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It comes as little surprise that Tesla was named the World’s Most Innovative Company in the very first year it was eligible to be ranked. After all, Tesla’s cars defy everything we know to be true about the automobile industry. Not only has Elon Musk found a way to create a four-door car that goes from 0 to 60 in under three seconds, but that same car is also the safest car in its class, doing more damage to the crash-test machines than to the car itself. The Model S is aesthetically pleasing, but what is perhaps the most notable feature is that it is an all-electric vehicle that can run for a week on a single charge. While Tesla’s competitors have been able to produce at most, two of these features in a car simultaneously, Tesla has managed to outstrip its competition at every level, earning the Model S the award for best overall car on the market for the second year running. Because of everything Tesla has achieved, people are quick to attach the label of “disruptive innovator” to the Tesla model. And yet, academics point out that such a definition isn’t exactly true because Tesla lacks potential as a market disruptor. The Tesla product doesn’t seek “low-end, price sensitive” consumers, nor do they seek to persuade those customers who currently don’t own cars. Rather, Tesla pursues what is now called “high-end” disruption. High-end disruption is aimed at producing innovations that outperform existing products and target an industry’s most discriminating consumers. While Tesla appears to be breaking new ground here, there is precedent for high-end disruption. Starbucks’ over the top coffee drinks were able to gain a significant share of the market over cheaper, locally sourced options, while Apple overtook Sony and Panasonic as world leader in portable music players with the roll out of the Ipod. Regardless of the academic categorization of Tesla’s specific disruptive form, what people really want to know is how Tesla is able to innovate so rapidly and successfully. While horror stories of punishingly long work days and the monumental demands Musk places on his leadership team quickly arise, something else stands out about the Tesla model. Along with hiring people with a penchant for solving complex problems, Musk has implemented a “lightning fast feedback loop.” Chief designer Franz von Holzhausen says, “Our communication allows us to move incredibly fast..That is an element that isn’t happening in the rest of the automotive world. They are siloed organizations that take a long time to communicate.” While Tesla’s dominance will be difficult for the market to imitate, there do appear to be a couple takeaways for organizations who are looking to make their current model more agile. Tesla has found success by dismantling the silo model through bringing communication and collaboration to the forefront. With its "lighting fast feedback loop," Tesla can continue to improve its product by experimenting, measuring, and refining without losing any important information to organizational silos. Adopting Tesla’s model of perpetual streamlining and collaborative thinking may well put your organization on the road to consistent innovation. How does your organization ensure innovation? Do you think organizational silos are holding you back from thinking disruptively?


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