Tony Davila, Marc J.
Epstein, and Robert Shelton Wharton Business School Publishing, Upper Saddle River, New Jersey;
2006; ISBN 0-13-149786-3; 334 pp.
Wharton Business School Publishing, Upper Saddle River, New Jersey; 2006; ISBN 0-13-149786-3; 334 pp.
Reviewed by John D. Trudel
This book is about the business side of innovation. I was favorably impressed, to where I put together a seminar linking this work to my own past writings and tested it on selected top managers.
I thought there would be high interest in the topic, given all the talk in the business and popular press about innovation. What I discovered instead is that managers are not willing to invest for much beyond motivational talks (e.g., people with capes in superhero costumes labeled “Innovation Man”) and finding simple rules for how to pick the winners and losers. That’s not the topic of this book. I expect the authors would say, “Innovation doesn’t work that way.” So would I.
Rather the book starts with two key ideas: 1) Innovation is a necessary ingredient for sustained success, and 2) Innovation is an integral part of the business. (pg. xx) If you don’t accept these precepts this isn’t the book for you. You have to believe innovation is a survival issue and be willing to do the work required. Not all CEOs meet these criteria.
It’s not that top managers object to having compelling, high-margin products; it’s that the word “innovation” has been so over-hyped. The subject, as Andy Grove says, “Is so much easier to talk about than to do.” Hard work isn’t as sexy as creativity seminars, making deals, and hoping to win the lottery by doing the next iPod or whatever.
Anyone who’s been successful at innovation can tell you it’s a messy, difficult process. If you accept that, the next question, if you’re a business, is how to manage it.
The first decision is “Who?” and the correct answer is that two levels of management are needed. Top management must set goals, provide support, and monitor progress, but people lower in the organization must be empowered to implement. Senior executives should be involved in setting policy, goals, and strategy, but they should not be intimately involved in designing and operating the elements of innovation. This is a tricky balance. (pg. xxv)
A fashionable topic today is outsourcing, but the book says this is the wrong question to ask. Innovation is simply too important to outsource completely. If you outsource it, you turn your firm’s future over to outsiders. Conversely, if you try to do it all yourself you will greatly increase your risk of failure. In general, success requires perspectives, expertise, and experience from outside your firm. The book argues that the best solution is partial outsourcing, better called partnering. (pp. 100-115)
Bluntly put, innovation is a voyage of discovery where experienced guides and explorers can be helpful. The rewards are great, but setbacks and mistakes are to be expected, as is “organizational resistance” to new things. It’s a difficult art, and, if you don’t tap the right outside viewpoints and expertise, a hard slog.
Finally, we get to the issues of metrics and culture. Innovation is not like a quality initiative where the whole firm is involved all the time. You want the right people involved, and no more. Small, nimble, and focused is better than large, ponderous, and inexorable.
Metrics turn out to be a large part of the problem. Regardless of what management says, what it does matters more. (pp. 25-28)
If your metric is Earnings per Share (EPS), it’s not related to innovation, and, in fact, possibly contra-productive. If your metric is number of products launched, you will at best get small incremental innovations, and, at worst, old products with new names. If you view new products as “R&D’s job” you may get powerful ideas, but will be unlikely to have them fit with what your business units can produce, market, or care about. Few animals will raise the young of a different species; most will kill them.
In short, if your top management views innovation as a corporate survival issue and is willing to invest and do the hard work, this book will be helpful. But if you are looking for motivation, quick fixes, and cost savings, it isn’t for you. I expect it will appeal to only perhaps 10-20% of CEOs, but some of these will be the leaders of tomorrow’s stellar firms.
Andy Grove is right. In the end, it gets down to doing, not talking.
What’s your experience with innovation? Are CEOs and managers willing to do the hard work? Submit your case study on how innovation got or didn't get traction to Janice Scanlan CMC, FIMC.
About the Reviewer John D. Trudel CMC
(503/538-1169) helps firms with
innovation, business creation, planning, and renewal.
For newsletters and more information about innovation, visit his website.
Copyright 2007, Traction. You are encouraged to pass on so long as attribution is given to Traction.