The Innovation Equation: Building Creativity and Risk-Taking in Your Organization / Edition 1

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A Step-by-Step Guide for Building Innovative Capacity in Organizations

"Practical in so many ways, this book should top your reading chart if you are at all interested in the business of being more innovative— or coaching others. I use the term — business because innovation is no longer a soft skill, but one that drives organizational success."
— Dr. Mitchell Kusy, coauthor of Fast Forward Leadership

This definitive guide for building innovative capacity in organizations teaches you how to create an environment that fosters creativity, innovation, and risk taking. Based on the work of Richard E. Byrd, a pioneer in the field of organization development, this book includes an assessment tool for determining what drives creativity and risk taking and offers a four-step process for building innovative capacity in individuals.

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Editorial Reviews

From the Publisher
"A clear and concise treatment." (Hartford Business Journal, 10/28/02)
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Product Details

Meet the Author

Jacqueline Byrd, Ph.D. is president of the Richard Byrd Company, aMinneapolis-based management consulting firm that serves clientsworldwide. Her clients have included Alliant Techsystems, Cargill,Caterpiller Paving Products, Ecolab, HealthPartners & RegionsHospital, Pentair, 3M, and the University of Minnesota. She is alsothe brain behind Creatrix, an innovation of the Byrd Company.

Paul Lockwood Brown has been with the Creatrix team, an innovationof the Richard Byrd Company, since its inception.

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Table of Contents

List of Exhibits, Figures, and Tables.



1. Perspectives on Innovation.

The Nature of Innovation in Organizations.

Creativity and Innovation.

Fostering Creativity in Organizations.

Risk Taking and Innovation.

Fostering Risk Taking in Organizations.

Innovation = Creativity x Risk Taking.

Ideas for the Consultant.

2. Assessing Innovative Capacity.

The Assessment.

The Orientations.

Changing Orientations.

Ideas for the Consultant.

3. The Drivers of Creativity and Risk Taking.

The Drivers.

Innovative Capacity Continuum.

Creativity Driver Stories.

Risk-Taking Driver Stories.

Final Thoughts.

Ideas for the Consultant.

4. Two Tales of Innovation.

A Grimms' Fairy Tale.

A Contemporary Story.

Ideas for the Consultant.

5. The Stop Signs to Innovation.

Stop Signs to Innovation.

Illustrating the Power of the Stop Signs.

Ideas for the Consultant.

6. The Innovation Equation in Action.

The 4As: Aim, Assess, Activate, Apply.

Organization #1: Model, Inc., the Modifier.

Organization #2: PLANet Partners, LLC, the Planner.

Organization #3:, the Innovator.

Organization #4: Your Team/Organization.

Ideas for the Consultant.

7. The Innovative Leader.

Create an Innovative Culture.

Set an Innovative Aim.

Become More Innovative Yourself.

Create Innovative Teams.

Ideas for the Consultant.

8. The Innovative Consultant.

The Drivers in Action for an OD Consultant.


Is It Working?

Final Thoughts.

Appendix A: I3: Investing in Innovation.

Appendix B: The Creatrix Ba: A Process for Creating InnovativeIdeas.


About the Series.

Statement of the Board.

Afterword to the Series by Richard Beckhard.

About the Editors.

About the Authors.


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First Chapter

The Innovation Equation

Building Creativity and Risk-Taking in Your Organization
By Jacqueline Byrd Paul Lockwood Brown

John Wiley & Sons

ISBN: 0-7879-6250-3

Chapter One

Perspectives on Innovation

The Nature of Innovation in Organizations

According to the American Heritage Dictionary (1994), "Innovation is the act of introducing something new." Notice that the definition doesn't say something that has never existed before, implying that a modification of a current product is not an innovation. Nor does it say that every idea is innovative. Note the words, act of introducing (risk taking), and the word new (creative). These concepts, creativity and risk taking, in combination, are what innovation is all about.

Innovation = Creativity × Risk Taking

Innovation manifests itself in myriad ways, small and large, every day. The invention of the fax machine was an innovative act. So was being the first restaurant owner to put out a fish bowl to collect people's business cards. In exchange for a few free lunches, this innovative person was able to discover where his or her lunch crowd was coming from.

Further, innovation does not have to be dramatic or large scale in nature. Incremental improvements are indeed incremental innovations. They add great value to the success of a company. For example, changing the size or color of Post-it(r) Notes has provided additional business opportunities for 3M. Certainly onewouldn't want to rely solely on these types of incremental innovative solutions for continued business success, but their value remains nonetheless.

Innovation keeps companies alive through continuous renewal and growth. Without innovative ideas, a company stagnates and may even cease as a going concern. Thus innovation becomes a must, rather than an option. Organizational innovation may range from introducing new products and services to complete reinvention of the organization.

Innovation may mean greater product differentiation or diversification. For example, Pepsi-Cola now has Pepsi, Diet Pepsi, Pepsi One, Diet Pepsi Twist, and so on and so on. Tobacco companies, albeit slow to recognize their ultimate fate, have begun to diversify their product lines to include food and other consumables. Ultimately, this may include redefining paradigms of their core business. For example, if railroads had shifted their paradigm to define their core business as the transportation industry rather than the railroad business, perhaps we'd be flying on Northern Pacific Airways rather than Northwest Airlines.

In other words, you will be left behind if you don't innovate. Take a moment to reflect on the recent history of your organization. Would you characterize it as more competitive as a result of its innovative efforts? Maybe it hasn't been innovative at all and as a result is declining in market share, profitability, or some other measure of success. While the challenges may seem daunting, it's not too late to make adjustments. That's the beauty of building your innovative capacity: it creates the capacity for change, which can help companies modify, adapt, survive, and even thrive in these competitive times.

Consider the following perspectives. Leonard (1998) states, "Innovation, the source of sustained advantage of most companies, depends upon the individual and collective expertise of employees." Hirshberg (1998) says, "Innovation requires the capacity to disdain tradition and break with comfortable routines and mastered skills." Drucker (1985) defines innovation as "the effort to create purposeful, focused change in an enterprise's economic or social potential."

These definitions require breaking with the status quo and, rather than focusing on the past, they focus on future possibilities. Organizations have long recognized the need for innovation. In fact, 3M built its reputation on innovation and is headquartered on Innovation Boulevard! However, the question of how to become more innovative remains a mystery to most. Some look to other companies to benchmark innovative strategies. Others articulate the need in a vision or mission that's supposed to foster innovation. Still others seek prescriptive, proven formulas, not realizing that such plans run counter to what fosters innovation.

The Necessity of Organizational Innovation

Is the wise old adage "necessity is the mother of invention" applicable today? Can we really afford to wait until the need proves great before we're forced to innovate a solution? In today's competitive marketplace, playing the waiting game is a telltale sign that your organization doesn't understand just how much risk it's taking by failing to act. To be anything less than proactive when it comes to building innovation in your organization is simply giving the upper hand to your competitors.

Most of us value the results of innovative ideas. Innovative ideas usually make our lives easier. Telephones, electric lights, freeways, automobiles, digital phones, airplanes, skyscrapers, colored pencils, calculators, clocks, computers, refrigerators, tape dispensers, and blenders were all once original ideas and innovative responses to challenges.

If we think about the obstacles and constraints our organizations and teams are facing, we'll find that at times the solutions to these issues require us to introduce new ways or means of doing things, that is, a creative solution that someone or some group took the risk to introduce. As today's business challenges are becoming increasingly difficult to manage, today's organizations have to develop innovative solutions to stay competitive. The viability and success of an organization may very well depend on your personal and your team's capacity to foster this capability.

Often when we're confronted with a challenging business obstacle, we merely hope someone will come up with a good idea or strategy-after all, isn't that the way it's worked in the past? Sometimes we may even sit back and criticize those in charge for proposing half-baked solutions. Indeed, if the solution is half-baked, how come it doesn't include the critical insights from those (like you or me) who obviously know a better way? Specifically, why don't we take the risk to introduce our perspectives or come up with new solutions?

Breakthrough innovations are often serendipitous in nature. The value of strategic planning notwithstanding, organizational breakthroughs are frequently the function of an epiphany, a sudden intuitive realization. All of us have epiphanies. Many times they occur after we have separated ourselves from the immediate issues at hand. For example, taking a break from wrestling with difficult issues around the conference table to exercise over lunch has lead to more than one epiphany. Whether we're working out, waiting for an airplane, or driving home, breakthrough thinking happens at unusual times. It is often unplanned. Limiting breakthrough thinking to brainstorming sessions in the boardroom is an almost certain prescription for failure.

A Limiting Mentality: Organizational Messages That Inhibit Innovation

Organizations, teams, and individuals have trouble with innovating because they often have an arrogance, frequently exhibited as complacency, about their past success; further, they cling to the comfort of predictability and conformity. Ideas outside the realm of current paradigms are criticized as not reflecting the core values of the organization. Other times our immediate supervisor has opportunity areas, and we can't forget the "What's in it for me?" attitude that seems to prevail in such circumstances. The reality is all these things and more contribute to inhibiting innovation.

Landrum (1993) states that large organizations stifle innovators because of the following:


Short-term mentality,

Expert syndrome,

MBA syndrome,

Cultural dysfunction,

Intolerance of mavericks,

Risk adversity,

Micro versus macro vision,

Not invented here syndrome, and

A Wall Street mentality.

Albeit unintentional, these phenomena suggest powerful forces are at work in many of today's large organizations. This mentality provides opportunities for smaller, less established firms that operate with higher degrees of innovative capacity to take advantage. Innovative companies know they have limitations. They look for opportunities beyond their immediate realms, depend on everyone to contribute, celebrate the mavericks within their ranks, take greater risks, and establish visions of the future that allow for potentially disparate realities. They develop and maintain a sense of urgency with respect to virtually everything they do.

In Creative Destruction, Foster and Kaplan (2001) say:

"Corporate control systems also undermine the ability of the organization to innovate at the pace and scale of the market. Under the assumption of continuity, for example, the arguments for building a new business can be turned back since its probable success cannot be proven in advance. Corporate control systems limit creativity through their dependence on convergent thinking. Convergent thinking focuses on clear problems and provides wellknown solutions quickly. It thrives on focus."

Innovation does not depend on convergent thinking. Innovation depends on divergent thinking, on the ability to change and move in directions that are nonlinear. In Edward De Bono's words, it depends on lateral thinking. In Lateral Thinking: Creativity Step by Step, de Bono (1973) says:

"Lateral thinking is quite distinct from vertical thinking, which is the traditional type of thinking. In vertical thinking one moves forward by sequential steps each of which must be justified. The distinction between the two sorts of thinking is sharp. For instance, in lateral thinking one uses information not for its own sake but for its effect. In lateral thinking one may have to be wrong at some stage in order to achieve a correct solution; in vertical thinking (logic or mathematics) this would be impossible. In lateral thinking one may deliberately seek out irrelevant information; in vertical thinking one selects out only what is relevant."

Corporate directors and shareholders' continued pressure to improve organizational financial performance often requires more than linear improvements; they require breakthrough innovations. According to Hamel and Prahalad (1994), "Most companies long ago reached the point of diminishing returns in their incremental improvement programs."

The key is to understand what fosters innovation within an organization. Little happens without the understanding that creativity and risk taking are the essential components of innovation. Appropriate risk taking coupled with creative ideas is what innovation is all about. Organizations that want greater creativity, risk taking, and innovation must realize that this requires paradigm shifts. Shifts in thinking that, until they become well-rooted, may be inadvertently undermined by their own actions. The risk is not in undertaking the endeavor; the risk is in failing to remove obstacles impeding success, obstacles that include management's own actions. As organizations demand greater creativity and innovation from their members, they must provide the environments that encourage the behaviors they desire. Failing to do so is tantamount to spinning your wheels; all talk, with no action.

Creativity and Innovation

Think back for a minute to the definition we presented at the beginning of this chapter: Innovation is the act of introducing something new. The something new has its origins in creativity. Innovation demands creativity. Foster and Kaplan (2001) say, "The underlying element in all innovation is creativity. Only by understanding creativity can one grapple with what is needed for sustained performance."

Creativity is the ability to develop new ideas. Those ideas may be as mundane as turning eggshells into little faces or as sublime as the great pyramids of Egypt. They may be as practical as the saltshaker or as absurd as a Pig-Latin alphabet. Regardless of scope, creativity is synonymous with new ideas (Byrd, 1974).

Restrictions on experimenting with new ideas are imposed on most people from early childhood. Children are instructed to keep within the black lines of the coloring book, and doodling is often discouraged and viewed as unproductive. Creating fanciful stories is often interpreted as lying, and pretending is tolerated only until a child reaches a certain age-then it becomes embarrassing. Being out of line-be it the line to the cafeteria, the washroom, the water fountain, or the playground -is considered bad behavior.

Adults on the job are also caught in a variety of binds. Management often seeks coordination, implementation, and follow-through, squeezing any room for creativity out of the equation. Often creativity threatens the status quo. After all, organizations need systems, and what good are systems if people deviate from them? We're not advocating greater creativity in all situations or creativity for its own sake. For example, do we want our heart surgeon or pilot to get creative on us?

Actually we might. If that surgeon or pilot is faced with a situation that demands creativity in order to save our life, we don't want them to necessarily follow the book. Similarly, when our organization or team is confronted with an obstacle that needs to be overcome, we need creativity-and lots of it! Like anything else, knowing when, where, and how much is crucial.

Creativity is measured by originality. In fact, originality is the most commonly acknowledged facet of creativity (Bailin, 1992; Runco & Okuda, 1988). And all of us are original to some degree. But let's not confuse originality with intelligence. People often assume that originality and intelligence are correlated. There is little evidence to support this assumption. Many people with only average intelligence have many original ideas, and some of the brightest people seldom have original thoughts.

So is there a single best definition of creativity? We asked a number of people to provide some definitions. What follows is a partial list of what we heard:

1. Quality of thinking that inspires ingenuity and imagination;

2. Producing something useful that establishes worth/enjoyment and that has not been done before;

3. Expressing yourself openly;

4. Putting things together in a new way;

5. Conjuring something unique;

6. God;

7. Like ... your imagination, but in a different way;

8. A different way of looking at things;

9. Coming up with new ways of doing things;

10. Looking to do or create something without being hindered by past rules or perceived boundaries;

11. Stretching till it hurts and feels good all at the same time;



Excerpted from The Innovation Equation by Jacqueline Byrd Paul Lockwood Brown Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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  • Anonymous

    Posted November 9, 2006

    Developing the innovative capacity of individuals & teams

    The Innovation Equation ¿ Building Creativity and Risk Taking in your organisation.. The Innovation Equation is a book aimed at explaining some of the principles and hard-won secrets behind successful innovation. It seeks to clarify the characteristics of differing cultures and people that take ideas and bring new products, processes and services into existence. It seeks to clarify what innovation is and, most importantly of all, how to develop the innovative capacity of individuals, teams & organisations. The Authors begin by defining innovation they start by using a dictionary definition: ¿Innovation is the act of introducing something new¿ and explain that ¿the act of introducing¿ is akin to taking risk & ¿new¿ is about creativity. This leads on to what the authors call the innovation equation: Innovation = Creativity x Risk Taking They make clear that innovation may be small or large and that what is innovative in one industry may have been done somewhere else before (or not as the case may be) leading the reader to recognise that innovation is available to all of us and not an elite few within organisations. Once the scene has been set the authors go on to explore the Innovation Equation in detail outlining some of the strengths of individuals and teams based upon their current capacity of Creativity and Risk Taking. They identify eight orientations to innovation and label them: Innovator, Challenger, Dreamer, Sustainer, Modifier, Practicalizer, Synthesizer and Planner These orientations are explored in terms of their value and limitations to the organisation and how the coach/ consultant can work with them to begin building the organisations capacity to innovative. The Creatrix model maps the orientations graphically. Included here is a short questionnaire to help the reader identify their current preference and orientation on the Creatrix. Case studies and examples of how the authors have worked with individuals to change and grow are used to show these drivers in context. Throughout the book case studies, academic references, examples and graphics are use to communicate key ideas, to help understanding and support the reader doing something with the content of this publication. In summary This is a practical book with plenty of ideas and concepts for the manager, developer or coach to take away and use. Throughout the authors have included small sections containing ¿ideas for the consultant¿ which provide valuable ideas thoughts and actions which any reader can use in their day to day work. Overall It proved to be an interesting and motivating read. It aims to clarify the characteristics of cultures and people that lead new products and services to market and what you can do to improve your competitive advantage. I recommend this title if you are involved in developing the innovative capacity of an organisation.

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