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

by Tony Davila, Marc J. Epstein, Robert Shelton

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Editorial Reviews
Product Description
Making Innovation Work presents a formal innovation process proven to work at HP, Microsoft and Toyota, to help ordinary managers drive top and bottom line growth from innovation. The authors have drawn on their unsurpassed innovation consulting experience -- as well as the most thorough review of innovation research ever performed. They'll show what works, what doesn't, and how to use management tools to dramatically increase the payoff from innovation investments. Learn how to define the right strategy effective innovation; how to structure an organization to innovate best; how to implement management systems to assess ongoing innovation; how to incentivize teams to deliver, and much more. This book offers the first authoritative guide to using metrics at every step of the innovation process -- from idea creation and selection through prototyping and commercialization.


All Customer Reviews
Average Customer Review:4.5 out of 5 stars
0 of 0 people found the following review helpful:

4 out of 5 starsLots of good stuff, not deep but with good references, 2008-10-02
The book covers almost all important topics in innovation, although it never goes into deep. I gave it 4 stars because I think it's a great accomplishment for the number of pages such a book is allowed to have, but some times the book is repetitive in the ideas. I wrote in the next lines a brief review per chapter of the points that most caught my attention.

Chapter 1: Driving Success
This chapter is a general introduction to the following ones. One important feature is the emphasis on the importance of Top Management support for innovation to happen according to a survey done by the authors. Page 13

Chapter 2: Mapping Innovation
This chapter discusses the places where innovation can occur (or be levered as they say) and put it into two big boxes: business model or technology. In business model the book look to what, to whom, and how: innovate in what value you are delivering, in to whom you deliver (the customer segment), and how do you deliver (the supply chain). Technology can be improved through product or service offerings, process improvement (especially in commodities), and what the authors call enabling technologies such as information technologies that allows improvement in decision making and financial management. They end this part of the chapter calling for integration between innovation in business model and in technology. The rest of the chapter digresses about the incremental, semi-radical, and radical types of innovation.

Chapter 3: Choosing your destiny
This chapter redundantly reminds you about choosing a strategy that fits your company, Play-to-Win or Play-not-to-Lose according to the number of incremental, semi-radical, and radical innovations one firm pursues.

Chapter 4: Organizing for Innovation
Basically this chapter discusses the necessary balance between creativity and value creation. The first is the problem of mature companies while the last one is the problem of start-ups. And it also deals with the different alternatives to outsourcing innovation such as networks as a way of partnering, innovation platforms, corporate venture capital model, and the ambidextrous organization. Innovation platforms are defined as organizational units of networks nestled within a company that directs resources toward specific areas of innovation. Page 197

Chapter 5: Management System
It starts depicting the five important rules any innovation systems should have: Efficiency, Communication, Coordination, Learning, and Alignment. It also depicts the Innovation Process: Generation of Ideas (GI), Selection & GI, Execution & GI, and Creation of Value & GI. Ps. Generation of Ideas permeates all the process. The chapter also discusses Structured Idea Management (kind of brainstorm), Experimentation, Prototyping, Making Deals (one person try to sell the idea to another, in an attempt to prove its capacity to create value), and the Fitness of innovation (to the strategy). It finishes comparing different Innovation Systems (stage gate process, structured idea generation, etc) and highlighting the importance of electronic communication.

Chapter 6: Illuminating the Pathway
Measurement Systems have three roles: Plan (to define and communicate strategy), Monitor (track the execution of innovation efforts), and Learn (identify new opportunities). To design an innovation measure system one needs clearly understand the business model of innovation: input (resources devoted to the innovation effort), process (combine the inputs and transform them), outputs (the results of the innovation effort), and outcome (value creation). Later the chapter discusses the design and implementation of innovation measurement systems based on measuring four main topics: ideation, portfolio, execution and outcome, and value creation. The chapter ends talking about the barriers to effective performance measurement.

Chapter 7: Rewarding Innovation
Four reasons why people are motivated: Recognition, Passion, Vision, and Economic incentives. Difference between incentives (before the effort stats, and link performance measure and rewards), more appropriate for incremental innovations, and recognition (reward that occurs after the outcomes of the project are available, even if there was no prior contract in place linking performance and rewards), more appropriate for semi and radical innovations. It discusses advantages and disadvantages of objective and subjective performance evaluations. Characterizing goals according to the kind of innovation one wants: for instance from radical to incremental goals go from broad to specific, from qualitative to quantitative, from stretched to realistic, and from success driven to loss avoidance. Issues to consider when evaluating performance: balance between team and individual measures, subjective versus objective evaluation, and relative versus absolute evaluation.

Chapter 8: Learning Innovation
It starts defining two major types of learning: learning to act (which includes collaborative assessments of how the current systems including structure, process, and resources are working) and learning to learn (structured processes to assess how well the organization learns and changes). Then it discusses four learning systems: systems for delivering value and for refining the current model (more amenable for incremental innovations), and systems for building competencies and for crafting strategy (more relevant for semi and radical innovations). It then explains some learning tools such as project roadmap and learning histories. It finishes discussing how the learning lifecycle in an industry influences the dynamic nature of innovation strategy: it stage will vary in time from the technology to performance to market segments to efficiency and finally to the complementarities stage.

Chapter 9: Cultivating Innovation
Innovation culture depends on locating the company in a position between conflicting goals: Balance X Disequilibria, Stability X Change, Focused X Diverse, Disciplined X Surprising, Proud X Threaten, Conservative X Risk taker, Guidance X Freedom, Control x Trust. The chapter discusses legends and heroes, and the environment. And in the end it also explains something about the role of senior management.

Chapter 10: Conclusion
Leadership is the crucial difference in creating and sustaining successful innovations. They also recommend an Innovation Climate assessment before start doing anything, and they show one containing 36 questions. They suggest a diagnosis plan should look at strategy, process, resources, and organization on page 270. they discusses some models for diagnostics and action such as venture capital model, technology innovation model, stage gate systems, time-driven systems, etc...


0 of 0 people found the following review helpful:

5 out of 5 starsGood experience, 2008-01-07
The book arrived on schedule and in good condition. You can't ask for anything else.


2 of 2 people found the following review helpful:

3 out of 5 starsGood message, but you might drown in fluff, 2007-11-28
I'm a fresh MIT graduate, and found this book a fun and insightful read. Much like other reviewers, I think this book has a nicely balanced and realistic view of innovation, stemming probably from the authors' extensive experiences. After the ridiculous amount of innovation hype at MIT, this was like a breath of fresh air that put all of that into a proper context. The book considers *both* radical and incremental innovation, whereas all my other sources have pounded me with only radical innovation. Both have their place in business, and this book has down-to-earth advice about how managers can deal with them. It also helps me as an engineer to know how my work fits into the bigger picture.

So the general message and organization is good, but I give this book 3 stars because of the writing. The book is *full* of un-insightful one-liner anecdotes/examples, which dilute the message and make this a long and confusing book to read. It's difficult to get through it.

A random example: " [p. 233] ... Driving innovation into the business mentality requires learning and change. Dell learned what was important to succeed in its innovation strategy, and worked hard to ingrain the learning into the business mentality and culture."

That last sentence sounds ok, but really it adds nothing. In fact it's really distracting. Those anecdotes are taken entirely out of context and given no further support. In the end I don't understand anything that really went on in the minds of Dell, Apple, Nokia, etc. etc. etc. after reading a whole book's worth of those one-liners. Nothing in those anecdotes proves - heck, indicates - how exactly *that* strategy brought the company out of a problem or *caused* success. Tired (from reading those examples every two sentences) readers might believe the message, but critical ones will recognize it as over-simplified fluff.

This book just needs a new version. The authors need to radically cut down on the number of examples, and add in some exciting detail to the ones they keep. After I marked all the important parts in the book (about 1/4), the book is making a lot more sense on a second quick read. Now it's finally clear enough that I can critically think about what it's trying to say.



6 of 6 people found the following review helpful:

5 out of 5 starsInnovation: Thrive or Fade Away, 2006-07-20
The term "Innovation" has been used so much in recent years that it's become cliche. Humans have been innovative for over 30,000 years, before the day of the first fire pit. People have always utilized innovation. But now it's is more vocally emphasized in the business realm because of ultra-competitive global market forces, and because we've reached the stage where technology enables change at a more rapid pace. "Innovation" is a Mantra. For lack of better words, creativity, adaptability, and innovation have always been vital. They've always been used by the successful: the winners; the victors. Innovation has always been mandatory. Survival: both literally and figuratively.

Authors Tony Davila, Marc Epstein, and Robert Shelton list 7 rules for innovation. This book uses matrices and tables to detail the different choices and the positives and negatives of choosing these various options. There are three types of innovation: 1) Incremental 2) semi-radical and 3) Radical.

Of the tons of information in this book, some things noted are the case study of the Coca-cola company and it's drop in sales, to Individual employee motivation in the "pay-performance relationship." Why do incentives for employees fail at times? Because they are overused. What can inhibit and actually kill creativity? "Fear, Failure, and Fairness" affect calculated risk taking by individuals, staff-teams, and entire companies. As for Radical Innovation, what is the motivation for radical innovations? That groundbreaking new idea, invention, product, vaccine, or piece of technology? Answer: intrinsic motivation.

One example of the types of innovation is a combination of them, such as in "Ersatz Radical Innovation." Ersatz is when a company (e.g. Apple) combines two forms of semi-radical change to create of successful product that changes an entire industry.

One case study enumerated how a company can focus too much on
innovation and lose site of the goal, such as in the case of Xerox PARC. The creative process must have the crucial ingredient that's equally vital: commercialization. It's a symbiotic relationship. Another very relevant issue discussed is the Outsourcing of Innovation. Which developments should be kept in-house? Which should be shared and outsourced? Innovation is so critical that it can't be outsourced entirely, so partial and selective outsourcing (sharing) is done under the proven concept of "partnering." Innovation is obviously borrowed, and oft-times today, it's outright stolen.

Perhaps a lot of this new focus on "creativity," and "innovation" and "adaptability," and "co-operation" is because of the recent rise of China, India, and other parts of the world. Game Theory's concepts are sprinkled about in this book because Game theory is an underlying and also an explicit element in economics, business, and calculated risk taking. Because of the theoretical and applicable strengths of
Game Theory we see innovation and adaptability + Game Theory.

This book deserves more attention. The writing style is
reader-friendly and keeps your interest. The authors provide
numerous case studies, stats, tables & figures, theory, and
practicality, and specific ways on how to survive and thrive in
today's world. Great book that more people should know about.


7 of 7 people found the following review helpful:

5 out of 5 starsThe first word on innovation, 2006-05-01
We recommend this book to everyone involved in innovation. Whether you're involved as a creative thinker, a promoter of new products, a manager guiding the innovation process or an investor evaluating an innovative company, there's gold here for you. Authors Tony Davila, Marc J. Epstein and Robert Shelton compress a mass of research and experience in innovation practices into a set of rules and guiding principles. Then, they use stories, lucid explanations, charts and careful definitions to illustrate how these principles work. A few of these concepts could have been expanded profitably - for example, how to tell in practice when radical innovation is needed, how to determine if you're innovating too much or too fast, and how to sort out the best ideas without discouraging the creators of the rejected concepts. That's the only caveat; everything else is fascinating and immediately applicable.




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