BTRIPP (btripp) wrote,

On instituting something new ...

jpriwwwdawtmfyb1I heard Jeffrey Phillips speak at a Big Frontier event last fall, after which I contacted the good folks at McGraw Hill to get a review copy of his Relentless Innovation: What Works, What Doesn’t – And What That Means For Your Business. Unfortunately, I got done reading this just when I “hit the wall” on my reviewing, and wasn't able to get caught up with it for several months (and when I did get back into writing, this had meandered off into the hands of an associate, and I only just got it back this past weekend!). For those familiar with these rambling riffs off of regulation reviewing will recognize, I'm going into that near-TMI detail to cop a plea to this not being particularly fresh in my head … and I am hoping to have your forgiveness for not producing the most razor-sharp analysis here today!

Frankly, when I got into the book, I was expecting something more of a rabble-rousing manifesto-like tome, as his presentation on it was quite energetic and focused on companies that were “relentlessly” innovating, and comparing these to those who were not. However, the book itself is much more muted and level-headed, going into a lot of analysis about what causes various businesses to manifest innovation styles all along that spectrum. So, my first impression was that I kept “waiting for it to get good”, and never quite finding the visceral “rah-rah” rollercoaster that I must have been hoping for. Of course, that's me, and the disappointment I felt was hardly the fault of Phillips or his book!

I don't usually do this, but I'm dipping into Phillips' web page for some context … who is this guy, and what does he really know about innovation? Well, he's a principal at OVO, a consultancy specializing in innovation. Here's a bit of their defining what they're about:
Every business started out as an idea. As companies grow, innovation skills rapidly become dormant. Like a limb that atrophies from lack of use, innovation skills require more engagement and constant exercise. We believe innovation must become a consistent business discipline, rather than an occasional or sporadic event initiated in response to a competitive threat.
Essentially, Relentless Innovation is a long-form expansion on that statement, textured by bringing in an anti-innovation arch-villain: “BAU”- Business As Usual (“innovation threatens BAU more than almost any other initiative”). The bastions of BAU are those in Middle Management – the c-suite may be behind an innovation, and the foot soldiers will follow whatever orders come down, but “... middle managers know they'll bear the burden of any suggested change to the model and they will have to clean up any mistakes … they are the employees most likely to rush to {the BAU's} defense.”

Phillips goes into how MBA-favorite systems, like Six Sigma and Lean, lock many businesses into models in which innovation is nearly impossible: “The business of big business is efficiency and predictability, not innovation … we have refined the operating model to the extent that innovation has become a threat to how firms operate, rather than a potential benefit.” Again, while CEOs constantly list “innovation” as one of their top 3 priorities, less than 25% of manufacturing firms and less than 8% of service firms had created new products or services within the preceding three years!

After decades of applying “shop-floor” efficiency improvement models across the entire enterprise, most businesses are ill-equipped to indulge in innovation, with executives whose expertise is down-sizing and streamlining:
In an era when predictability is the hallmark of an excellent executive … innovation's upredictability leaves executives exposed … since the compensation of many executives is tied to their stock price … surprises, even positive ones … aren't usually welcome.
The author identifies eight factors that “create an innovation BAU framework” within organizations that have been successful in their dedication to innovation:
  1. innovation metrics tied to specific goals
  2. compensation
  3. enabling functions
  4. who we manage versus what we manage
  5. communication
  6. defined processes
  7. reactive versus proactive philosophy
  8. human resources and talent management
He details examples such as Proctor & Gamble, who had a goal that 50% of ideas would originate from outside the company, despite its substantial internal R&D resources … in 2009 they had five of the top ten new product launches in the U.S., so that would appear to be paying off. Another example is that of 3M, whose goal was that “30 percent of the revenue generated in any year should come from products that are less than four years old” … causing them to “not sit on their laurels” of established moneymakers. He quotes the “VP of Innovation” at RJ Reynolds on their model of “setting fences”, things which they seek to achieve, then have the next goal already defined. Google is shown as an example of how compensation is revised to encourage follow-through on innovation which might otherwise have been threatening to the checks of those responsible for steering these projects – they get a stake in the on-going success of the products developed. Sometimes companies need to separate out the innovation, like IBM which developed an Emerging Business Organization in response to its previous failures to get new projects past their deeply-entrenched BAU cultures.

How does a corporation institute innovation in its ranks? “Few firms succeed using ad hoc or “on the fly” innovation processes”. … but Phillips details what does generally work:
A well-defined innovation process will encompass an entire “end to end” innovation capability, including these phases:
  • Trend spotting and scenario planning.
  • Gathering customer needs and market insights.
  • Generating ideas using the scenarios and needs as guideposts.
  • Evaluating, prioritizing, and selecting ideas for further development.
  • Prototyping and piloting ideas.
  • Transitioning ideas into product or service development.
  • Launching new products and services.
One counter-example given is the legendary Xerox PARC operation, which seeded much of what has become the personal computer revolution, but they “struggled to move new ideas out of the research lab and into product development.” and innovation after innovation ended up being the core of other companies' products.

Much of the book reads like a report from a consultant to a company, with a lot of “what you should do”, which makes it a bit less appealing to the “general reader” as most are not in a position to actually implement any of this. While I would have preferred to have Relentless Innovation shifted over into a more “philosophical” look at innovation, that would no doubt be less useful to the author and his firm when using it as an introduction to their services!

This has only been out for six months or so, and is likely to still be readily available through your local book vendor which handles business titles … however, the on-line big boys have it at about 1/3rd off of cover price, and the new/used guys (oddly) have “new” copies for around ¼ of cover (plus shipping, of course). Perhaps if I was in an upper executive position in a large company, this would have been a more gripping read, but while it was full of interesting stuff, it was evidently “not written for me”, and I suspect that the further the reader is from the corner offices, the less connection they'll have with this … so consider that as a caveat to my general liking of the book.

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Tags: book review
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