The book Service Innovation by Lance Bettencourt has a great quote on innovation: “Innovation…needs and deserves to be treated like the business process it is.” (click here for review). Okay, I agree, you say, but how do I act on those beliefs for a new product? While many books about innovation focus on service or products, few examine the management of development teams and organizations exclusively.
Methodical counsel awaits you in The Other Side of Innovation: Solving the Execution Challenge by Vijay Govindarajan and Chris Trimble, two faculty professors of the Tuck School of Business at Dartmouth University. Based on years of research, the authors provide the best practices to proceed on a product or service breakthrough that can satisfy customers and grow your business.
I learned about the book through a preview from Harvard Business Review, so I asked for a review copy.
To be groundbreaking, rely on a dedicated team to break that ground
The Other Side of Innovation asserts a key premise of balance between ongoing activity and strategic needs. Companies are “Performance Engines,” entities pressured to deliver profits. A side effect of such pressures, which “shape and mold companies as they mature,” can be a reduced capacity for accomplishing some innovative projects. When considering a development project, many businesses seek an outside consultant, but adding any kind of agent without specific organizational support typically leads to a failed project. Forget seeking a business messiah for your ingenuity effort — “One person against ‘the system’ is an extraordinarily bad bet.”
From their research, the authors overall recommend establishing a Dedicated Team with unique practices and metrics, then maintaining a balanced collaborative relationship between the team and various stakeholders from the Performance Engine. The separation is meant to overcome the inertia brought about by a company’s focus on daily operations and profit-creating activity.
“A dedicated team’s purpose…is not to overcome organizational memory. It is to execute part of the innovation initiative. To do so, the Dedicated Team needs both insiders and outsiders, and it needs a healthy partnership with the Performance Engine.”
In attempting an innovation program, many companies make one of several mistakes, which can include:
- Bias for Insiders (those who work in the Performance Engine)
- Adopting Existing Formal Definition of Roles and Responsibilities (instead of adopting roles to fit the innovation)
- Assessing Performance Based on Established Metrics (instead of measuring success or failure by trends)
More oversights are listed, though the points may feel a little repetitive when taken altogether. Nevertheless, they emphasize the struggle to treat innovation properly throughout a development process. Govindarajan and Trimble offer success stories from well-known corporations, including Timberland, BMW, Nucor and Harley Davidson. Each case shows clear results and takeaways that avoid critical mistakes. The Dow Jones, for example, incorporated a dedicated team with Internet publishing experience, resulting in a 9 percent increase in subscriptions, “the biggest one-year jump in a quarter century.”
Some prescribed practices include:
- Invest heavily in planning
- Create the innovation plan and scorecard from scratch (as opposed to measuring success from existing Performance Engine processes)
- Find ways to spend a little and learn a lot
- Evaluate leaders subjectively, not just on results
Govindarajan and Trimble also emphasize a shared understanding of objectives to develop solutions. A clear hypothesis and recording, covered in the chapter Break Down the Hypothesis, enables that understanding so that efforts remain centered on planning and associated tasks.
“Quick learning is most likely when there is a clear hypothesis of record that everyone involved in evaluating the initiatives shares and uses as a frame of reference in any discussion of the initiative’s progress.”
In short, ensure everyone is one the same page.
Better yet, make sure the page is not solely a table or chart. Readers, particularly analytics professionals, will appreciate the authors’ caution about over-reliance on a spreadsheet to engage other team members.
“Too often, we see extraordinary efforts to build the perfect spreadsheet to prove the case for investment. We’d like to shift much of the effort that goes into perfecting the spreadsheet models to improving conversations about the underlying assumptions.”
Read The Other Side of Innovation if you have a team but no charismatic leader
The aforementioned approaches contrast with ideas from companies headed by a definitive passionate leader, such as that suggested in the book Innovation Secrets of Steve Jobs (see Small Business Trends review here). I feel books like The Other Side of Innovation speak to companies that do not have that business “Neo,” that mythical groundbreaker who has “the vision.” Many businesses face the challenge of arranging a team (and even the Steve Jobses of the world know how difficult it can be), so this book speaks to that moment rather than the romanticized myth of a modern-day Henry Ford or Bill Gates in a fledgling stage.
The suggestions may not appear immediately applicable for small business operations or for solopreneurs in the aforementioned fledgling stage. But small businesses and budding firms can still benefit, realizing that a dedicated time and effort to develop new methods is essential and that similar pitfalls can happen. The authors’ tips on identifying stakeholders and establishing a planning process can be re-imagined when working with remote team members or groups in a temporary setting. An assessment tool table and common innovation myths bring a thoughtful closure to the book.
Plan your revolutionary measures wisely from the start
Seth Godin once commented that to be a great client you must realize “your job is to foster innovation…. Fostering innovation is a discipline, a profession in fact. It involves making difficult choices and causing important things to get shipped out the door.”
If you read The Other Side of Innovation, your odds of accommodating your new methods to service customers better and ultimately improve profitability will be much greater.