HARVARD BUSINESS REVIEW ON BREAKTHROUGH THINKING ("Harvard Business Review" Paperback) (Paperback)

There are many lessons to be learned from a film unit where talented people band together for a short time; success depends on getting the right personnel, enabling them to work well together, motivating them to peak performance, leading them to create on schedule, and handling the stresses that arise. The director's job is managing the different phases in a film's production - preproduction script development etc, the production phase of shooting, camera, lighting, sound crews etc., and post production of picture and sound editing etc., all under intense budget and time pressures. Many managers in business and industry follow the film directors' approach intuitively but it is rarer for a manager to relate to different people in different ways or to the same people in different ways at different times.

CoolBurst is a fictitious case study of a soft drinks company that had ruled the market but where revenues and profits had stagnated. The company's most creative employee had joined the largest competitor while many new companies were joining the competitive fray with each one coming from a different angle. The one remaining creative person, the marketing director, got a lot done but his work style of going to the movies during work hours did not fit the company culture and adversely affected others. He had warned everyone that past success was due to being in the right place at the right time and that the bubble would burst; CoolBurst had to create a new vision of the brand and innovate or evaporate. CoolBurst had to make itself a more welcoming, nurturing place for creative individuals, encourage employees to take more risks and change the culture of command, compartmentalization and control. Leadership that envisions, empowers and energizes is required. Five experts put forward their views of the best way out of the dilemma.

Peter Drucker points out that opportunities for innovation can be found in unexpected occurrences, incongruities, process needs, changes in an industry or market, demographics, changes in perception, and new knowledge. These seven sources overlap and the potential for innovation may lie in more than one area at a time. Innovation requires talent, ingenuity, knowledge, diligence, persistence, commitment and demands that managers look beyond established practices. Demographics and an education explosion clearly identified a forthcoming shortage of blue-collar workers but only the Japanese acted on it and stole a 10-year lead in robotics. Despite an unprecedented improvement in Americans' health, perceptions were different, creating a huge market for health care products and exercise equipment. Purposeful, systematic innovation is work rather than genius, beginning with the analysis of the source of new opportunities followed by field work to look, ask and listen, using both left and right sides of the brain.

The past two decades have seen a dramatic acceleration in the pace of change in the market place requiring companies to abandon old hierarchical models and managers to adapt to unstable and unpredictable markets in which it may be difficult to define the problem let alone engineer a solution. The analytical approach is giving way to the interpretive approach in companies like Levi Strauss and Chiron that have stayed at the top of an industry where the customer does not know what he wants or needs. What is fashionable emerges during conversations between designers, buyers, customers, manufacturers, and fashion writers. There is no beginning and no end; what is fashionable has no final answer and the answer keeps changing. Levi divides the market into age segments and assigns a designer to each segment. Each designer is encouraged to become immersed in that segment's culture by living the life of its members, shopping at their stores, eating in their restaurants, dancing in their clubs, listening to their radio stations, and reading their magazines - all in an effort to spot new trends. Interpretive management constantly questions the boundaries of the company's core competency and demands a whole new way of thinking about the work of the business executive.

Managers of less successful companies follow conventional strategic logic while managers of high growth companies follow what Kim and Mauborgne of INSEAD call the Logic of Value Innovation. Instead of battling competitors over shrinking cinema attendance in Belgium, Bert Claeys created Kinepolis in 1998 and made the competition irrelevant by offering a greatly improved experience. Neither an ordinary cinema nor a multiplex, Kinepolis is the world's first megaplex which won 50% of the Brussels market in its first year and expanded the market by about 40%. Today many Belgians refer not to a night at the movies but to an evening at Kinepolis. The five dimensions of Value Innovation Logic say that:
- an industry's conditions can be shaped and are not given
- competition is not the benchmark
- focus on what customers value
- what would we do if starting anew?
- think in terms of the total solution sought by the customer

Any manager who sees sales or profits stabilizing or going into decline would be wise to read this book.