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Published: November 25, 2008

 
 

Best Business Books 2008: Innovation

Also, companies should learn to think big. Grabbing Lightning makes a critical distinction between ordinary in­novation, which has been characterized by others as incremental or sustaining innovation, and breakthrough innovation, game-changing advances that alter the market and the fortunes of the company that creates them. The ability to produce breakthrough innovation is “the next major management capability large companies will claim as their priority,” the authors predict, “much like the quality effort was claimed in the 1980s.”

Many large organizations — not just IBM, GE, and Hewlett-Packard — are indeed moving in this direction, naming chief innovation officers, for example, or unveiling intriguing incubation strategies to foster worthy (and often risky) ideas. What should the leaders of these large organizations be doing? According to the authors, they should not be building skunkworks where geniuses eat junk food in splendid isolation, 24/7. Nor should they be depending on a lone, authority-bucking visionary who has an IQ of 200 but doesn’t understand the word “no,” or a dedicated internal venture group that has never seen an idea it didn’t want to grab and spin off. And most important, they shouldn’t sink a fortune into research and development. “We found no relationship between R&D expenditures as a percentage of sales and innovativeness,” the authors report, much to this reader’s surprise. (For more on innovation spending and effectiveness, see “Beyond Borders: The Global Innovation 1000,” by Barry Jaruzelski and Kevin Dehoff, s+b, Winter 2008.)

The secrets to breakthrough innovation, the authors advise, are more mundane: Build a permanent capacity for it within your organization and assign this challenge to a new, independent division so as to distinguish it from new product development. Organize the process in a way that can consistently nurture and deliver big ideas — in the authors’ conception, a “DNA” system of Discovery, iNcubation (yes, they took liberties with the N), and Acceleration into the marketplace. Also, don’t cut funding in a tough fiscal year, no matter how tempting the idea may be. Breakthrough innovations take a long time, so it’s best not to operate under the illusion that it is going to be easy. The authors admit that “the shape of the ultimate market is usually unclear; which applications will gain market acceptance most quickly and fully is generally unknown, and the path forward is, in many cases, difficult to visualize.”

This book may be a good tool in diminishing such uncertainties. The chapters on the incubation and acceleration of breakthrough technologies, in particular, offer a range of insights on how to overcome the difficulties of the commercialization process. A quibble is that Grabbing Lightning could be more compact; some of the chapters mutate into subsections and sub-subsections that can cause readers to lose their bearings. Still, the book is noteworthy for two reasons: the care with which the authors have created a road map for boosting the innovative capacity of big business, and their daring suggestion that an era of corporate-driven breakthroughs is at hand. The train is now leaving the station, they seem to be saying. Time to get on board.

Reaching Out
One of the more intriguing details within Grabbing Lightning is that all of the large companies in the authors’ study group now make use of the open innovation model — that is, they willingly look beyond their own organization for the best ideas, opportunities, and partners. A few years ago, academic and writer Henry Chesbrough coined the term open innovation in a book of the same name. Don Tapscott and Anthony D. Williams’s Wikinomics: How Mass Collaboration Changes Everything further explores the concept by considering how today’s vast communications networks can support open innovation. Another way to say this is that the Internet, and especially the newest iterations of the Web (often termed Web 2.0), have permanently altered the process and potential of innovation.

 
 
 
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