book summary_the other side of innovation

8/7/2019 Book Summary_The other side of Innovation

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1Book Summary - Other Side of Innovation


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About the authorsVijay Govindarajan

Chris Trimble

Professor of International Business at the Tuck

School of Business.

Co-director for Global Leadership 2020.

He is a popular keynote speaker.

Aluminai of IIM Ahmedabad.

He qualified as a Chartered Accountant in India.

He was awarded the President's Gold Medal for his

outstanding performance in obtaining the first rank

An expert on making innovation happen in large

organizations.

Faculty at the Tuck School of Business at Dartmouth and

is a senior advisor at Booz & Company.

Famous for : Ten Rules for Strategic Innovators from

Idea to Execution of the Freakonomics, The Tipping Point,

and Blink fame

2Book Summary - Other Side of Innovation


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INTRODUCTION:

CONCEPTS & FUNDAMENTALSBook Summary - Other Side of Innovation 3


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Book Summary - Other Side of Innovation 4

IDEAS ARE ONLY BEGINNINGS

http://www.youtube.com/watch?v=MudaxA80eI4

(Click to see video)

Getting a group of businesspeople engaged in a Big Idea Hunt is usually easy.

Brainstorming sessions are fun! Out-of-the-box thinking is energizing! Ideation is cool!

Not only that, generating a breakthrough idea is glamorous. It wins great status. If you

come up with the brilliant idea, then you will always be associated with it.

The challenges beyond the other side is Execution. This other side is usually an

afterthought. It is humdrum. It is behind-the-scenes. It is dirty work.

INNOVATION = IDEAS

INNOVATION = IDEAS + EXECUTION
http://www.youtube.com/watch?v=MudaxA80eI4http://www.youtube.com/watch?v=MudaxA80eI4http://www.youtube.com/watch?v=MudaxA80eI4


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What are general models of Innovation

MODEL 1

INNOVATION = IDEAs + MOTIVATION

Strategy : Operate efficiently and compete

on cost.

To motivate employees, Org A cross

trained its employees and rotated them

among the plants.

Bonus = 80% to 150% based on the outputof the product.

Limited to Continuous process

Improvement.

Not possible to produce larger

innovations.

MODEL 2

INNOVATION = IDEAs + PROCESS

Strategy : Robust, Step by Step process to

launch an new product / process into the

market much ahead of competition.

Only capable of producing repeated /

improvised innovations.


MODEL 3:

INNOVATION = IDEAs + LEADERs

Common model. After finding THE great

idea, a great Leader is found to execute

assuming that the talented and

empowered leader would cross all

barriers.


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HOW DO ORGANISATIONS WORK ?

INNOVATION ONGOING OPERATIONS


ORGANISATION PERFORMANCE ENGINE

PROFIT

Efficiency

Productivity

The engine strives to make every

task, every process and every

activity as repeatable and

predictable as possible.

By definition Innovation is

neither repeatable nor

predictable. It is exactly the

opposite non routine and

uncertain.

Innovation & Ongoing Operations are always at conflict.


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ORGANISATION DISECTED


ORGANISATION

INNOVATION

=

IDEA

+

LEADER

+

TEAM

+

PLAN

MISSION, GOALS &STRATEGY

ORGANISATIONALDESIGN

POLICIES &PROCESS, ACTIVITIES

Over

emphasized

Neglected


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INNOVATION

=

IDEA

+

LEADER

TEAM

+

PLAN

+

The fundamental prescription given in this

book is that innovation initiative needs a

separate kind of a team

&special kind of a plan.

Part I : Team, Part II : Plan


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Part I

Build the Team



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Project Team = Dedicated Team + Shared Staff


Performance Engine (PE)

PARTNERSHIPDEDICATED

TEAMSHARED STAFF

Organization

MODEL FOR ORGANISING AN INNOVATION INITIATIVE


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Steps for building the project team

Divide the labor : Decide how responsibilities for

executing the initiative will be split between the

dedicated team & the shared staff.

Assemble the dedicated team : Determine who willserve on the dedicated team and how to define their

roles and responsibilities.

Manage the partnership : Establish clearexpectations for each partner & mediate the

inevitable conflicts that will arise between the two.



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Limitations of PE to execute an innovation by itself


A

Cp (A)

B

Cp(B)

A B

Performance EngineCp (PE) = Cp (A) + Cp(B)

+/- Cp (Work Rel between A&B)

Changing the Work Relationships is impossible. The same have evolved over a period

of time & because of the constant demand of the ongoing operations .

Thus if the work relationship inside the PE are inconsistent with what is needed for a

certain portion of the innovation initiative, then that portion must be assigned to the

dedicated team.

Step 1


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Assemble the dedicated team


Step 2

Organizational Memory:The concept tells that a dedicated team may start behaving like the PE since the individuals thatmake up the dedicated team have memory. Organizations have a tendency to create sub groups

that mimic what already exists, even when the conscious intent is otherwise.

Basic Principles to be kept in mind while forming the dedicated team :

Identify the skills that you need: Consider both specific skills and special skills that your dedicatedteam will need. Special skills may be individual know how, capabilities and experiences that are specific

to the organization. General skills are like creativeness, out of the box thinking, questioning

personalities. Other skills essentially that are required : 1) experience in setting up a new unit 2) the

dedicated teams senior leader should be politically savvy and skilled at building partnership.

Hire the best people

Match the organizational model to the dedicated teams job : Reporting structure, decision rights,

titles, JDs, Work processes, performance measures, compensation plans and culture. Customised to

the type of innovation initiative.


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Traps in building the dedicated team :

Having a bias for insiders. Familiarity. Comfort of working with them.

Expedience (Internal reorganizing is easier)

Compensation Norms

A desire to give attractive opportunities to your own employees. Adopting existing formal definitions of Roles and Responsibilities.

Reinforcing the dominance of Performance engine power centers.

Assessing performance based on established metrics.

Failing to create a distinct culture. Using existing processes.

Succumbing to the tyranny of Conformance.


Step 2

Building a dedicated team SHOULD be uncomfortable.


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Manage the partnership


PARTNERSHIPDEDICATED

TEAMSHARED STAFF

Challenge 1

Competition with the PEleaders for scarce resources

Challenge 2

The divided attentions of

the Shared Staff

Challenge 3

Disharmony in the

partnership.

Step 3


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Challenge 1 : Competition with the PE leaders for scarce resources

Make all formal resource allocations to an innovation initiative

through one plan and one process.

The innovation initiative should pay fully for what the shared

staff provides.

The innovation initiative should pay for resources committed,not resources actually used.

Performance score cards in the PE should, to the extent

possible, be isolated from the uncertainty of the innovation

initiative.

Discuss the contingency plans in advance.



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Winning formal resources is not enough, winning hearts

and minds of the shared staff is what is required. For the

dedicated staff, innovation initiative is everything, for the

shared staff it is one thing.

Resistance from PE is expected since it imagines thatworking on the innovation initiative will :

Weaken the existing brand, relationships with customers.

Replace the existing process, products. The incentive

compensation is at risk, or may loose their jobs.

Designing added bonuses linked to the success of the

innovation initiative would be helpful.


Challenge 2: The divided attentions of the Shared Staff


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Anticipate the specific resentments that are likely to arise, tobe alert to their presence, and go out of your way to defusethem in advance.

Practice below principles:

Make the division of responsibilities as clear as possible. Go out of the way to reinforce the common values that the

performance engine and dedicated team share.

Select insiders for the dedicated team roles that demand heavycollaboration with shared staff.

Locate the dedicated team near the critical members if the sharedstaff.

Reinforce the importance of being able to collaborate across theboundaries.


Challenge 3 : Disharmony in the partnership.

Us versus them


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Part II : PLAN


Initial plans for IIs are typically riddled with

guesswork. As a result, the competitor that

wins is rarely the one with best initial plan ; itis the one that learns the fastest.

Sorry that the project failed, boss, but, let me tell you, we learned a lot.


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Formalizing the experiment


Plan the experiment

Predict the outcomes,document supporting

logics and assumptions.

Execute experiment,record measurements,document observations

Compare predictionsand outcomes, assess

lessons learned


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Principles of planning an II :

1. Invest heavily in planning.

2. Create the plan and scorecard from scratch.

3. Discuss data and assumptions.

4. Document a clear hypothesis of record.

5. Find ways to spend a little, learn a lot.

6. Create a separate forum for discussing the results.

7. Frequently reassess the plan.

8. Analyze trends.

9. Allow formal revisions to the predictions.

10. Evaluate Innovation leaders subjectively.



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Seeking the truth : Be aware to the Biases

Overconfidence in predictions : When the results are lower than theexpectations, there can be two reasons : Poor assumptions

Poor execution (generally neglected)

The ego bias. Successful experiments : due to actions planned and executed.

Un-Successful experiments : due to external influences (badlucks)

The recency bias : making accountable recent actions.

The familiarity bias

The Size bias : belief that big outcomes are result of big actions.

The simplicity bias : fast answers to explain.

The political bias.



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10 myths about Innovation

i. Innovation is all about ideas.

ii. The great leader never fails.

iii. Effective Innovation leaders are subversives fighting the system.

iv. Everyone cannot be an Innovator.

v. Innovation happens Organically.

vi. Innovation can be embedded inside an established organization.

vii. Catalyzing Innovation requires wholesale organizational change.

viii. Innovation can happen only in skunk works.ix. Innovation is unmanageable chaos.

x. Only start ups can innovate.



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Thank you.

The book is a practical guide to managing big innovation initiative. The book

details many examples which although are not included in this summary.

The book understands innovation as breakthrough in nature and describes an

effective strategy to manage the same. Incremental innovations are much easier

and manageable by the organizations and thus might not be dealt by the authors

in details. All types of innovation are although necessary, organizations mainly

are found grappling at executing a breakthrough challenge.


book summary_the other side of innovation

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