Motherships versus speedboats

One of the dominant themes I’ve been hearing in Chinese boardrooms these days is the idea of transformation and innovation to prepare for a post-COVID world.

The chairman of one company recently shared with me his worry, “用过去的方法，带今天的兵，打明天的仗”, which literally means, the futility of “trying to fight tomorrow’s battles with today’s troops and yesterday’s strategies.” ?

Business leaders know they should be doing something more innovative, and they have likely identified a number of interesting opportunities already. But how do the new ventures fit with their current business, with their long-established organization, with their people, assets, and culture—all of which continue to run pretty smoothly?

A metaphor I use to describe the problem they face is the relationship between a mothership and a speedboat. The mothership is—like an established organization—fully equipped; it’s secure; it’s got sophisticated systems to keep it running. It provides the resources and the stability to the organization needs to exist and grow. At the same time, the mothership is very large and massive; steering it and adjusting course takes time.

Contrast this to the image of a speedboat. Speedboats are small, nimble, and able to zoom around the water quickly. In our corporate analogy, if the mothership is the main business, the speedboats are the innovations and the new ventures. They are driven by small, self-sufficient teams, where everyone’s effort counts.

As the commander of the mothership, as the CEO, how do you think about this? When you go after new opportunities or undergo a transformation of the business, are you launching speedboats, or are you changing the course of the mothership?

There are no obvious answers. Speedboats are more nimble, they can move faster, they have no legacy to hold them back. You can experiment and take more risks. If one of the speedboats sinks, it doesn’t pull down the mothership. Moreover, speedboats have the potential to grow bigger and run faster. Perhaps one day, they can even become the second mothership in the fleet.

But there are also downsides to this approach. Speedboats may go very fast, but they may also be irrelevant, and inconsequential in changing the fortunes of the mothership. If the mothership is sinking, having a few speedboats out there won’t be of much help. Having a few experiments might be interesting, but if they are without scale and size, they don’t move the needle.

It’s a matter of prioritization, and also a matter of sequencing. Does having a few speedboats inspire more changes? Can any of the new learnings be incorporated back into the mothership?

I think that every established corporation is facing this challenge today. The massive digitalization of customer behavior has wreaked havoc on existing business models. Across industries with large physical salesforces and assets, from insurance companies to retail chains, executives are struggling with how to leverage new direct digital models versus established salesforce and distribution networks.

Other examples include industries where there are significant new developments in products and business models. From electric vehicles to NFTs and digital assets to sustainability-fueled changes in supply chains, entire industries are under massive pressure to rethink their existing ecosystems and infrastructure.

As the waters get rockier and the winds blow harder, what should the captain of the mothership do? The answer may be that you have to launch the speedboats AND also change the course of the mothership at the same time. In many cases, launching the speedboats is a no-regret move. The fact that you have a few experiments out there gives you options to play with in the future.

Of course, there is the art of launching speedboats - some corporates have learned how to scale and succeed in the “speedboat business” much better than others. This includes putting in the right talent (far too many ventures are staffed with managers who simply are not suited to steer speedboats), giving them the right culture (you do not want the speedboat to replicate the process and culture of the mothership), installing the right controls (the speedboats by definition will need to bump around a bit and take more risks), and offering attractive incentives (you want the speedboat captain to be motivated and hungry to pursue the upside).

At the same time, the mothership needs to turn at the speed that it can manage. This requires a much more holistic strategy and a lot of leadership effort from the top. What’s interesting is how the speedboats may provide inspiration and sometimes, even competition, for the mothership. One of the unexpected benefits of launching the speedboats that I’ve seen is how having speedboats zooming around creates a sense of urgency and seeds new ideas. Some corporates second managers over to the speedboats in order to learn how to work in a more agile environment. This speeds up the overall transformation and the cultural change required at the core.

Perhaps it’s not really a debate over mothership versus speedboat. Instead, the question might be: what should the shape and size of the fleet look like? Perhaps this can include the smaller speedboats, the medium-sized barges, and even other mothership spinoffs.

Given the treacherous waters that executives find themselves navigating, they should think about whether the “fleet” they are steering today will be up to the task of tomorrow’s battles.

What do you think? How should executives think about this "mothership" versus "speedboats" approach to innovation? Please share your thoughts in the comments.