Draper CEO on Innovation: ‘Three Keys to Breakthrough Innovation’

August 26, 2017

Draper is a non-profit research and development organization in Cambridge, Mass. that develops new technologies, primarily for government customers. Among its greatest hits: the computer that guided Apollo spacecraft to the moon. Draper has 1,700 employees, and about $600 million in annual revenue. Ken Gabriel, its CEO, joined Draper in 2014 after stints at Google and the Pentagon’s Defense Advanced Research Projects Agency.

This interview is from our CEOs on Innovation report, in the Fall 2017 issue of InnoLead magazine.

InnoLead:  Draper has this amazing history, helping the Apollo project get to the moon and lots of other amazing scientific breakthroughs. How big is it? How do you describe the focus of Draper in 2017?

Ken Gabriel:  We’re about 1,700 people. Last couple of years, we’re on the order of $600 million plus in revenue.

I’d say that the principal value proposition of Draper is that we are really good at taking disparate and different technologies, and integrating them into new capabilities that are greater than the sum of the parts….

The thing that still represents 50 percent of our business here is a single contract with the Navy that goes back to the late ’50s, which has to do with the strategic guidance system for missiles that are launched from the submarines.

It’s a very challenging problem, and it’s one that requires both that system level of integration, but also a deep understanding of each of the component technologies. Obviously, the underlying technologies have changed. Electronics has changed, the ability to build certain types of gyroscopes have changed.

Managing Engineers & Scientists

IL:  This is going to be a really big question. You have 1,700 really smart people who want to work on really challenging problems. How do you think as a CEO about managing engineers, R&D people, who in many cases would be happy working on a [project] for 20 years — “just don’t bother me. I’m not so interested in creating any business value, but I just love exploring new stuff.”

Gabriel: There is a role for, and a place for, people who say, “I don’t want to be bothered about the end application. I’m just intrigued by the cool science.” There are people who really want to do that… [and] there is a place for it. You’re almost taught when you’re a scientist or an engineer that somehow, the further away you are from an application, the closer you are to god.

IL:  Yeah, the more serious of a scientist you are.

Draper CEO Ken Gabriel, who previously worked for Motorola, DARPA, and Bell Labs.

Gabriel:  I think that’s bunk. Again, I’m not saying that people who are supported to think deep thoughts about certain areas aren’t valuable, but it’s bunk to think that if you’re not constrained by return, or impact, or profitability, that somehow you’re going to come up with better ideas.

I actually think, and this is my experience with Akustica, my start-up, the thousand and one challenges that came with going from, “Hey, I built one of these in a university lab,” to shipping six million [MEMS microphones] to customers ranging from HP to Apple, there was a lot of really difficult problems that had to be solved, a lot of innovations and ideas that were just as creative…as anything you might have thought up in an office with pencil and paper.

That kind of thinking I think is part of what a CEO needs to articulate, why that’s important. I think if you scratch at people, fundamentally, at the end of the day, most people want to make a difference.

No one wants to come to work and not have anybody care about the work that they do. Whether it’s solving a problem for a customer, solving a problem for a federal agency sponsor, people want to make a difference.

IL:  Let’s talk a little bit about what you’ve learned of managing these people who often…can be really forceful in advocating for why we need to do this technical route, versus that technical route.

Gabriel: …One of the things that I’ve learned and experienced with scars on my back is I know how to help you if you’ve got an idea, if you believe in something passionately, get rid of the stuff that doesn’t matter.

IL:  Tell me about that.

Gabriel: I’ll give you two examples of how to do that, one that I’ve done and one that I’m going to draw from DARPA’s past.

DARPA developed stealth technology in the ’70s. It was highly-classified. The principal key enabling capability of stealth was creating materials that you would put on the surface of aircraft that would reduce the radar signature. A big aircraft looks like a bird. You weren’t invisible. You just look like a bird. It’s very much smaller.

Here’s the difference between what DARPA did and what others might have done. A typical development project elsewhere might be [that] the scientists will build you a [tiny] patch of [material] and say, “I’m done. I created this piece of material. I’ve subjected it to some radar, and look at the signature. It’s done. You should be able to build an aircraft.”

But [that’s] a huge leap in a big organization. What did DARPA do? It was a classified program at the time, called Have Blue.

Have Blue [involved] building a jet, making enough of this material to cover that jet, and flying it against existing known anti-aircraft radar to demonstrate that the signature was much lower.

Now, here’s what I mean by getting rid of stuff that doesn’t matter. The Have Blue had a shitty cockpit. There wasn’t much there besides a stick and a couple of buttons… That was it. They didn’t worry about building extra fuel tanks or what kind of load distribution is going to be on the wings.

They just wanted to build enough of a thing that looked like an aircraft, that flew at the appropriate speeds, and get rid of everything else that doesn’t matter [to] test it against an actual anti-aircraft radar system, not a fake one, not in a lab… Just strip away everything except demonstrating that end-to-end capability.

That’s extremely powerful. That’s extremely focusing. That’s why DARPA has historically and consistently done breakthrough innovation after breakthrough innovation that looks seemingly impossible.

Fewer Projects, More Resources, Less Frequent Check-Ins

Fast forward to here. How have I brought that learning to the work that we do here? We have an ethic here of spending 10 percent of our internal revenue dollars, minus subcontracting dollars, on independent research and development — just what we believe we need to do to advance our capabilities, our own internal technologies.

When I got here, [there were] 177 projects, all subcritical funding, and one year in duration. You’re not going to get anything out of [that approach] that’s significant. I said, we’re going to scrap that. Instead, we’re going to start about half a dozen a year, no more than about a dozen at any one time, multi-year, multi-million-dollar projects that are going to be bold, that are going to be really out there, but they’re going to be driven by a capability.

I’m not interested in technology for technology’s sake. There has to be a bold, interesting capability that develops as a result of this.

IL:  That’s interesting. A lot of people say, “Oh, you want to take lots of shots on goal and fail fast, fast cheap. Give people $50,000 to play with.” You’re saying fewer shots on goal, more resources.

Gabriel:  Yeah. One of the early ones was a very interesting one. We do some work with deep brain stimulation and ultra-miniature electrodes with embedded signal processing, both stimulating and recording electrodes, for prosthetics and deep brain stimulation.

IL:  Deep brain stimulation is generally for various neurodegenerative diseases.

Gabriel: Exactly, like Alzheimer’s or traumatic brain injury or other things. We have partners at Massachusetts General Hospital and elsewhere… But we’re the engineering guys who do the engineering part of it.

But most electrodes, as you know, are relatively large, tethered, they have to be wired back [to a device outside the body.]

This person who was part of [our] team wanted to show a very bold thing, which was electrodes that you could inject, and that could be wirelessly stimulated and interrogated… And, by changing the frequency of your stimulating source, you could individually address different [electrodes in the body.]

So very aggressive, very bold. It was clear was success looked like. Off you go, here’s the initial tranche [of funding.] You’ve gotten this multi-year, multi-million-dollar project to do injectable electrodes.

One of the other ethics of the [these projects] is a light touch. Go, you know what the rules are, we’ve decided what the objectives and agreement are, here’s the funding. We’ll check in with you in six months. We don’t check every single month, but we don’t also just let you go wild for a year.

IL:  There’s some kind of progress report.

Gabriel: There’s a progress report where you give an update on, “This is what I told you we were going to do, this is where we’re going.”

They’re encouraged to say, “You know what? Six months in, something which I thought was going to be is really easy, I haven’t made any progress on. I’m shifting resources. I’m going to put more of it on this tough thing and take away from the thing that’s easy.”

Very early in the project, they were getting wrapped up with the miniaturization of the device, that ultimately, they had to get to something really small that could be injectable.

There were these various attempts to show that the stimulator was too weak or the recorder wasn’t recording enough…I finally told them, “You guys are getting caught up in the weeds, and you’re worrying about a feature which may or may not be important…”

This is another generic rule that I think has been very valuable: As quickly as you can, do an end-to-end demonstration. Don’t worry if something ugly is sticking out here, and something is not quite done here. Because in the course of doing end-to-end, you’ll get a lot more visibility into what’s important and what’s not important.

‘There’s No Sense of Urgency’ in Large Organizations

IL:  That’s an example of [a program at Draper] where you felt like it had too few resources for each project, and you wanted to dial up the resources. Can you get to that idea that you touched on, that most big companies are so resource-rich that it can sometimes hamper their ability to innovate?

Gabriel: Opportunities are fragile and fleeting. What I mean by that is, let’s say you’ve got an idea for something new. The market may be right for it. Your idea’s great. You have the resources, but most big companies generally don’t do “urgent” well…

Start-ups, they’ve only got one thing to focus on, so usually [speed is] their biggest advantage. They don’t have to worry about legacy systems. They don’t have to check with 17 levels of bureaucracy.IL:  Right. We only have a year of cash, so we need to do something in a year.

Gabriel: I started out my career in a big company. There’s no sense of urgency. You get it done this week or next week, doesn’t matter.

But here’s the corrosive thing about that. I’m going to exaggerate for effect. “Well, I didn’t get this contract signed because I’m trying to get material from this start-up,” or, “I’m trying to get some external resource. Contracting held it up. Legal held it up for two weeks.” Now, instead of getting it done today, it’s not done for two or three weeks.

By the time you get that contract out to the company, they’ve shipped the stuff [to another customer] and they have another month before they can build enough stuff to ship it to you. Now the one day turned into three weeks turned into seven weeks.

Seven weeks go by, you get the material. The equipment you were going to test it on is now being used by somebody else, so that introduces another delay.

Now, three months have gone by, one of your team members just got snatched up by Facebook. They’re gone. Now I need to replace that expertise, so I’ve got to put in a req for HR and begin the recruiting process and hiring.

You can easily see the lack of urgency. You’ve lost six months, or potentially even lost the opportunity.

IL:  Is that a fundamental truth of big companies? If I took you and somehow recruited you to a 10,000-person, publicly-traded company, knowing what you know, could you as CEO impact that?

Gabriel: Absolutely, because interestingly enough, I did that experiment.

We tried to set up [a skunkworks called ATAP, the Advanced Technology and Projects group] inside of Google. … Google was a very good company to work for, but they were big. They’re big and they’re bureaucratic.

For all the good reasons, they have very careful contracting procedures, very careful P.O. procedures. …We were inside of Motorola, but Motorola was a Google company at the time.

The CEO had a really important role in clearing those sort of obstacles and saying, “This group has the authority for the right reasons — not just because they’re a bunch of brats — to bypass normal hiring, normal contracting, normal NDA, normal outsourcing procedures.”

‘Give People the resources and remove the obstacles’

…That’s the most important thing that a CEO or any leader can do — give people the resources and remove the obstacles. That’s my fundamental job. I advise as needed, but my two most important jobs are finding the people I need to resource and removing the obstacles.

A good example of removing the obstacles [is that when I arrived,] I said, “We’re going to have multi-year multi-million-dollar [internal R&D projects], and we’re going to check in every six months…”

Engineering management here started sending out notices to all the people who [were workingon] IRADs and said, “I want weekly updates.”

IL:  177 projects, everyone having a weekly update. That’s a lot of updates.

Gabriel: That’s a lot of updates. …Here was their concern. “Wow, the CEO is giving this money, and has attention on these six projects. We need to deliver, so if we said we’re going to deliver X, Y, and Z as an initial plan, by golly, we’re going to deliver X, Y, and Z.”

I said, “Time out. The people running these projects have the authority to redirect where they’re going. I don’t want some communist five-year plan [to have us] shipping tractors whether I need them or not. If [they’re] three weeks into the project, and the original thing they’re going to tell me that they’re going to deliver in six months doesn’t make sense, [then] change it.”

Three Keys to Fostering Breakthrough Innovation

IL:  I haven’t met a lot of people like you who have worked at Bell Labs and DARPA, Motorola, Google, now Draper.

A lot of companies will look at any of those organizations and say, “Those are truly innovative places. They have large budgets to spend on R&D.”

They say, “We’re a public company. The Street won’t let us invest in innovation.”

Gabriel: To me, there are three elements of improving the likelihood of getting a breakthrough innovation. They are counterintuitive.

One is you have to go out and get the best technical leadership that you can, but technical leadership that also knows how to manage a program, execute financially, stay to a schedule, make those tough trade-offs and decisions that we talked about as a project evolves. You have to invest that person with the authority.

Now, here’s where the counterintuitive stuff that comes in. You should make them fixed-duration projects, and everybody should know when that project is going to end.

One of the things that I like to tell people that most people don’t know [is that] if you visit DARPA, look at people’s badges. On the bottom of the badge is their expiration date, so everybody knows there’s a fixed amount of time for you to be here.

When we implemented the DARPA-like model at Google ATAP [the company’s Advanced Technology and Projects Group], this was one of the friction points with Google mothership. We hired people in as leads of these various projects. We had about a dozen [projects] in steady state. We told them, “You’re coming here for two years to lead this project. At the end of which, you can leave, go somewhere else. You can go to another part of Google.”

The reason that’s important is it creates a natural sense of urgency that may not be there in a big company. Because if you’re doing the thing that you’ve been passionate about, that you’ve cared about all your life, nobody is giving you the time of day, nobody’s giving you the resources.

Finally, you get the chance to execute it. You’re the principal investigator. You’re the leader for this effort, [with] multi-millions of dollars over two years.

Guess what? You’re not going to let a contracting office get in your way. You’re not going to let hiring get in your way. You’re going to be banging on people, because if you’ve only got two years to do it, one week is one percent of your time.

You’re not going to let three weeks go by for a contract order to go out or a PO to go out. You create a natural sense of urgency that improves the likelihood of success.

The third element is don’t try to do everything internally. …It goes back to that speed thing. If you’ve got two years, guess what? You’re not going to wait three months for a search to bring in expertise when you can go out and, in a week, secure a subcontract to someone to do work for you.

They’ve got the expertise. They’ve got the equipment. I don’t need to bring it in. You tend to create a relatively small team and not a big mass. This is what tends to happen with big companies. They tend to worry about, “I’ve got to own all the IP.”

What they forget is the risk of not moving fast enough. Then, when they decide to shut down this program, they say, “Shoot, we’ve got 150 people here as full-time employees. What are we going to do with them?”

They either have this not-so-great firing of everybody, or they try to shuffle them around and get them working on other projects.

Influencing the Culture

IL:  When you came here, did you feel like you needed to do anything to change the culture of the place? Or did you feel like, “Look, the culture is great. It is going to be what it is.”

Gabriel: The culture’s a really important thing.

As I said, 50 percent of our business is with one contract, which is we’re the prime [contractor] on the guidance systems that go into every missile that go into every boat that goes out to the fleet…

We’re [are responsible for] fielding and servicing and refurbishing the [guidance] units. That culture, obviously, you don’t mess with it. You don’t snap your fingers and have an idea like, “Oh, I can replace the mechanical gyros with fiber optic gyros. Let’s just do that.” No, you’re not allowed to do that.

There’s very careful processes, quality control, quality assurance, lots of testing, sign off, and approvals because you don’t want to mess with that…

Because it was 50 percent of our business and many people contribute to this program at various points…that understandable conservatism and carefulness and assurance and long lead times for any changes leaked out into the rest of the culture.

I found it being applied in places that it didn’t make sense.

‘I Don’t Want to Encourage Failure’

IL:  You may want to be a little bit more like cowboys in a particular area, the injectable electrode idea you talked about.

Gabriel: That’s right. Are any body parts going to fall off? Is anybody going to get hurt? Are we going to lose business, are we going to get bad press? No. Take the risk!

There was a real fear of failure. One of the things that is important about changing the culture is to change that. I don’t want to encourage failure. I want to encourage people not to fear failure.

That involved a culture change in the other [50 percent of our business.] Again, cherishing and protecting the part that does not need to change, but the other 50 percent of our business, we didn’t necessarily need to be that way. …If you want to do big, bold things, they’re risky.

It’s funny. I had to almost remind the organization that when Draper took on the Apollo guidance computer [project], nobody had ever navigated off the surface of the Earth. We didn’t know how to do that. Nobody knew how to do that.

There was a lot of risk. There were lots of things that we just had to learn and do and fail and stub our toes on, but it was worth it to do that, because we wound up doing things that nobody else had ever done, [which] took twelve humans to the moon and back.

Why do people come to Draper instead of Facebook or Google or anywhere else? It’s because they get an opportunity to do something — have an impact — that they can’t do anywhere else.