Making Innovation Work: How to Manage It, Measure It, and Profit from It

by Tony Dávila, Robert Shelton, Marc Epstein, et al.

Book Overview

Profitable innovation doesn't just happen. It must be managed, measured, and properly executed, and few companies know how to accomplish this effectively. Making Innovation Work presents a formal... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0131497863
• ISBN13: 9780131497863
• Release Date: January 2005
• Publisher: Pearson Prentice Hall
• Length: 334 Pages
• Weight: 1.36 lbs.
• Dimensions: 1.2" x 6.0" x 9.4"

Customer Reviews

A Fresh Look at Nothing New

There is a dire need for a fresh look at innovation. Contrary to popular belief, the authors assert, much of what is held as common wisdom regarding how innovation is managed is wrong. Tony Davila, a faculty member of Stanford's Graduate School of Business, Marc Epstein, a research professor at Rice University's School of Management, and Robert Shelton, managing director of Navigant Consulting's Innovation practice write that contrary to popular belief, innovation: * Does not require a revolution. * Is not alchemy * Does not require a "creative" culture. * Is not solely about processes and stage-gate tools. * Does not focus exclusively on new technology. * Is not needed in copious quantities. The authors write that innovation, like many business functions, is a management process that requires tools, rules and discipline. It needs to be measured and promoted if sustained, high yields are going to be delivered. It is a necessary ingredient to safeguard an organization's tangible and intangible assets. In short, it is a vital and must be managed. To do so, the book identifies seven rules: 1. Strong leadership encourages value creation. 2. Innovation is a vital part of an organization's mentality. 3. Innovation matches the organization's business strategy. 4. Creativity and value creation are balanced. 5. Seek to neutralize forces that discourage good ideas. 6. Networks, not individuals, are the building blocks of innovation. 7. Metrics and rewards make innovation manageable. Execution of innovation is not difficult, the authors conclude. It is similar to other management activities, such as manufacturing or financial control. There are no secret formulas. This book replaces the myths and half-truths with clear and concise thinking on how to manage and execute innovation.

Book report by HBS Working Knowledge

This book opens with some cheery news: "Much that is held as common wisdom regarding how successful innovation is managed is wrong." According to the authors, innovation does not require a company-wide revolution or mystifying transformations, nor a focus on technology or a devotion to building a "creative culture." In fact, not every company really needs a large quantity of innovation. Instead, there are a few requirements to implement a successful innovation program: specific tools, rules, and discipline; the right measurements and incentives; and the ability to integrate both business model innovation and technology innovation. Using real-world examples from such innovative organizations as Apple, Coca-Cola, and Vodafone, this book identifies seven rules of innovation: exert strong leadership on the innovation strategy and portfolio decisions; integrate innovation into the company's basic business mentality; align the amount and type of innovation to the company's business; manage the natural tension between creativity and value capture; neutralize organizational "antibodies"; recognize that the basic unit of innovation is a network that includes people and knowledge both inside and outside the organization; and create the right metrics and rewards for innovation. Innovation comes in many flavors. For example, Apple is praised for its chancy decisions to invest in the iPod and iTunes, two "semi-radical" innovations that fundamentally changed the industry. Years earlier, rival Dell also broke with the traditional PC business by honing a direct sales strategy, but Dell's change led it to focus even more on PCs, not less. This book largely escapes a problem with many books on innovation: their relentless reuse of case studies of companies that were once rich in innovation but lost their way, apparently with little notice from the authors. So it's refreshing to note that Making Innovation Work takes a shot at Hewlett-Packard-an innovation golden boy in dozens of titles despite years of declining performance-by opining that former CEO Carly Fiorina sowed the seeds of its downward turn by changing the company's culture away from the "HP Way." We like the authoritative tone of this work, born perhaps from the experience of its trio of authors. Davila is a professor at Stanford's Graduate School of Business. Epstein was a visiting scholar at Harvard Business School and is a distinguished research professor at Rice University's Jones Graduate School of Management. Shelton is managing director of Navigant Consulting's innovation practice. Of the many recent books on innovation, this goes near the top of the list. - Sean Silverthorne

Predicting, encouraging, and planning for innovation

Innovation is a great thing to have in a company but how do you manage and plan for it? That is the question at the core of this book as the authors lead the reader through a process that measures, manages, and profits from innovation. They make the case that management of innovation depends on the right corporate culture as well as the right employees. When it becomes a part of the corporate culture then innovation can be a regular part of the planning process instead of an erratic thing that occurs occasionally and can't be planned for. Using a tried and true method they detail how to bring about this culture and the factors that defeat it as well as encourage it. Once innovation learns to thrive within your organization it can be used to differentiate your product or service and its perceived value. Insightful with lots of illustrations, sidebars, and other information that helps the reader understand the process, Making Innovation Work is recommended.

Measurable Innovation From the Ground Up as the Key for Future Success

Many CEOs speak of the need for innovation in their companies, but few know how to sustain such a nebulous culture especially during economic downturns. There is a commonly held perception that allowing such creativity necessitates a laissez-faire atmosphere, but co-authors Mark Epstein, Robert Shelton and Tony Davila offer the counterintuitive belief that a culture of innovation requires focused leadership, creative but viable metrics, an emphasis on business models rather than individual products and an incentive program that rewards the high-stakes innovation that is lacking within a company. It's a relatively daring concept but a vital one well researched and succinctly presented by this trio - Epstein and Davila are academics teaching at Stanford and Harvard and Shelton is a managing director of Navigant Consulting's Innovation practice. What becomes clear from this treatise is that innovation is a process that only starts with creativity, which includes idea generation, prototyping, experimentation and idea selection. But it needs to end with value capture, which encompasses project management, market planning, manufacturing, and commercial rollout. Often a company is good at either end of this spectrum - creativity or value capture - but not both. Epstein, Shelton and Davila assert that it is not an either-or proposition that companies need to pay attention to both to succeed in the long term. The co-authors credibly attribute one of the failures to sustaining innovation to what they call "rampant incrementalism". How they define this concept is the idea that people get so focused on incremental innovation that they cut off the bigger, more revolutionary ideas that could reap bigger rewards. The key is to have the right balance in the product portfolio - enough small projects to bring in steady revenue in order to support riskier projects that have the potential to produce the huge profits if they succeed. The fulcrum will be how much risk a company is willing to take and for someone to push the envelope to realize that optimal balance. The co-authors go as far as anointing a chief innovation officer, whose role is to stimulate the desired behavior companywide and eliminate constraints by integrating the technology and the business-model thinking. The new "CIO" can help the company focus on three particular aspects of the innovation rules: -- Networks that link the internal and external partners in the collaborative activities required to bring about innovation -- Balance in the processes that deliver creativity and capture value, from idea generation to commercialization -- Metrics that provide feedback and guidance to management The third element is the most intriguing component as it is essential in ensuring innovation thrives given that true innovators must be rewarded. Deciding what to measure is the most critical step. For example, many companies only measure whether projects are on time and on budget. But proper measurement has

Fresh perspectives on the basics of innovation that "have not changed for centuries"

A book's subtitle is often very informative and that is certainly true of this book. I also appreciate the fact that its co-authors explain why their book was written, what its key points are, and how its material has been organized. According to Davila, Epstein, and Shelton: "The truth is that there is not much that is truly new about innovation. The basics have not changed for centuries. However, we have become smarter about managing innovation." There is a compelling need in 2005 to view it from different perspectives. The co-authors suggest three: "Innovation, like many [other] business functions, is a 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 Shel