Sustained Innovation: Converging Business and Technology to Achieve Enduring Performance

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What People Are Saying

Leslie Willcocks
"An insightful, well written book on innovation. The authors have done well to capture stories of innovation across the board-from the Fortune 500 to social enterprises. The book is rich in ideas that highlight how to leverage technology to create sustainability in business or in doing good."--(Dr. Leslie Willcocks, Professor of Technology, Work and Globalization, London School of Economics)
Muhammad Yunus
"We are in the Era of Innovation, brought about by tectonic shifts in the global marketplace and by the staggering needs of millions of the world's people. In his usual fashion, Faisal Hoque presents this highly readable and thought-provoking book to take us on an international tour of the corporations, governments and social enterprises like our Grameen that are organizing in new ways to transform the 21st Century. By marrying the power of technology and business, there is very little we can't accomplish. Sustained Innovation shows where and how this is happening and inspires us to join in this new era."--(Professor Muhammad Yunus Founder of Grameen Bank Father of Microcredit Nobel Peace Prize Laureate 2006)
Paul Judge
"Sustained Innovation provides an intellectual framework which skillfully pulls together dozens of examples of innovation from around the world, ranging from the design of healthcare management systems to the microcredit project of Professor Yunus in Bangladesh, the recent winner of the 2006 Nobel Peace Prize."--(Sir Paul Judge, Vice Chairman, American Management Association, Chairman of the Royal Society of Arts and of Schroder Income Growth Fund plc.)
Prabhu Guptara
"My research indicates that, in all sectors, companies still find it incredibly difficult to link strategy with technology. No wonder they don't innovate continually. Faisal Hoque's new book, Sustained Innovation, shows why this is so and, in a highly readable way, indicates critical steps being taken by today's successful leaders to innovate by bringing business and technology together."--(Professor Prabhu Guptara, Executive Director, Organizational Development, Wolfsberg - A subsidiary of UBS AG)
Sujeet Kumar
"Using the BTM Framework, the authors have explained how organizational structures and processes can be aligned with systems and technology to generate and harness sustained innovation. This type of sustained innovation is sine qua non for sustained success. Sustained Innovation is highly recommended to everyone: whether you're involved as a social entrepreneur, a promoter of new products, a manager guiding the innovation process or an investor evaluating an innovative company, there's gold here for you."--(Sujeet Kumar, Global Leadership Fellow, World Economic Forum)
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Product Details

  • ISBN-13: 9780978817503
  • Publisher: Waterside Productions, Inc
  • Publication date: 3/8/2007
  • Pages: 128
  • Product dimensions: 6.10 (w) x 9.00 (h) x 0.80 (d)

Table of Contents

Acknowledgements XIII
Introduction XV
1 Why Innovation? Why Now? 1
2 The Innovative Mind 11
3 An Innovation Model 23
4 The Nimble Giants 37
5 Social Enterprises Lead the Way 59
6 The New Face of Government 75
7 Healer, Heal Thyself 91
8 Preparing For The Future 105
Conclusion 117
About the Authors 121
References 125
Index 129
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First Chapter

1 C H A P T E R An introduction to innovation. The SpinBrush and the Village Phone. A model for thinking about innovation. What will Steve Jobs do now? The death of friction and the birth of commodity hell. It's the people, stupid. Who is breathing down your neck? I f you've ever paused in a drugstore to play with a Crest SpinBrush toothbrush-you can try it out by pushing a button through the plastic package, as its designers want you to do-you came in touch with innovation, 21st Century style. This little gadget broke all the rules on the way to becoming the nation's best-selling toothbrush, manual or electric, helping Crest to regain its spot as the number one oral care brand and giving Procter & Gamble its 12th billion-dollar brand. And it is an excellent illustration of profitable innovation: it started as an invention, an innovative application of existing technology, but for it to become a powerhouse product P&G had to be innovative in how it built a business around it. P&G had to reach outside of its corporate walls, create a new kind of partnership, bend and break its go-to-market protocols, and create new business processes - in effect, create a new business model. None of this happened by accident. The original idea for SpinBrush was a light bulb over the head event-it came to "serial inventor" John Osher in the aisle of a Wal-Mart store-but connecting with that idea and turning it into a profitable product was the result of a management strategy and process. Here's the real secret of sustained innovation: it requires a business process that links the right people with the right ideas in a way that advances the firm's strategy. Now let's go halfway around the world to thevillage of Khorsuti in Bangladesh for a different look at innovation. In my [Faisal Hoque's] native Bangladesh, 97 percent of homes and virtually all rural villages lack a telephone, making the country one of the least wired in the world. This has blocked development and contributed to the continued impoverishment of individual Bangladeshis. To address this, Grameen (the Bengali word for "village") Bank, a micro-finance institution, formed two entities: Grameen Telecommunications, a non-profit organization to provide phone services in rural areas, and Grameen Phone Ltd., a joint venture of Grameen Telecommunications and Norway's Telenor. It has become Bangladesh's dominant mobile carrier. Grameen Phone helps local entrepreneurs, usually women, set up village phones, selling services to residents at a reasonable price. The company and the entrepreneurs profit, and the villagers get affordable connectivity. My father grew up in the village of Khorsuti in the Faridpur district, which didn't have electricity until six years ago. He went to engineering school and became one of the national government's most senior civil engineers, dealing with water resource management. Retired now, he visits Khorsuti often, and when he's there I can talk to him, wherever I am in the world, thanks to innovations of Telenor and Grameen. Telenor is the majority owner of Grameen Phone. I met with its CEO and President, Jon Fredrik Baksaas, in Oslo just before the Nobel Prize ceremonies in the fall of 2005. Baksaas shared that, despite Grameen's altruistic aims, Bangladesh is one of his company's fastest growing markets and has one of its highest gross profit margins. This is the meaning of "the global knowledge economy"- technology innovation in Norway and business innovation in Bangladesh. Innovation occurs when people, skills, organizations and technology are mixed and matched in unusual and productive ways. Let's step back from these positive stories to the turbulent economic environment that is propelling innovation to the forefront. If you are trying to lead an organization today, or you're just an employee hoping to hang on to your job, you know that this economy makes the '80s and '90s look positively tranquil. When we try to articulate what is happening to us in this new era, we resort to a familiar set of words: globalization, outsourcing, offshoring, information age, innovation, age of connectivity, disaggregated corporation, death of command and control, real time corporation, knowledge economy, sustainability. As with a dozen blind men touching an elephant and describing what they feel, each of these terms is relevant as far as it goes, but each addresses only part of the whole. To choose one as a lens through which to view life and business in the 21st Century is to run the risk of missing the larger picture. As a first step in organizing our thinking about these forces, and designing a response, we can group these terms in two categories. Information, knowledge and innovation might be considered the "what." Connectivity, disaggregation and partnerships might be considered the "how." In other words, what companies need today to survive is information, which can be analyzed and turned into knowledge, which can then point them to innovation. We get there by connecting, disaggregating and reaching out in new ways. Why Innovation? Why Now? If there is nothing new about innovation-think printing press, cotton gin, telephone, light bulb, etc.-why has it captured the imagination of every CEO, magazine editor and conference planner today? Why do successful companies like GE, IBM and P&G proclaim it from their rooftops? TA S K As you read this book, as you observe your company (you do observe your own company, don't you?), and as you read about other companies, look for these forces lurking behind otherwise inexplicable actions. We'll have much to say about the nature of innovation throughout the book. For now let's look into some of the big forces behind this phenomenon. The Death of Friction As any student in Economics 101 who has not slept through the lectures knows, a free market exists only when there are sufficient suppliers to create real competition and when there is price transparency, i.e., the consumer knows who is offering what for what price. One definition of friction is anything that prevents a free market. This friction can result from distance: if the nearest competitors are too far away to be practical for the buyer, the local seller has an upper hand. Today Amazon, just to name one example, has "set up shop" in every town, competing with the local storefronts. Friction results from incomplete knowledge. Today websites galore create price transparency for just about anything; you can compare products and prices online, and you don't have to pay top dollar for a second-rate product out of ignorance anymore. What does this do to businesses offering second-rate products at higher prices? How will they adjust when their cover of friction is blown? Many, many businesses have ridden on the back of friction for so long they become disoriented when it evaporates. This is what we might call "macro" friction; it exists in the marketplace. Another kind of friction is "micro," i.e., it exists within the firm. (This is how economists might label it. We won't push economists on you often in this book, but at least they have words for these things.) Using technology, and redesigning their business processes, Dell and Wal-Mart eliminated much of the friction in the chain all the way from suppliers to customers. And their competitors were blindsided. What will they do? Q U E S T I O N If commodities are necessary, and people will pay for them, is there any business model for offering them that will be profitable long-term? Commodity Hell Barriers to entry into many industries have fallen. It's not easy to start up a railroad, but you can start a personal computer company by outsourcing just about everything to other companies with specialties in design or manufacturing. And so IBM, an innovator of personal computers, abandons the business as PCs become commodities. And Dell, with a superior PC business model, offers a commodity PC for $300, while at the same time rebranding its top of the line boxes under the "XPS" label and offering special features and services- an effort to stay a step ahead of commoditization.
Unpredictable Competitors
Apple launches the innovative iPod and iTunes-an innovation in product and business model. Although there are similar products on the market, Apple captures the world's imagination with superior design and a unique store for music, one that sidesteps potential opposition from music companies trying to protect their rights. Meantime, cell phone companies start offering phones that can download and play music, counting on the huge installed base of cell phones and the instant gratification of being able to download music wherever you are. In the first quarter of 2006, Sony Ericsson's profits more than tripled due to sales of its Walkmanbranded music phones. Who would have thought cell phones could double as music players? What will Apple's Steve Jobs do? This book is primarily about large organizations, but the forces at work on these organizations today, the forces that drive them to innovate, can be seen in more familiar settings. What can we learn, for example, from a camera shop and an art print dealer?
Both do business in the small town where I [Terry Kirkpatrick] live. I would drop into the camera shop when I was in the market for a camera, chat with a knowledgeable clerk and look over several of the latest models. The only alternative would have been to drive 45 minutes to a bigger store, where there were more models to look at but less of a personal relationship to be had. Not long ago I went into this camera shop and discovered that it had very few cameras left to sell. Now it seemed to be concentrating on picture frames and other products.
The only response to these huge forces is to do something different, and that's why innovation is Topic A today. Perhaps you can incorporate technology into a new version of your product (but so can your competitors). Perhaps you can change your business processes to reduce cost, increase speed and respond more intelligently to your customers (but so can your competitors). Perhaps you should consider changing your business model-find new customers or new ways to please existing customers. So can your competitors, so you'll just have to be faster and smarter at it. This is most likely your best chance to create competitive advantage. What happened? Was it the big box stores? Or, more likely, was it the fact that I can go online in my family room, order a camera and have it delivered to my door in a few days? The camera shop was a victim of the death of friction.
The print dealer sold antique posters and art prints from a little storefront shop, catering to repeat clients and casual window shoppers. I met him one day at a backyard barbeque, where I learned of his business.
"Why don't you put your business on the Web?" I asked him. "What's that?" he asked.
Six months later he invited me to his home. There on his PC he showed me how he now had clients all around the world who found him on the Web and were buying from him. His innovation was not technical-the PC and the Web weren't new. (He hired a teenager he knew to build his website.) His innovation was his business model. He in effect made the entire world his market. He seized on the death of friction to grow. And he no doubt became an unpredictable competitor to unknown art dealers around the world. And whether you realize it or not, you are a player in this new global, knowledge, information age, digitized economy. You can still have a garage sale to get rid of that junk in your basement, or you can stay in your pajamas and put it up for sale to the world on e-Bay. Q U E S T I O N If you were in the digital camera business, do you think you might want to pay a little attention to the cell phones with built-in cameras?
It's the People, Stupid
As a second step in understanding what is happening to our organizations, let's add another word to the pile: people. If you as a leader focus on people, all of these other things-globalization, outsourcing, disaggregation, and the like-will fall into place. There are four groups of people that matter: those who work within your organization, those on the outside with whom you set up formal partnerships, those on the outside with whom you form ad hoc learning relationships, and those you aim to please with a product or service. Innovation is born in the minds of people who have the raw materials of information and knowledge. Apple, for instance, got the iPod idea from someone on the outside-Steve Fadell, a technology innovator who was shopping the idea around when Apple jumped on it. The leader's task is connecting and managing these people so that innovation can surface and be put to use. Consider, as an example, Procter & Gamble's approach to employees, customers and outside partners.
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