the other side

Business is built for efficiency not innovation


Vijay Govindarajan and Chris Trimble embarked¬† on a ten-year journey during which they completed research on a number of well-known and well-respected companies (e.g. Cisco Systems, Hewlett-Packard, IBM, The New York Times, and Unilever) and interviewed dozens of senior-level executives at dozens of other companies that include Aetna, Allstate, Ben & Jerry’s, BMW, Citigroup, GE, Harley-Davidson, Mattel, Procter & Gamble, Sony, and Timberland.

The questions

  • Why is innovation so difficult?
  • Why are companies not designed for innovation?
  • Can you create a culture of innovation?
  • How is innovation a challenge for modern company leaders?
  • What are 3 things that a company can do to foster innovation?

The learning

The authors cover what they learned about what works and what doesn’t.

  • 3M famous for giving employees 15% of their time to pursue creative ideas, Google 20% – but does it work?
  • Innovation leadership is best thought of as civil disobedience. But the odds are against mavericks!
  • How do wild guesses morph into informed estimates and then become reliable forecasts?
  • The key to dealing with complexity is to focus on having good conversations about assumptions.
  • Through innovation, business organisations can change the world” One problem though. Business is built for efficiency, not innovation.
  • Trying something experimental is easy. Learning from the experiment is not.
  • Innovation Man” I for Ideation, I for Invigoration, I for incubation – What about the I for Implementation?
  • Why learning is a soft and squishy objective; results, on the other hand, are what business is all about.
  • How did WD-40 migrate from a rust prevention solvent for the aerospace industry in 1953 to over 2000 possible applications by 2009?
  • Most companies have plenty of creativity & plenty of technology. What they lack are managerial skills to convert ideas into impact.
  • It is one thing to come up with a wonderfully innovative idea. Quite another to be able to execute it.

Strategic experiments

They affirm the value of strategic experiments because they can have high revenue growth potential, focus on emerging or poorly defined industries, test an unproven business model, involve radical departure from existing business, require allocation of at least some existing assets and competencies, develop new knowledge and capabilities, create discontinuous rather than incremental value creation, have greater uncertainty across multiple functions, tend to be unprofitable for several quarters (or more), and offer little (if any) indication of performance, at least initially.

10 rules

The challenge for leaders of innovation initiatives is to get an appropriate balance right between operations that are on-going and those that are experimental. The latter by their nature are often non-routine and disruptive. Govindarajan and Trimble explain how to:

  1. Build a dedicated team
  2. Define a partnership of the team with the “Performance Engine”
  3. Obtain support from senior-level executives
  4. Anticipate and prepare for resistance and conflict
  5. Achieve buy-in
  6. Devise and conduct a “disciplined” experiment
  7. Identify information needs
  8. Focus on learning when evaluating results
  9. Achieve transparency through effective communication
  10.  Create a framework for accountability




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Hi, my name is Ron Immink, I am a business coach, author and speaker, working with companies to improve their future prospects and improve their business models.
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