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    Making Innovation Work

     
    http://gsbwww.uchicago.edu/news/capideas/feb05/paypals.html
    8/22/2005

    This book opens with some cheery news: “Much that is held as common wisdom regarding how successful innovation is managed is wrong.” According to the authors, innovation does not require a company-wide revolution or mystifying transformations, nor a focus on technology or a devotion to building a “creative culture.” In fact, not every company really needs a large quantity of innovation. Instead, there are a few requirements to implement a successful innovation program: specific tools, rules, and discipline; the right measurements and incentives; and the ability to integrate both business model innovation and technology innovation.

    Using real-world examples from such innovative organizations as Apple, Coca-Cola, and Vodafone, this book identifies seven rules of innovation: exert strong leadership on the innovation strategy and portfolio decisions; integrate innovation into the company's basic business mentality; align the amount and type of innovation to the company's business; manage the natural tension between creativity and value capture; neutralize organizational “antibodies”; recognize that the basic unit of innovation is a network that includes people and knowledge both inside and outside the organization; and create the right metrics and rewards for innovation.

    Innovation comes in many flavors. For example, Apple is praised for its chancy decisions to invest in the iPod and iTunes, two “semi-radical” innovations that fundamentally changed the industry. Years earlier, rival Dell also broke with the traditional PC business by honing a direct sales strategy, but Dell's change led it to focus even more on PCs, not less.

    This book largely escapes a problem with many books on innovation: their relentless reuse of case studies of companies that were once rich in innovation but lost their way, apparently with little notice from the authors. So it's refreshing to note that Making Innovation Work takes a shot at Hewlett-Packard—an innovation golden boy in dozens of titles despite years of declining performance—by opining that former CEO Carly Fiorina sowed the seeds of its downward turn by changing the company's culture away from the “HP Way.”

    We like the authoritative tone of this work, born perhaps from the experience of its trio of authors. Davila is a professor at Stanford's Graduate School of Business. Epstein was a visiting scholar at Harvard Business School and is a distinguished research professor at Rice University's Jones Graduate School of Management. Shelton is managing director of Navigant Consulting's innovation practice.

    Of the many recent books on innovation, this goes near the top of the list.

    - Sean Silverthorne

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