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Nilofer Merchant’s Required Reading

Ted Kinni

Theodore Kinni is a contributing editor of strategy+business. He also blogs at Reading, Writing re: Management

 

 

 

 

Nilofer Merchant knows something about value creation. By her reckoning, she has had a hand in launching more than 100 products that have netted a combined US$18 billion in sales — first in stints at Apple and Autodesk, and later as an advisor to technology companies such as Logitech, Symantec, and HP.

Rather than focusing on processes and tools, Merchant sees the humanist values of diversity, inclusivity, and collaboration as the keys to creating corporate value. “It’s not that everyone will but that anyone can contribute,” she says.

Her two books reiterate the message. In The New How: Creating Business Solutions through Collaborative Strategy (O’Reilly Media, 2010), Merchant traces the difficulties that many companies encounter in executing strategy to the conventional top-down approach to strategy formulation. She argues for a more inclusive approach to strategy-making that enlists the people responsible for executing it. In 11 Rules for Creating Value in the #SocialEra (Harvard Business Press, 2012), Merchant contends that social technologies and tools have given rise to a new era in which the basis for value creation is collaboration and co-creation by communities of people who are united by an aspirational purpose.

Named to the Thinkers50 list in 2015, Merchant is also a fellow at the Martin Prosperity Institute, where she is exploring the implications of “onlyness” on the future of democratic capitalism. “Each of us is standing in a spot that no one else occupies,” she says. “This individual onlyness is the fuel of vast creativity, innovations, and adaptability.”

I asked Merchant for a short list of the best reads on value creation. She called out the following three books and a seminal article on organizational learning.

“Despite having information up the wazoo, most companies struggle to innovate and create new value.”

Where Good Ideas Come From: The Natural History of Innovation, by Steven Johnson (Riverhead, 2010). “Johnson identifies the key principles that drive creativity — things like the connected ‘hive mind’ is smarter than the lone thinker; where you think matters just as much as what you think; and the best ideas come from building on the ideas and inventions of others. I recommend his book to leaders to counter any erroneous notions they might have regarding from where and from whom new ideas come. Too often, leaders expect creative thinking and new ideas to come from only a few, duly appointed employees. Instead, they need to know that ideas can and do (and should) come from everyone and everywhere — even outside their corporate perimeters. When we open up our mental apertures to receive new ideas from anyone and from anywhere, we fuel value creation.”

The Change Masters: Innovation and Entrepreneurship in the American Corporation, by Rosabeth Moss Kanter (Simon & Schuster, 1983). “Harvard professor Rosabeth Moss Kanter’s book about the unwritten rules of what actually fuels growth — the ability to create change — is epic. No idea becomes real without changes to the status quo. And anyone who wants to change the status quo needs to learn how to go against the grain without getting shredded in the process. Kanter’s book describes how people react and respond to new ideas and the change agents who promote them, and how change agents can use that knowledge to realize the world they want to create. My copy is dog-eared from nearly 30 years of reading and re-reading.”

Double Loop Learning in Organizations,” by Chris Argyris, Harvard Business Review, Sept. 1977. “Despite having information up the wazoo, most companies struggle to innovate and create new value. And my experience suggests that internal surveys at these companies would reveal that their ability to get new things done is declining over time, rather than improving. That’s not because they are suffering from a lack of new ideas; it’s because they can’t reinvent themselves — think Kodak and Xerox. As the late, great organizational development expert Chris Argyris put it, they don’t know how to unlearn enough to create new value. I regularly hand out his classic article on double loop learning. Nearly 40 years after it was published, it remains the clearest articulation of how companies can create new value through a continual cycle of learning and unlearning.”

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, by Alexander Osterwalder and Yves Pigneur (Wiley, 2010). “The other day, an entrepreneur came to me. She was thinking big, but she hadn't given a thought to what her company would need to do to transform big thinking into real value. You create value by lining up the pieces of a complex puzzle: whom do you serve, with what, and how do you reach them. Big becomes real when you figure out what your company needs to do on Day One — and 31, and 61, and 91. Osterwalder’s book, illustrated by Yves Pigneur, is indispensable because it provides a repeatable methodology for doing that work.”

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Nilofer Merchant’s Required Reading