book summary_the other side of innovation
TRANSCRIPT
-
8/7/2019 Book Summary_The other side of Innovation
1/25
1Book Summary - Other Side of Innovation
-
8/7/2019 Book Summary_The other side of Innovation
2/25
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
-
8/7/2019 Book Summary_The other side of Innovation
3/25
INTRODUCTION:
CONCEPTS & FUNDAMENTALSBook Summary - Other Side of Innovation 3
-
8/7/2019 Book Summary_The other side of Innovation
4/25
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 -
8/7/2019 Book Summary_The other side of Innovation
5/25
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.
Book Summary - Other Side of Innovation 5
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.
-
8/7/2019 Book Summary_The other side of Innovation
6/25
HOW DO ORGANISATIONS WORK ?
INNOVATION ONGOING OPERATIONS
Book Summary - Other Side of Innovation 6
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.
-
8/7/2019 Book Summary_The other side of Innovation
7/25
ORGANISATION DISECTED
Book Summary - Other Side of Innovation 7
ORGANISATION
INNOVATION
=
IDEA
+
LEADER
+
TEAM
+
PLAN
MISSION, GOALS &STRATEGY
ORGANISATIONALDESIGN
POLICIES &PROCESS, ACTIVITIES
Over
emphasized
Neglected
-
8/7/2019 Book Summary_The other side of Innovation
8/25
Book Summary - Other Side of Innovation 8
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
-
8/7/2019 Book Summary_The other side of Innovation
9/25
Part I
Build the Team
Book Summary - Other Side of Innovation 9
-
8/7/2019 Book Summary_The other side of Innovation
10/25
Project Team = Dedicated Team + Shared Staff
Book Summary - Other Side of Innovation 10
Performance Engine (PE)
PARTNERSHIPDEDICATED
TEAMSHARED STAFF
Organization
MODEL FOR ORGANISING AN INNOVATION INITIATIVE
-
8/7/2019 Book Summary_The other side of Innovation
11/25
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.
Book Summary - Other Side of Innovation 11
-
8/7/2019 Book Summary_The other side of Innovation
12/25
Limitations of PE to execute an innovation by itself
Book Summary - Other Side of Innovation 12
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
-
8/7/2019 Book Summary_The other side of Innovation
13/25
Assemble the dedicated team
Book Summary - Other Side of Innovation 13
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.
-
8/7/2019 Book Summary_The other side of Innovation
14/25
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.
Book Summary - Other Side of Innovation 14
Step 2
Building a dedicated team SHOULD be uncomfortable.
-
8/7/2019 Book Summary_The other side of Innovation
15/25
Manage the partnership
Book Summary - Other Side of Innovation 15
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
-
8/7/2019 Book Summary_The other side of Innovation
16/25
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.
Book Summary - Other Side of Innovation 16
-
8/7/2019 Book Summary_The other side of Innovation
17/25
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.
Book Summary - Other Side of Innovation 17
Challenge 2: The divided attentions of the Shared Staff
-
8/7/2019 Book Summary_The other side of Innovation
18/25
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.
Book Summary - Other Side of Innovation 18
Challenge 3 : Disharmony in the partnership.
Us versus them
-
8/7/2019 Book Summary_The other side of Innovation
19/25
Part II : PLAN
Book Summary - Other Side of Innovation 19
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.
-
8/7/2019 Book Summary_The other side of Innovation
20/25
Formalizing the experiment
Book Summary - Other Side of Innovation 20
Plan the experiment
Predict the outcomes,document supporting
logics and assumptions.
Execute experiment,record measurements,document observations
Compare predictionsand outcomes, assess
lessons learned
-
8/7/2019 Book Summary_The other side of Innovation
21/25
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.
Book Summary - Other Side of Innovation 21
-
8/7/2019 Book Summary_The other side of Innovation
22/25
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.
Book Summary - Other Side of Innovation 22
-
8/7/2019 Book Summary_The other side of Innovation
23/25
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.
Book Summary - Other Side of Innovation 23
-
8/7/2019 Book Summary_The other side of Innovation
24/25
Book Summary - Other Side of Innovation 24
-
8/7/2019 Book Summary_The other side of Innovation
25/25
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 - Other Side of Innovation 25