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Adam may be on vacation, but the rest of us can still enjoy his work. In a feature out today for Fortune, Adam profiles Silicon Valley management guru Eric Ries, who is trying to teach big companies like Procter & Gamble (PG) and General Electric (GE) to innovate like much smaller startups.
Ries is probably best known as the author of the 2011 book Lean Startup, which popularized the strategy of developing a “minimum viable product,” so companies can test a new market and “pivot” to something else if it fails. And while the book led to a busy and successful consulting practice, Ries is now concentrating on what he sees as a much bigger problem underlying many of the challenges that trip up big companies: the pressure from being a public company reporting quarterly results. Forced short-term thinking is bad for long-term success, and scares many companies away from going public in the first place, he says.
“I don’t really understand what people’s plan is if this trend continues,” Ries tells Fortune. “We’re going to wind up with, like, seven public companies that are mega-conglomerates, and everything else is private. That’s a terrible policy outcome.”
As a result, Ries has a new startup of his own, called the Long-Term Stock Exchange. The idea is to create an alternative to venues like the New York Stock Exchange and Nasdaq with different rules that would prompt companies to do the right thing. For example, quarterly earnings guidance would be forbidden and the voting power of shareholders would increase the longer they held their shares. So far, however, no takers. Changing Wall Street may require the biggest pivot of all.
