Making Innovation Work: How to Manage it, Measure it, and Profit from it [Hardcover]

"Innovation, like many [other] business functions, is as management process that requires specific tools, rules and discipline -- it is not mysterious."

"Innovation requires [accurate] measurement and [generous] rewards to deliver sustained, high yield."

"Companies can use innovation to redefine an industry by employing combinations of business model innovation and technology innovation."

It is impossible to exaggerate the importance of these three separate but interdependent perspectives when attempting (struggling?) to determine how to manage, measure, and profit from innovation. The co-authors have obviously done some innovative thinking about innovation, especially in terms of its practical applications. The most valuable business books tend to be those whose narrative is driven by a question. In Jim Collins' Good to Great, "How can a good company become a great company?" In Jason Jennings' Think Big, Act Small, "What traits do America's best performing companies share?" In this book, the co-authors seem to be primarily interested in answering two questions: "Why is innovation a necessary ingredient for sustained success?" and "Why is innovation an integral part of [any] business?" When responding to these two questions from the three aforementioned perspectives, they reveal the most effective strategies and tactics for managing, measuring, and profiting from innovation.

There is overwhelming evidence that almost all process simplification initiatives have failed. Why? Several reasons but the most common one seems to be that the process by which change agents attempted to simplify process was itself too complicated. "Old wine in new bottles" is still old wine. As with process simplification, the ultimate result -- quality of wine -- also requires a sequence of initiatives and is determined by many factors which include ingredients (i.e. grapes), soil, climate, timing, etc. The same is true of innovation initiatives. I wholly agree with the co-authors that "how you innovate determines what you innovate." So to repeat: In 2005, there is a compelling need to view innovation from different perspectives. In other words, to think innovatively about innovation. Obviously, easier said than done. Much easier. Those initiatives are most effective when they involve communication, cooperation, and collaboration between and among everyone involved. Hence the importance of what Davila, Epstein, and Shelton offer in this book.

As I read their informative and thought-provoking book, I was again reminded of the fact that the same principles which they cite and then explain have -- for decades -- guided and informed the pragmatic innovation of countless teams and even communities. For example, those which Warren Bennis and Patricia Ward Biederman examine in their book, Creating Genius: the Disney studios which produced so many animation classics; Xerox's Palo Alto Research Center (PARC) which developed the first personal computer; Apple Computer which then took it to market; those in the so-called "War Room" who helped to elect Bill Clinton President in 1992; the so-called "Skunk Works" where so many of Lockheed's greatest designs were formulated; Black Mountain College which "wasn't simply a place where creative collaboration took place" for the artists in residence from 1933 to 1956, "it was about creative collaboration"; and Los Alamos (NM) and the University of Chicago where the Manhattan Project eventually produced a new weapon called "the Gadget."

Those who share my high regard for this book are urged to check out the aforementioned Organizing Genius as well as Evan I. Schwartz's Juice: The Creative Fuel That Drives World-Class Inventors; three volumes in the Harvard Business Review Paperback Series on Breakthrough Thinking, Innovation, and The Innovative Enterprise; Tom Kelley's The Art of Innovation: Lessons in Creativity from IDEO, America's Leading Design Firm; Seeing What's Next: Using Theories of Innovation to Predict Industry Change co-authored by Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth; and The Design of Things to Come: How Ordinary People Create Extraordinary Products co-authored by Jonathan Cagan, Craig M. Vogel, and Peter Boatwright.

The authors clearly understand today's best practices in innovation both for breakthroughs and for on-going incremental improvements. They take what seems amorphous to many and make it as concrete as is desirable to do.

The basic approach entails helping readers to understand that the processes you use to innovate determine what kind and how much innovation you will accomplish. From there, the book focuses on how to use a process that permits all of the kinds of innovation to prosper that the company's strategy pursues.

While many such books exhort everyone to go for breakthroughs, Making Innovation Works also explains when it's appropriate to have a more defensive innovation strategy . . . but to stay in the game . . . rather than to fall behind by being too defensive.

For me, though, the book really hit its stride in chapter six where the appropriate measurements are described to identify how your innovation process is doing. The book became even more impressive in chapter seven where incentives for innovation are explained. Chapter eight on how to learn innovation is perhaps the most pivotal section in the book. Chapter nine on creating a supportive culture for innovation was also solid.

I was pleased to see that Making Innovation Work looks beyond just innovating products and processes. The book also addresses business model innovation, perhaps the most important subject for innovation.

The only weakness I found in the book came in describing business model innovation and how to pursue it. The authors have too narrow a view of what's involved in business model innovation. They need to become more familiar with the less frequently cited best practices in business model innovation. Although their bibliography on innovation is a marvelous one, I was surprised to see how thin it is on the subject of business model innovation.

Until a better overview of how to manage innovation comes along, Making Innovation Work will be the standard reference.