Relentless Innovation


  • For businesses to succeed in the future, their "operating models" must be rebalanced between efficiency and innovation.

Longtime innovation blogger and McCombs MBA alumnus Jeffrey Phillips, who also blogs here at Texas Enterprise, has just published Relentless Innovation, an addition to the growing library of books on the subject. Relentless Innovation also effectively debunks lesser efforts, particularly in the chapter "The Mythology of Innovation," in which Phillips takes on such enduring innovation myths as the success of the fast-follower strategy and the idea that sustained innovation is impossible for any firm. But the mythology chapter is just the warm-up for the book's very sharp point: The real barriers to innovation are "business as usual" and middle management, and in order to become more innovative, firms need to transform these from innovation barriers into innovation drivers. Phillips puts his money where his mouth is by spending the rest of the book showing exactly how that can be done.

I sent Jeffrey Phillips five questions about his new book and he kindly provided email answers:

Q: If you had to sum up the main point of your book in a sentence, what would it be?

A: For businesses to succeed in the future, their "operating models" must be rebalanced between efficiency and innovation.

Q: You talk a bit about how middle managers charged with innovation can succeed in the absence of a clear innovation strategy or creation of innovation competency within the company. Understanding that that is the ideal circumstance, what would you say is the best course of action for a middle manager who wants to try to innovate, or start the ball rolling to make his or her company more innovative?

A: I doubt that a middle manager, in isolation, can create an innovation discipline or competence. He or she simply won't have the attention and the authority to create the processes and rewards necessary to shift the culture. Individual managers can conduct innovation projects, but I doubt that by themselves they can fully engage the business.

That said, if I had to recommend an approach for an individual middle manager, I'd suggest starting with trend spotting and scenario planning exercises, leading to idea generation. In this manner the manager can get his or her team thinking about the future and how to be proactive, rather than reactive. As those becomes "standard" actions or functions, the team can build on this by adding other innovation tools and processes. The middle manager will also want to change or impact cultural perspectives and attitudes such as how the teams are evaluated, compensated and rewarded.

Q: Can you talk about how collaboration helps (or hurts) innovation efforts in corporations? Is internal collaboration more/less important than external collaboration (open innovation)? Why or why not?

A: Internal collaboration is important, because the number of people who review and comment on an idea can actually strengthen the idea and build an internal community, which is reinforcing. We recommend building an internal capability for managing ideas before opening up to external partners and customers, so that your firm can manage customer or partner ideas effectively. Eventually, we won't talk about "open" innovation, because all innovation will include a component of external collaboration.

Q: You say that companies need to create a "Cortez" moment, where they decide there's no turning back in their quest to be innovative. I'm wondering if the ongoing erosion of the American consumer market in the face of the recession and focus on growth of BRIC consumer markets has created such a moment for American companies. Do you agree or disagree, and why or why not?

A: The Cortez moment is the famous "burning of the boats" leaving no way to go back to the old ways of doing business. I don't think that many executives are ready to discredit their existing business processes; rather, I think we are in a blame game, blaming the rise of external and foreign competitors, taxation, open borders, etc. There are only a few visible Cortez moments, and we are aware of them because they are dramatic - A.G. Lafley declaring that 50 percent of products would originate from external ideas, or Jobs cutting over 80 percent of Apple's product line. These were acts of visionaries who were forcing a course change and creating specific barriers to returning to the old models. For other businesses to do that, they first have to realize that the old models no longer work. I doubt many firms have arrived at that conclusion yet. Rather, they are blaming externalities for problems in the model.

Q: P&G and 3M famously and publicly threw down gauntlets with strong innovation goals. What would you suggest a company focus on in creating such "Big, Hairy, Audacious Goals" (BHAGs)? Percentage of collaboration with outsiders, like P&G? Percentage of profits from new products, like 3M? Or to your mind is there something better on which companies should put a proverbial stake in the innovation ground?

A: To create such a "stake in the ground," it is more important that the communication originate from a senior executive or the CEO, be explicit and quantifiable, easily measured and a significant change. Then, it will be important that the corporation commit resources to fulfilling that communication. The goal could be more external innovation resulting in new products, or it could be the revenue generated from new products, or it could result in the entry into a completely new market. The outcome is less important than the implementation.

I wrote recently about the statements of the new CEO of Yahoo. When asked how he intended to improve Yahoo and return it to former glory he stated "innovation", but didn't provide any strategy, any investment goals or resource commitments. So his statement appears to be a throwaway line, rather than something we observers can measure and evaluate over time.

Adapted from a version published on the blog Collaborative Innovation.