class 4 – Semiconductors

Technology, Innovation, and Great Power Competition – Class 3 – Russia

This article first appeared in West Point’s Modern War Institute. 


We just had our third week of our new national security class at Stanford – Technology, Innovation and Great Power CompetitionJoe FelterRaj Shah and I designed the class to cover how technology will shape all the elements of national power (our influence and footprint on the world stage).

In class 1, we learned that national power is the combination of a country’s diplomacy (soft power and alliances), information/intelligence, its military, economic strength, finance, intelligence, and law enforcement. This “whole of government approach” is known by the acronym DIME-FIL. And after two decades focused on counter terrorism the U.S. is engaged in great power competition with both China and Russia.

In class 2, we learned how China is using all elements of national power: diplomacy (soft power, alliances, coercion), information/intelligence (using its economic leverage over Hollywood, controlling the Covid narrative), its military might and economic strength (Belt and Road Initiative,) to exploit Western finance and technology.  This has resulted in Western democracies prioritizing economic cooperation and trade with China above all else.  China’s goal is to challenge and overturn the U.S.-led liberal international order and replace it with a neo-totalitarian model.

Going forward, coexistence with China will involve competition but also cooperation. But it’s going to take the demonstrated resolve of the U.S. and its allies to continue to uphold a rules-based order where nations share a vision of a free and open Indo-Pacific where the sovereignty of all countries are respected.

Catch up with the class by reading our intro to the class, and summaries of Class 1 and Class 2.

All which leads to today’s topic, the other great power – Russia.


 

Class 3 Required Readings

Fall of the USSR

Russian Geopolitics & Foreign Policy

Putin & Putinism

Russia’s Pivot to Asia & the Chinese-Russian Relationship

Russian Technology Strategy

Reading Assignment Questions:

Pick one of the below questions and answer in approximately 100 words, based on the required readings. Please note that this assignment will be graded and count towards course participation.

  1. Compare and contrast the viewpoints of John Mearsheimer and Michael McFaul on drivers of Russian foreign policy. Where do they agree? Disagree? Which perspective do you agree with more and why?
  2. Evaluate the perspectives of Artyom Lukin and Chris Miller on Russia’s so-called pivot to Asia. Do you agree with one more than the other? Do you believe that the pivot is more a rhetorical or substantive strategic move on the part of Moscow?

Class Discussion Questions:

  1. What are Russia’s geopolitical interests, goals, and/or objectives? From Moscow’s perspective, what are the main obstacles standing in the way of achieving its national goals?
  2. To what degree is Vladimir Putin a unitary actor? How much is he the system of government versus the product of a system?
  3. How does Moscow view the existing, American-led rules-based international order?
  4. What role, if any, does ideology play in Moscow’s strategy?
  5. In what ways are Moscow’s goals compatible and/or incompatible with U.S. national interests?
  6. In what domains does the competition between the United States and the Russian Federation play out? How do these domains interact with one another? Is cooperation between the two possible and beneficial?
  7. How would you characterize the Sino-Russian relationship? In what dimensions is the relationship the strongest? Where are its fault lines? Is the relationship enduring or transient?

Class 3: Guest Speaker

Our guest speaker for our third class was Mike McFaul, the former U.S. Ambassador to the Russian Federation and former National Security Council Senior Director for Russian and Eurasian Affairs. Mike wrote about his experience as ambassador in From Cold War to Hot Peace: An American Ambassador in Putin’s Russia. At Stanford, Mike is the Director of the Freeman Spogli Institute for International Studies,Stanford’s research institute for international affairs, and the home for this class and the Gordian Knot Center for National Security Innovation.

Lecture 3

If you can’t see the slides, click here

Ambassador McFaul pointed out that at times Russia pursues security and economic interests in parallel to ideological aims. At times, these objectives complement each other. At other times, they clash. He posited it’s because Russian policy is run by Putin and his political institutions. Slide 7

We then reviewed highlights from the assigned readings. John Mearsheimer’s article took the contrarian position that the United States and its European allies share most of the responsibility for the crisis in Crimea. Slide 8.

Slides 10-12 led the conversation about the end of the Cold War & Collapse of the USSR. George Kennan was the author of the 1946 Long Telegram which set in motion the policy of “containment” of the Soviet Union. He lived to see its collapse a half-century later, and wrote, “I find it hard to think of any event more strange and startling, and at first glance more inexplicable, than the sudden and total disintegration and disappearance…of the great power known successively as the Russian Empire and then the Soviet Union.”  Stephen Kotkin maintains that if the Soviet elite had so chosen, they could have sustained the Soviet Union decades longer. Perhaps the most enduring quote is from Vladimir Putin himself, “the collapse of the Soviet Union was a major geopolitical disaster of the century,” as he tries to remake Russia into a great power once again.

Slide 13, Dmitri Trenin from the Carnegie Center points out that the 2014 Ukrainian crisis was the Rubicon. Russia broke a quarter century of cooperative relations among great powers pivoting away from the west, starting a new era of intense competition. Slide 14, Mike McFaul has a more nuanced view. “For a complete understanding of Russian foreign policy.., individuals, ideas, and institutions—President Vladimir Putin, Putinism, and autocracy—must be added to the analysis. (The).. three cases of recent Russian intervention (in Ukraine in 2014, Syria in 2015, and the United States election in 2016) illuminate the causal influence of these domestic determinants in the making of Russian foreign policy.

Slide 15, Russia’s pivot to China.

China-Russian relations are now at their highest point since the mid-1950s, being drawn to each other by the most elementary law of international politics: that of the balance of power. Slide 16 Russia has long struggled to overcome the constraints imposed by the country’s chronic inability to retain talent in support of homegrown innovation and R&D.

North Korea/Iran/Non-Nation States
We also covered the two regional threats to international security – North Korea and Iran – as well as the continued threats of terrorism from non-nation states (Al-Qaeda’s, ISIS).

Slides 20-22. North Korea has robust and expanding nuclear weapons program with 10-40 nuclear weapons. Their ballistic missile program not only threatens their neighbors, but their development of long-range ICBMs puts the entire continental United States in range of their nuclear weapons.

Slides 23-25 the Islamic Republic of Iran (IRI) has actively pursued nuclear weapons and long range ballistic missiles. Under the Iran Nuclear Deal (JCOPA) they had agreed to limit their uranium to 3.67% enrichment. They broke out of the deal in 2019. Today, their uranium enrichment has reached 60% enrichment (90% is weapons grade). Iran has been a major source of regional destabilization, hostage-taking, and sponsorship of terrorism: Ansar Allah (Houthis) in Yemen, Hezbollah in Lebanon, Hamas/PIJ in Palestine, numerous Shia militias in Iraq (Kataib Hezbollah, Asaib Ahl al Haq, Badr Organization). Iran’s long-running conflict with Israel is a perennial potential flashpoint for a broader conflict in the region. Iran has been actively using cyber attacks and has attacked and harassed commercial shipping and Freedom of Navigation Operations in the Persian Gulf and the Strait of Hormuz.

Slides 26-27 Non-nation states haven’t gone away. They are a persistent, survivable threat unconstrained by traditional geopolitical checks (irrational actor). They are capable of regional and international terror attacks. Some are actively pursuing acquisition of weapons of mass destruction (nuclear, chemical, biological). Addressing the problem through counterinsurgency/ counter terrorism operations, runs the risk of long-term engagements that damage other national objectives and, sometimes, the national interest. Yet, if left unaddressed, these insurgencies can spread globally and create second- and third-order challenges (al-Shabab, Boko Haram, Abu Sayyaf).

Slides 28-31 covered the Group Project. The class has formed into 7 teams – slides 32-38. We suggested they get out of the building to first deeply understand the problem they’ve selected.

We offered a series of questions they may want to ask:

Slide 33. Who has this problem? Why does the problem exist? Consequence of the problem? When do they need a solution? How does this get deployed/delivered? How are they solving it today? How do you know you solved the problem?

Slide 34. Next, after they validate the problem: What would a minimum viable product look like? Who would build and deliver the final product/service? How to you create an “Innovation Insurgency” around the idea? Who would have to get excited about the MVP to fund it? Who are the saboteurs?

Next week we start talking about the impact of commercial technology on Great Power Competition. First up – semiconductors.

Lessons Learned

  • After the collapse of the Soviet Union, the U.S. and the Russia Federation had a two-decade long cooperative relationship
  • In 2014 with the Russian-Ukrainian war and Russia’s annexation of Crimea, and in 2015 with Russian intervention in the Syrian civil war, Russia’s interests and the West’s have radically diverged
    • Mike McFaul makes the case that Putin, Putinism, and the Russian autocracy are key determinants of their foreign policy
  • This week, student teams will start getting out of the building to build reflexes and skills to deeply understand a problem
    • By gathering first-hand information to validate that the problem they are solving is the real problem, not a symptom of something else
    • Then, students will begin rapidly building minimal viable solutions as a way to test and validate their understanding of both the problem and what it would take to solve it


Technology, Innovation, and Great Power Competition – Class 2 – China

This article first appeared in West Point’s Modern War Institute.


We just had our second week of our new national security class at Stanford – Technology, Innovation and Great Power CompetitionJoe FelterRaj Shah and I designed the class to cover how technology will shape all the elements of national power (our influence and footprint on the world stage).

Catch up with the class by reading our intro to the class and a summary of Class 1.

A key focus of the class is the return of Great Power competition. This isn’t an issue of which nation comes in first, it’s about what the world-order will look like for the rest of the century and beyond. Will it be a rules-based order where states cooperate to pursue a shared vision for a free and open region and where the sovereignty of all countries large and small is protected under international law? Or will an alternative vision for an autocratic and dystopian future be coerced and imposed by revisionist powers set on disrupting the U.S. led international order- an order that has brought the world unprecedented peace and prosperity since the end of the Second World War?

All of which leads to today’s topic – China.


Class 2 Required Readings

Class 2- Reading Assignment Questions

Pick one of the below questions and answer in approximately 100 words, based on the required readings.

  • To what degree does the People’s Republic of China have an overarching grand strategy, according to the readings? Do you agree or disagree with the arguments of the readings and why? Even if China does have a grand strategy, is it possible for China to maintain coherent, consistent execution of its strategy? Why or why not?
  • What are the CCP’s objectives regarding the international system? What instruments of national power does the CCP employ to achieve which specific impacts in order to achieve its objectives?

Class 2-  Discussion Questions

  • What is the Chinese Communist Party (CCP) trying to achieve? What are its goals and objectives? What is Xi Jinping trying to achieve? To what extent are Xi’s goals congruent with the broader CCP’s goals?
  • How does the CCP and/or Xi view the existing international system?
  • From the CCP’s perspective, what are the main obstacles standing in the way of achieving the goal of “National Rejuvenation”?
  • What role does ideology play in the CCP’s strategy?
  • In what ways are the CCP’s goals compatible and/or incompatible with U.S. national interests?
  • In what domains does the competition between the United States and the People’s Republic of China play out? How do these domains interact with one another?

Class 2- Guest Speakers

Our speakers for our second class were Matt Pottinger and Matt Turpin.

Matt Pottinger, was a former Deputy National Security Advisor and former National Security Council Senior Director for Asia. As a former Marine, Matt had 3 combat deployments in Iraq and Afghanistan. Prior to joining the Marine Corps, Matt was a reporter in China, first at Reuters, then at the Wall Street Journal.

Matt Turpin, was a former National Security Council Director for China and the Senior Advisor on China to U.S. Secretary of Commerce. Before entering the White House, Turpin served over 22 years in the U.S. Army. Among other Indo-Pacific focused roles, he served as a China advisor to the Chairman of the Joint Chiefs of Staff at the Pentagon and assisted the Deputy Secretary of Defense with the Defense Innovation Initiative, examining the role of innovation in U.S. defense policy.

Lecture 2

If you can’t see the slides click here.

Slides 7-10 are selected quotes from our assigned reading. Our lecture and discussion (slides 11-16) took us through the evolution of the hopes the U.S. had for its four-decade-long strategy of diplomatic and economic engagement with China. The hope was that helping China grow its economy would lead to liberalization of its government and greater freedoms for its people. Deng Xiaoping said China needed to “hide our capabilities, bide our time.” Over time, Xi has moved China to a more overt and aggressive phase, no longer hiding its intention to challenge the West. As we discovered, China’s agenda always had been radically different than ours. The growing realization over the last five years is that our hopes for China to democratize as it developed economically were terribly naïve. What we’ve come to realize is that China has been playing a decades-long game to challenge and overturn the U.S.-led liberal international order and replace it with a neo-totalitarian model.

Realizing this, four years ago the U.S. reoriented from a focus on counter terrorism to a new emphasis on great power competition with Russia and China. This new effort can be seen in the Interim U.S. National Security Strategy (which outlines the major U.S. national security concerns and how we plan to deal with them) and 2018 National Defense Strategy  (which identifies the priorities and capabilities required by the warfighters to implement the National Security Strategy).

Relevant to this course, China is using all elements of national power: diplomacy (soft power, alliances, coercion), information/intelligence (using its economic leverage over Hollywood, controlling the Covid narrative), its military might and economic strength (Belt and Road Initiative.) China has exploited western finance and technology, and has successfully convinced Western democracies to prioritize economic cooperation and trade with China above all else.

At home, China’s use of digital authoritarianism (facial recognition, biometrics, and social credit) has turned its own country into a surveillance dystopia to ensure that there are no internal challenges to the supremacy of the Chinese Communist Party (CCP). The CCP’s oppression of the Uyghurs – a Muslim minority in the western province of Xinjiang – is considered a genocide by many as well as a harbinger of what a Chinese world order will look like.

Going forward, coexistence with China will involve competition but also cooperation. But it’s going to take the demonstrated resolve of the U.S. and its allies to continue to uphold a rules-based order where nations share a vision of a free and open Indo-Pacific where the sovereignty of all countries are respected.

Slides 18-20 dug a bit deeper about why and how of the group project. Students formed teams to work on one of the Great Power Competition issues at the intersection of commercial technologies (AI, machine learning, autonomy, biotech, cyber, commercial access to space, et al.) and DIME-FIL (Diplomatic, Information, Military and Economic, Finance, Intelligence and Law Enforcement.)

Given who our students are, we assume they can all go online and to the library and write a great research paper. As we pointed out to them, while you can be the smartest person in the building, it’s unlikely that 1) that all the facts are in the building, 2) you’re smarter than the collective intelligence sitting outside the building.

Our teaching assistants (who previously took our Hacking for Defense class) shared with the students their own journey of what happens to early assumptions and how solutions evolve when you get out of the building.

If you can’t see the Project Agrippa slides click here.

We want our students to build the reflexes and skills to deeply understand a problem by gathering first-hand information and validate that the problem they are solving is the real problem, not a symptom of something else. Then, students will begin rapidly building minimal viable solutions (policy, software, hardware …) as a way to test and validate their understanding of both the problem and what it would take to solve it.

And they thought we were just going to have great lectures.

Next week – Russia

Lessons Learned

  • The U.S. hoped that helping China grow its economy would lead to liberalization of its government and greater freedoms for its people
    • We were terribly naïve
  • China has been playing a decades-long game to challenge and overturn the U.S.-led liberal order and replace it with a neo-totalitarian model
  • Students will collaborate on teams to first understand and then work to solve national security challenges at the intersection of DIME-FIL and dual-use technology


Technology, Innovation, and Great Power Competition – Class 1

This article first appeared in West Point’s Modern War Institute.


We just had our first week of our new national security class at Stanford – Technology, Innovation and Great Power CompetitionJoe FelterRaj Shah and I designed the class to cover how technology will shape all the elements of national power (our influence and footprint on the world stage).

National power is the combination of a country’s diplomacy (soft power and alliances), information/intelligence and its military and economic strength. The instruments of national power brought to bear in this “whole of government approach” were long known by the acronym DIME (Diplomatic, Information, Military and Economic) and in recent years have expanded to include “FIL”- finance, intelligence and law enforcement-or DIME-FIL.

Last year, the class focused exclusively on the impact of new technology on the military. Given the broadened scope this year, we’ve tweaked the course content and title to Technology, Innovation and Great Power Competition to better reflect the “whole of government” approach necessary for long-term strategic competition.


The course is cross listed with Stanford’s Masters in International Policy program and the Management Science and Engineering department. The students joining this fight come from a diverse range of disciplines at Stanford including computer science, political science, business, law, public policy, economics, and engineering. If the past is a prologue, they’ll go off to senior roles in defense, foreign policy and to the companies building new disruptive technologies. Our goals are to help them understand the complexity and urgency of the issues, offer them a model to understand the obstacles and path forward, and to inspire them to help lead how the U.S. leverages all instruments of national power to meet 21st century challenges.

In this year’s class, we want to:

  1. Help our students understand how each component of our national security and instruments of national power are now inexorably intertwined with commercial technology. We will explore the complexity and urgency of the impact of the 21st century onslaught of commercial technologies (AI, machine learning, autonomy, biotech, cyber, commercial access to space, et al.) in all parts of the government — from State to the Department of Defense to Treasury and many more.
  2. Give them hands-on experience on how to deeply understand a problem at the intersection of DIME-FIL and dual-use technology. First by developing hypotheses about the problem; next by getting out of the classroom and talking to relevant stakeholders across government, industry, and academia to validate their assumptions; and finally taking what they learned to propose and prototype solutions to these problems.

Class 1 – Required Readings

Overview of Great Power Competition

U.S. National Security Strategy

Class 1 Discussion Questions

  1. Is great power competition an accurate way to describe the U.S. relationship with China? With Russia? Is doing so productive for U.S. interests? Why or why not?
  2. What are the risks of casting the US relationship with China and/or Russia as a whole-of-government competition? What are the risks of not viewing these relations as competitive?

Class 1 – Guest Speaker

Our speaker for our first class was former Secretary of Defense General Jim Mattis who gave an inspiring talk about strategy, the Department of Defense’s pivot to great power competition that he led during his tenure as Secretary, and the importance and rewards of service to the nation. General Mattis joined the Marine Corps in 1969, and he has led Marines and then later joint forces at every level from platoon commander as a Lieutenant all the way up to combatant commander of US Central Command as a four-star general. He recently led our entire US Defense Department as our country’s 26th Secretary of Defense. We’re fortunate to now have him back here at Stanford at the Hoover Institution.

Lecture 1

If you can’t see the slides click here.

After introducing the teaching team and class logistics (slides 1-13) we briefly overviewed the quarter (slide 17)

We set up the class with a discussion of the return of great power competition. This isn’t an issue of which nation comes in first, it’s about what the world-order will look like for the rest of the century and beyond. Will it be a rules-based order where states cooperate to pursue a shared vision for a free and open region and where the sovereignty of all countries large and small is protected under international law? Or will an alternative vision for an autocratic and dystopian future be coerced and imposed by revisionist powers set on disrupting the U.S. led international order – an order that has brought the world unprecedented peace and prosperity since the end of the Second World War? Slide 19.

And then we discussed the pivot in the U.S. National Security Strategy (which outlines the major national security concerns of the United States and how the U.S. plans to deal with them) and 2018 National Defense Strategy (which identifies the priorities and capabilities required by the warfighters to implement the National Security Strategy.)

These documents reoriented the U.S. from its focus on counter terrorism to great power competition with Russia and China (Slides 23-27). Slides 34-38 expanded on the three lines of effort in the National Defense Strategy: 1) Build a Lethal Force, 2) Strengthen Alliances and Build New Partnerships, 3) Reform the Defense Department. Slides 41-42 summarized the competing visions of the U.S. and China. The Biden Administration’s Interim National Security Guidance was introduced which emphasizes continuity in its assessment of the challenges posed by China and Russia and the anticipated enduring era of great power competition. (the White House is now referring to the approach toward China as “strategic competition” rather than Great Power Competition. (The White House is now referring to the approach toward China as “strategic competition” rather than Great Power Competition.)

Slides 45-55 introduced seven instruments of national power and the concept of DIME-FIL. We discussed that the national power of a country (its influence and footprint on the world stage) is more than just its military strength. It’s the combination of a country’s diplomacy (soft power and alliances,) information, and its military, economic, financial, intelligence and law enforcement strength. (This concept is known by its acronym, DIME-FIL.) We pointed out that in many of these areas we’re no longer the leader (the DoD has a polite euphemism for this – “we’re overmatched” – meaning second place.)

Slides 57 and 58 reminded the students that this class is not just about the reading and lectures. 50% of their grade is a group project at the intersection of DIME-FIL and dual-use technologies (AI/ML, quantum, semiconductors, access to space, cyber, biotech, et al.)

Next week – China, China, China

Lessons Learned

  • The U.S. is engaged in a Great Power Competition – and in many areas we’re not winning
  • Multiple components, not just military strength make up a nation’s power
    • Diplomacy, Information, Military, Economic, Financial, Intelligence, Law
    • Acronym is DIME-FIL
  • Dual-use technology, that is technology that has both commercial and military use, has changed the calculus for national power
    • AI/ML, autonomy, quantum, semiconductors, access to space, cyber, biotech, et al
    • Advances in these technologies are no longer driven by government directives but by consumer demand.
  • Students will work on team national security projects, challenges at the intersection of DIME-FIL and dual-use technology
  • We’re educating the next generation of leaders who will not just discuss policy but will create solutions

Technology, Innovation and Great Power Competition

For 25 years as the sole Superpower, the U.S. neglected strategic threats from China and a rearmed Russia. The country, our elected officials, and our military committed to a decades-long battle to ensure that terrorists like those that executed the 9/11 attacks are not able to attack us on that scale again.  Meanwhile, our country’s legacy weapons systems have too many entrenched and interlocking interests (Congress, lobbyists, DOD/contractor revolving door, service promotion of executors versus innovators) that inhibit radical change. Our economic and foreign policy officials didn’t notice the four-alarm fire as we first gutted our manufacturing infrastructure and sent it to China (profits are better when you outsource); then passively stood by as our intellectual property was being siphoned off; and had no answer to China’s web of trade deals (China’s Belt and Road). The 2018 National Defense Strategy became a wakeup call for our nation.

National power is ephemeral. Nations decline when they lose allies, decline in economic power (the UK in the 20th Century); they lose interest in global affairs (China in the 15th Century); internal/civil conflicts (Russia in the 20th Century); a nations military can miss disruptive technology transitions and new operational concepts. One can make the case that all of these have/or are happening to the United States.


Joe Felter, Raj Shah and I are about to start our second year of teaching what was our Technology, Innovation and Modern War class. (See all the class sessions here.) The goal of last year’s class was to explain how new emerging technologies have radically changed how countries fight and deter threats across air, land, sea, space, and cyber. And to point out that winning future conflicts requires more than just adopting new technology; it requires a revolution in thinking about how this technology can be acquired and integrated into new weapons systems to drive new operational and organizational concepts that change the way we fight.

This year we’ve expanded the scope of the class to look beyond just the effect of new technology on weapons and operational concepts. We’re now covering how technology will shape all the elements of national power (our influence and footprint on the world stage). National power is the combination of a country’s diplomacy (soft power and alliances), information/ intelligence and its military and economic strength. The instruments of national power brought to bear in this  “whole of government approach” were long  known by the acronym, DIME (Diplomatic, Information, Military and Economic) and in recent years have expanded to include “FIL”- finance, intelligence and law enforcement-or DIME-FIL. Given the broadened scope of the class, we’ve tweaked the course title to Technology, Innovation and Great Power Competition.

Our goals in this year’s class are to:

  1. Help our students understand how each component of our national security and instruments of national power are now inexorably intertwined with commercial technology. We will explore the complexity and urgency of the impact of the 21st century onslaught of commercial technologies (AI, machine learning, autonomy, biotech, cyber, commercial access to space, et al.) in all parts of the government — State, climate change, Department of Defense, economic policy, et al.
  2. Give them hands-on experience to propose and prototype solutions to these problems.

Much like last year’s class, this one has three parts – teaching team lectures, guest speakers, and most importantly team projects. We’ll be using the concept of commercial technologies’ impact on DIME as the connective element between each week’s class.

In addition to the teaching team lectures and assigned readings, last year we had 20+ guest speakers including two Secretaries of Defense, a Secretary of State, members of Congress, Generals, Admirals and policy makers. We hope to enrich the student experience with similar expertise and experience this year.

Last year, team projects started with a mid-term paper and finished with what was supposed be a final paper project. However, one team took their project, got out of the building, and interviewed and presented a radically new operational concept for the South China Sea. It’s an idea that has caught fire. So this year we’re going to build on that success. Teams will form on week 1, pick an area of interest across DIME and spend the quarter interviewing key stakeholders, beneficiaries, policy makers, etc. while testing proposed solutions.

If the past is a prologue, our students, a mix between international policy and engineering, will be the ones in this fight. They’ll go off to senior roles in State, Defense, policy and to the companies building new disruptive technologies.

This is the first in a series of classes from the new Stanford Gordian Knot Center for National Security. (More on this in later post.)

Lessons Learned

  • Technology, Innovation and Great Power Competition will focus on how our national security and national power is intertwined with commercial technology. We will explore:
    • AI, machine learning, autonomy, biotech, cyber, commercial access to space, et al.
    • In all parts of the government; State, climate change, Department of Defense, economic policy, et al.
  • Give our students hands-on experience to propose and prototype solutions to these problems

Lead and Disrupt

You think startups are hard? Try innovating inside a large company where 99% of the company is executing the current business model, while you’re trying to figure out and build what comes next.

Charles O’Reilly and Michael Tushman coined the term an “Ambidextrous Organization” to describe how some companies get this simultaneous execution and innovation process right. Their book Lead and Disrupt describes how others can learn how to do so.

I was honored to write the forward to their second edition.  Here it is in its entirety.


What you’re holding in your hand is a revolutionary document. It answers the questions of why some companies trace a brilliant arc as a shooting star and then flame out while others continue to thrive. Why are some companies able to reinvent themselves while others, once market leaders, are disrupted?

Is it that some CEOs are better than others? Are their people smarter? Do they have better sales, marketing, or product development groups?

The short answer is no. What the winners start with is the realization that in a world of continuous disruption, they have only a few years to develop new capabilities or be pushed over the brink. And they also recognize that simply exploiting their existing assets, capabilities, and business models is insufficient for long-term survival. So they prepare for future markets by exploring new ventures.

This radical idea of companies continuing to execute and exploit their existing business model while simultaneously exploring and creating new products, businesses, and business models is what O’Reilly and Tushman call ambidexterity. While simple at first glance, the concept is revolutionary in its ability to transform an enterprise. This book not only explains the “why does this happen” but more importantly gives you the tools for “what to do about it.”

In the 20th century, finding the successful formula for repeatable start-up success remained a black art. The idea of exploitation versus exploration was central in my own work in building the lean methodology for start-ups. The key was the realization that start-ups are not simply smaller versions of large companies, which execute/exploit known business models, and whose customers, problems, and necessary product features are all “knowns.” In sharp contrast, start-ups operate in “search/explore” mode, seeking a repeatable and profitable business model. The search for a business model requires dramatically different rules, roadmaps, skill sets, tools, and culture in order to minimize risk and optimize chances for success.

Recognizing the anomaly was just the first step. There were no standard tools, methods, or playbooks for start-ups. So we built our own tools to enable founders to rapidly translate their vision into hypotheses and then into validated facts. These tools—Customer Development, Agile Engineering, and Business Model design—became the lean start-up methodology, a rigorous approach to testing hypotheses and building prototypes, and, on the basis of data and evidence, adjusting or pivoting to a variant of the original hypothesis. Today, lean is the de facto method for building new start-ups.

Fast forward two decades, and many companies have adopted these start-up tools and methods to deal with disruption. However, after watching innovators in large companies try to use the lean start-up methodology, I’m embarrassed to say that it has mostly devolved into standalone innovation activities (corporate incubators, accelerators, and so on) resulting in “innovation theater,” with nice coffee mugs and posters but little impact on the top or bottom line.

In this book O’Reilly and Tushman succinctly articulate why these tools succeed in start-ups but fail in large companies. Most R&D budgets in established companies are spent on sustaining innovations that support existing products and operating divisions and the attendant processes and procedures, rigorous measurement, and controls. These formalized structures, necessary  for managing execution/exploitation, actually strangle disruptive innovation before it can start.

Companies built around exploitation emphasize efficiency, productivity, and the reduction of variance, whereas exploration demands searching, discovering, and accepting risk and failure. To accomplish both simultaneously—to be an ambidextrous company—requires not only separate organizations for each function, but also different business models, competencies, systems, processes, incentives, and cultures. In short, it requires a different way not only to manage a company, but a different way to organize it as well.

This is a really big idea.

To be truly successful at ambidexterity firms must master the new skills of ideation, incubation, and scaling. Firms first generate new ideas via ideation: the last twenty years have seen an explosion of corporate venture capital, open innovation, and employee involvement via hackathons and incubators. A smaller number of companies have become proficient at the next step—incubation—rigorously testing new business concepts, using the lean start-up methods of Customer Development, Agile Engineering, and Business Model design. However, relatively few have successfully scaled new internal ventures to enable them to stay ahead of disruption. It is this discipline of scaling, actually building new, substantive, profitable businesses, that is critical to the success of new, highly innovative corporate ventures. It’s only when companies can scale that they truly win. Scaling is the crux of ambidexterity.

Recognizing the need for ambidexterity and building an ambidextrous organization are tests of corporate leadership.

In the end, exploitation pays your salary while exploration pays your pension. Companies that survive do both.

This book will do for companies what the lean methodology did for start-ups – give its leaders the essential playbook for transforming their organizations to meet the future.

Get your copy of Lead and Disrupt.

Why Innovation Heroes are a Sign of a Dysfunctional Organization

A week ago I got invited to an “innovation hero” award ceremony at a government agency. I don’t know how many of these I’ve been to in the last couple years, but this one just made my head explode.

The award was for an entrepreneur who worked against all odds to buck the system to turn her insight into an application. She had realized it was possible to automate a process that was being done manually – reentering data from one spreadsheet to another and annotating it with additional data from another system. Inspired by her own work problem, she talked to her peers and other stakeholders, built multiple minimum viable products, and figured out how to get engineering, policy, legal, security and everyone else in the enterprise to actually approve it. And then she fought with the acquisition folks to buy the trivial amount of additional hardware needed to connect it. It was a development process that would’ve taken three weeks in a startup, but inside this agency took 10 months (which was considered fast.) At each step she was confronted with “we’re not budgeted for this” or “this isn’t on our schedule” and “this isn’t your job.” Most rational people would’ve given up and said “you can’t fight the system“ but yet she persisted.

Having seen this scenario play out multiple times at multiple large corporations and government agencies, I could’ve repeated the speech her agency director made at the ceremony verbatim. “Blah blah blah and a $100 bonus.” Everyone politely applauded and went back to work feeling good. I was simply depressed. Never once did anyone ever step back and say that what we just witnessed was leadership rewarding and perpetuating a dysfunctional and broken system.

I’m constantly puzzled why thoughtful and astute CEOs and Agency Directors never ask, “Why is it that innovations require heroics to occur in our organization? Why don’t we have a repeatable process for innovation? What are the obstacles in the way of delivering needed innovation with speed and urgency in our organization? Why is it that after each one of these awards we don’t go back and fix the parts of the system that made creating something new so difficult?”

Instead, everyone at this award ceremony just went back to work like it was business as usual. I realized that innovation in this organization was going to continue to happen by heroics and exception rather than by design. As I’ve seen play out way too many times, ultimately the innovators get tired of banging their heads against the wall and leave government service or large companies. Their organizations hemorrhage the very people they need to help them compete against aggressive adversaries or competitors who have them in their sights.

An Organizational Design Problem
Sadly, this wasn’t a single act of bad management or malice. No single individual thought they weren’t doing their job. However, if anyone had taken the time to deconstruct the reason for the roadblocks to innovation, they would have uncovered they weren’t just obstinate middle managers, or a single bad process. Asking a series of “five whys,” (see this HBR article) would have discovered that:

  1. The agency’s existing processes were not designed for non-standard work. As in most large organizations, they were designed for the repeatable execution of pre-defined tasks.
  2. There were no resources available for non-standard work or any parallel organization responsible for innovation.
  3. The culture of the organization discouraged experimentation and punished the inevitable failures of a learning and discovery process.

Ultimately, the root cause was the entire government agency lacked an Innovation Doctrine. This manifested itself as an organizational design problem. There was simply no permanent place in the organization for unscheduled innovation to happen. And even if there had been, there was no way to turn demos into deployment with speed and at scale.Innovation Doctrine
In peacetime and/or when you’re the dominant superpower (or a commercial market leader), the emphasis is on process, procedures, and sustainment of existing systems. Deviations from that create chaos and diverge from the predetermined are not welcomed, let alone promoted, and funded. They are eliminated. This works great when the external environment -competitors, adversaries, technologies, threats – is static. However in times of crisis, war or disruption, these unconventional thinkers and innovators are exactly what is needed, and their ideas need to be rapidly deployed.

Well-managed organizations realize that they need both innovation and execution. With execution being dominant in peacetime/competitive advantage you have managers of process. In crisis/wartime innovation is dominant. Instead of mangers of process you need innovation leaders who shepherd ideas through an innovation pipeline. (see this HBR article.) Successful organizations recognize that innovation isn’t a single activity (incubators, accelerators, hackathons); it is a strategically organized end-to-end process from idea to deployment.

While innovation and execution have different processes, people, and culture, they need to respect and depend on each other. This ambidexterity (see this HBR article) and the innovation processes that go with it require an innovation doctrine – an overall strategy and playbook for the entire organization and enterprise that includes an innovation pipeline and processes intended to drive innovation efforts, and describes the role of innovation leaders in an ambidextrous organization – all focused on rapid deployment of new capabilities.

Lessons Learned

  • Innovation heroics are a symptom of a lack of an innovation doctrine
  • An innovation doctrine has a playbook, and innovation pipeline and describes the role of innovation leaders in an ambidextrous organization – all focused on rapid deployment of new capabilities
  • All large organizations – both government and corporate—need an innovation doctrine or else risk being outpaced by competitors.

The Class That Changed the Way Entrepreneurship is Taught

This article first appeared in Poets and Quants

 

Revolutions start by overturning the status quo. By the end of the 20th century, case studies and business plans had reached an evolutionary dead-end for entrepreneurs. Here’s why and what we did about it.


The Rise of Business Schools – Management as an Occupation
The business school was invented in the first decade of the 20th century in response to a massive economic transformation in the U.S. that took place in the last quarter of the 19th century. The country exited the Civil War as a nation of small businesses and ended the century with large national corporations (railroads, steel, oil, food, insurance, etc.). These explosions in company size and scale created a demand for professional managers. In 1908 Harvard Business School filled that need by creating a graduate degree – the Master of Business Administration. Its purpose was to educate management on best practices to run existing companies.

The MBA Curriculum – From Fieldwork to Case Studies
When Harvard started the MBA program there were no graduate-level business textbooks. The school used the “problem-method” which emphasized fieldwork – getting out of the classroom and visiting real companies– as an important part of the curriculum. Students observed how executives worked, interviewed them, and wrote up how real managers solved problems. Students then discussed these problems and solutions in class.

First Case Study-General Shoe

By the early 1920s a new dean changed the curriculum – shifting it from an industry orientation (steel, railroads, etc.) – to a functional one (marketing, factory and employment management (HR), etc.). This focus on a functional curriculum involved a switch to the case method; fieldwork now took second place. The case method assumes that students learn when they participate in a discussion of a theoretical situation they may face when they are a decision-maker rather than a real one they see in the field.

By 1923, 2/3rds of the courses at Harvard were taught with the case method, and the pattern was set for business education for the rest of the 20th century.

Entrepreneurship Becomes a Subject in Business Schools
While MBA programs proliferated during the first half of the 20th century, they focused on teaching management of existing companies. There were no classes on how to start a business. That is until 1947 when Myles Mace taught the first entrepreneurship course “Management of New Enterprises” at Harvard Business School. Soon others were created. In 1953 Peter Drucker offered an Entrepreneurship and Innovation class at New York University, and in 1954 Stanford’s business school offered “Small Business Management” its first small business course.

In 1967 the first contemporary MBA entrepreneurship courses were introduced at Stanford and NYU, and a year later Babson offered the first undergraduate entrepreneurship program. By 1970 sixteen schools were offering entrepreneurship courses, and in 1971 UCLA offered the first MBA in entrepreneurship. Entrepreneurship textbooks such as Small Business Management: Essentials of Entrepreneurship and Entrepreneurship: Playing to Win started to appear. In 1985 the University of Miami held the first national business plan competition. By 1991 there were 57 undergraduate and 22 MBA programs. Textbooks, papers, and journal articles proliferated.

By the end of the 20th century entrepreneurship education fell into two categories: 1) starting small businesses and 2) starting high-growth, high-risk scalable startups. But both types of entrepreneurship courses were taught using case studies and taught students how to write and execute a business plan. The curriculum of both types of courses were simply adaptations of what business schools were using to train managers for the administration and execution of existing organizations.

The case method and business plans are the antithesis of how entrepreneurs create startups
The case method assumes that students learn when they participate in a discussion of a situation they may someday face as a decision-maker. But the case method is the antithesis of how entrepreneurs create a startup. Cases teaches pattern recognition tools for static patterns—and has limited value as a tool for teaching entrepreneurship.  Analyzing a case in the classroom, removed from the realities of a new venture, adds little to an entrepreneur’s preparation for the chaos, uncertainty, and conflicting customer responses that all entrepreneurs face.

Business plans presume that building a startup is a series of predictable steps requiring execution of a plan which assumes a series of known facts: known customers, known features, known pricing, known distribution channel. As a serial entrepreneur turned educator, this didn’t make sense to me. In a new venture none of these things are truly known. The reality is that most business plans don’t survive first contact with customers.

Neither cases nor business plans replicate the actual startup experience. Cases and plans are useful for teaching managers of process, not founders. Founders of startups (and new ventures inside existing companies) are searching for product/market fit and a repeatable and scalable business model. Searching, unlike execution, is not a predictable pattern. An entrepreneur must start with the belief that all their assumptions are simply hypotheses that will undoubtedly be challenged by what they learn from customers.

Yet up until 10 years ago, schools were still teaching entrepreneurs how to build startups on the premise that they were simply smaller versions of large companies. Entrepreneurial education was trapped in the 20th century.

21st Century Entrepreneurship curriculums
At the start of the 21st century, after two decades and 8 startups, I retired and had time to think about how VCs directed their startups using business plans. I began formulating the key ideas around what became the Lean Startup – that startups and existing companies were distinctly different – companies execute business models while startups search for them. Consequently the methodologies for launching products in startups were different than for existing companies.

A decade later, I began to teach the foundations of Lean, first at UC Berkeley (Customer Development) and then at Stanford using cases and business plans. After a few years of trial and error in front of a lot of students, I realized that the replacement for the case method was not better cases written for startups and that the replacement for business plans was not how to write better business plans and pitch decks. (I did both!). Instead, we needed a new management stack for company creation.

I posited that teaching “how to write a business plan” might be obsolete.

With Lean LaunchPad, we were going to toss teaching the business plan aside and try to teach students a completely new, hands-on approach to starting companies – one which combines customer development, agile development, business models and pivots.

Let’s Teach Lean Via Experiential Learning
First I searched the academic literature trying to learn what methods would best convey information that entrepreneurship students could understand, retain, and put to practical use. There were five parts to consider:

  • What’s the level of ambiguity, realism and complexity of the course content
  • How structured are the tasks within the class?
  • What were the experiential techniques used to deliver the content?
  • What were the pedagogical components of the class?
  • How will we deliver feedback to the students?

For each of these parts of the course design we needed to consider where on the spectrum of directedversus experiential each of the five parts of the class would fall.

Direct Guidance Versus Experiential Classes
I concluded that best way to teach entrepreneurs (versus managers) was to create an experiential and inquiry-based class that would develop the mindset, reflexes, agility, and resilience needed to search for a business model certainty in a chaotic world.

Experiential learning (also called “active learning” or “learning by doing”) is designed to have a high degree of complexity and realism. It’s not about read and remember, but rather is about problem exploration, design and inventing and iterating solutions. This differs from a traditional class with directed learning where students are taught to remember facts, understand concepts, and perhaps apply procedures but not to discover these by themselves.

In contrast, experiential classes are designed with the theory that people learn best in an unguided or minimally guided environment, where the students, rather than being presented with all of the essential information, must discover, or construct that information rapidly for themselves.

This seemed to me to be the best way to teach entrepreneurship. Experiential learning is the core of how we teach the Lean LaunchPad/I-Corps/Hacking for X classes. Launched in 2011, the Lean LaunchPad capstone entrepreneurship class was unique in that it was:

  1. team-based
  2. experiential
  3. Lean-driven (hypothesis testing/business model/customer development/agile engineering).

The class aimed to mimic the uncertainty all startups face as they search for a business model while imparting an understanding of all the components of a business model, not just how to give a pitch or a demo.

The figure below illustrates the spectrum of teaching techniques and shows where our class fits on the right.

The Syllabus
We were going to teach entrepreneurship like you teach artists – combining theory with intensive hands-on practice.

This Lean LaunchPad is built around the business model / customer development / agile development solution stack. Students start by mapping their initial assumptions (their business model). Each week they test these hypotheses with customers and partners outside the classroom (using customer development), then use iterative and incremental development (agile development) to build Minimal Viable Products.

The goal is to get students out of the building to test each of the 9 parts of their business model (or mission model for Hacking for Defense students), understand which of their assumptions were wrong, and figure out what they need to do to find product/market fit and then a validated business model.

Our objective is to get them using the tools that help startups test their hypotheses and adjust when they learn that their original assumptions are wrong.  We want them to experience faulty assumptions not as a crisis, but as a learning event called a pivot —an opportunity to change the model. (More than just for use in startups, these problem-solving skills are increasingly crucial in today’s increasingly complex world.)

Each week every team presents to the teaching team – “Here’s what we thought, here’s what we did, here’s what we learned, here’s what we’re going to do next week.”

Designing the Lean LaunchPad/I-Corps Class – the “Pedagogy”
While the Lean LaunchPad/I-Corps/H4X students are experiencing what appears to them to be a fully hands-on, experiential class, it’s a carefully designed illusion. In fact, it’s highly structured. The syllabus has been designed so that we are offering continual implicit guidance, structure, and repetition. This is a critical distinction between our class and an open-ended experiential class.

Guidance, Direction and Structure
For example, students start the class with their own initial guidance – they believe they have an idea for a product or service (Lean LaunchPad/I-Corps) or have been given a clear real-world problem (Hacking for Defense). Coming into the class, students believe their goal is to validate their commercialization or deployment hypotheses. (The teaching team knows that over the course of the class, students will discover that most of their initial hypotheses are incorrect.)

Next, the business/mission model canvas offers students guidance, explicit direction, and structure. First, the canvas offers a complete, visual roadmap of all the hypotheses they will need to test over the entire class. Second, the canvas helps the students goal-seek, by visualizing what an optimal endpoint would look like – product/market fit / mission success – would look like. Finally, the canvas provides students with a map of they what they learn week-to-week through their customer discovery work.

(I can’t overemphasize the important role of the canvas. Unlike an incubator or accelerator with no frame, the canvas acts as the connective tissue – the frame – that students can fall back on when they got lost or confused. It allows us to teach the theory of how to turn an idea, need, or problem into commercial practice, week by week a piece at a time.)

Third, the tools for customer discovery (videos, sample experiments, etc.) offer guidance and structure for students to work outside the classroom. The explicit goal of 10-15 customer interviews a week along with the requirement for building a continual series of minimal viable products, provides metrics that track the team’s progress. The mandatory office hours with the instructors and support from mentors provide additional guidance and structure.

Working Memory and Reflection
One of the challenges we wanted to avoid is overloading students’ short-term memory. If you give students minimal feedback and provide no structure or guidance, most of what students experience gets forgotten. To counter that, we’ve built three techniques in to reduce the cognitive load: regular summing up, repetition, and reflection. This allows students to transfer their weekly experiences into long-term memory and knowledge.

By design, each week we make students stop, reflect, and summarize their learning (here’s what we thought, here’s what we did, here’s what we found and here’s what we’re going to do next week.) The teams present these reflections, along with required specific deliverables for each week. These weekly presentations also provide reinforcement – students need to remember their learning from each of the prior components in the business/mission model canvas to provide a context for the current week.

In addition to the week-to-week summaries, we give students a reflection week at the end of the class to synthesize, process and integrate those week-to-week learnings. And we teach them how to turn that learning into a compelling story of their learning journey.

Ambiguity, Realism and Complexity
Ambiguity in a class means the subject can have multiple right answers. Or even no right answer. Searching for answers to the business and mission problems i.e. product/market fit has maximum ambiguity – there isn’t always a correct answer, nor will the same path get you to the same answer in different circumstances.

Realism in a class means, how well does the class content match an actual problem in practice? Learning accounting in a classroom is likely similar to doing accounting in an office. However, reading case studies about startup problems in a classroom has little connection to the real world and has low realism.

Complexity refers to the number of things that can change that may affect the outcome of a decision.  As the number of things that change goes up the so does the complexity of the learning process.

New ventures are ambiguous, real and complex. Teaching “how to write a business plan” as a method to build a startup assumes low ambiguity, low realism, and low complexity when the opposite is true. So we structured the class to model a startup; extremely ambiguous with multiple possible answers (or at times none,) realism in the pressures, chaos and uncertainty of a startup, and complex in trying to understand all parts of a business model.

The Flipped Classroom
Inside the classroom, we deliberately trade off lecture time for student/teaching team interaction. The class is run using a “flipped classroom.” Instead of lecturing about the basics during class time, we assign the core lectures, recorded as video clips, as homework.

Instructors then supplement the video lectures with their own in-class short lecture about this week’s business model topic.  This allows instructors to use the class time for review of the concepts or short lectures customized for specific domains (e.g., hardware, life sciences, etc.).

Emotional Investment
In an experiential class students must be fully immersed in the experience, not just doing what the syllabus says is required of them. Project-based learning engages and motivates students Having each team present weekly in front of their peers raises the commitment (and heart rate) of the students. No one wants to be shown up by another team.

Speed and Tempo Outside Their Comfort Zones
One of the goals of the class is to talk to 100 customers and partners. That may seem like an absurdly unreasonable goal, yet all teams manage to do so. Most case-based or project classes do not offer time and resource constraints. Our class is purposely designed to offer maximum ambiguity while pushing students to achieve extraordinary results under relentless pressure and time constraints.  We stress a relentless speed and tempo because we believe that learning is enhanced when students are given the opportunity to operate outside of their own perceived comfort zones.

Our objective is to have students experience what it’s like to operate in a real-world startup. Outside the classroom walls conditions will change so rapidly that their originally well thought out plans become irrelevant. If they can’t manage chaos and uncertainty, if they can’t bias themselves for action, and if they wait around for someone else to tell them what to do, then their investors and competitors will make their decisions for them and they will run out of money and their company will die.

Therefore, every successful founder needs a decisive mindset that can quickly separate the crucial from the irrelevant, synthesize the output, and use this intelligence to create islands of order in the all-out chaos of a startup. The class is designed to emulate that chaos and teach a bias for action.

Relentlessly Direct Feedback
There’s one last part of our pedagogy that might seem out of place in an experiential class – and that’s the relentlessly direct model of feedback.

The class moves at breakneck speed and is designed to create immediate action in time-, resource-, and cash-constrained environments. The teaching team practices Radical Candor – caring personally while challenging directly. At its core, Radical Candor is guidance and feedback that’s both kind and clear, specific, and sincere, and focused on helping the other person grow.

We give the students public feedback about the quality and quantity of their work in front of their peers weekly. For some, it’s the first time they’ve ever heard “not good enough.”

Class Design – Summary
The design of the class was a balance between ambiguity, complexity and uncertainty with structure and learning strategies.

While this process is extremely effective, it can be painful to watch. Our natural inclination (at least mine) is to offer specific guidance and solutions. (There are a few times in class when the team may need explicit directions such as, “It’s time to pivot” or “Your team needs to restart.”  But these should be exceptions.)

The genius of the class design was making the class look like it wasn’t designed.

Results
In the first decade of the Lean LaunchPad class we’ve trained hundreds of other educators around the world to teach the class at their universities. By now 100s of thousands of students have taken some form of the class, and 100’s of companies have been created.

In addition, two government-funded programs have adopted the class at scale. The first was the National Science Foundation I-Corps. Errol Arkilic the then head of commercialization at the National Science adopted the class saying, “You’ve developed the scientific method for startups, using the Business Model Canvas as the laboratory notebook.”  I-Corps which is now offered in 100 universities and has trained ~2,500 teams/7,500 scientists in 100 cohorts. The National Institute of Health also teaches a version, I-Corps @ NIH,  in the National Cancer Institute.

Today, this Lean LaunchPad/I-Corps syllabus is also the basis for a series of Mission-Driven Entrepreneurship classes– Hacking for Diplomacy, DefenseOceans, non-profits and cities. Hacking for Defense is now taught in over 55 universities in the U.S., with versions of the course offered in the UK and Australia.

While the Lean LaunchPad/I-Corps curriculum was a revolutionary break with the past, it’s not the end. In the last decade enumerable variants have emerged. The class we teach at Stanford has continued to evolve. Better versions from others will appear. And one day another revolutionary break will take us to the next level.

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