^[1]I’ve just received a review copy of Gerard J. Tellis’ new book called Unrelenting Innovation: How to Build a Culture for Market Dominance ^[2].

I don’t want to sound cynical here, but I can’t help but think:

“Here’s another brilliant book based on tons of research that shows that corporate culture is the critical success factor behind innovation and success and bunches of CEOs will read it and they will extoll the virtues of innovation and an innovative culture and then they will leave the meeting they are in and promptly go back to the behaviors that are familiar and comfortable and that deliver mediocre results.”

Sorry about that ridiculous run on sentence, but this is exactly what I think when I read a book like this.  Then I ask myself the question:

“Will this be the book that changes everything?”

I can’t say for sure.  You can decide for yourself.  So to help you do that, let me give you a little background.

About the Author

Gerard Tellis is a Professor of Marketing, Management and Organization, Neely Chair of American Enterprise and Director of the USC Marshall Center for Global Innovation in LA.  That introduction may sound extremely academic – and it is.  But Tellis’ writing isn’t stilted or uncomfortable.  He moves easily and effortlessly between academic research and practical real-life experiences.  In Unrelenting Innovation, Tellis balances the rigors of academic research with human nature and psychology.

Tellis became very interested in the idea of what causes innovation and why it is that some companies are just more innovative than others.  Shouldn’t the product drive innovation?  Maybe, but HP came up with the tablet concept before Apple and that never really went anywhere.

So there must be something else.  Tellis proposes that it’s a company’s culture that is the critical success factor when it comes to innovation.

The Research Behind Unrelenting Innovation

Tellis was so curious about this that he and his colleagues set out on a huge research project.  They interviewed 770 companies across 15 countries.  They searched for the origins of 90 innovations and studied the evolution of 66 new markets spanning over 100 years.  What they found was surprising.

It wasn’t the time or money invested in R&D, nor was it the number of patents, the size of the company or the country of origin that made the difference in innovation success – it was the internal culture of the firm.  Tellis learned that an innovative culture can’t simply be imposed or manufactured, rather it had to be created, instilled and nurtured.

How to Create and Nurture an Innovative Culture

There were three basic principles Tellis uncovered in his research:

1. Providing asymmetric incentives for enterprise.  To foster a culture of innovation, there has to be a freedom to fail.  Failure is a part of the innovation process and the best way to instill this in a culture is to provide RIDICULOUS rewards for success and limited penalties for failure.  This frees up the company to try new things without fearing retribution.
2. Fostering internal markets.  HP was renown for having departments that competed with each other.  When healthy competition is introduced into a corporate culture, innovation soars.
3. Empowering innovation champions.  An interesting story Tellis tells is about MP3 innovator, Tony Fadell who worked for Phillips but wasn’t able to launch his idea for the MP3 until he moved to Apple and developed the iPod.

What Can All These Big Companies Teach a Small Business About Innovation?

You might think that big companies have different circumstances than a small business.  And in some cases, that is certainly so; they have many more people and departments and complexity.  And all of those things can make it all the more difficult to incorporate some of the lessons contained in Unrelenting Innovation.

The good news for small business is that it’s easier for an organization of ten people to implement these principles than an organization of a hundred or a thousand people.

Unrelenting Innovation is a great book for anyone in a leadership position to read.  You will find yourself recognizing certain circumstances and behaviors that big companies have that you might be taking on as you grow.

Small businesses have one thing that larger companies have to work hard for; a clear and present culture.  Unrelenting Innovation will show you how to maintain the culture that you have and use it to innovate and grow.