(1/4) Innovation 2.0 — my new book

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I am very happy to let you know that my first book has been published. This book was co-authored with Fran Chuan, Principle of Dicere in Barcelona. The book is in Spanish. The English version will be coming out at a later date. In the meantime, you can get this book from Profit Editorial.

In this and up-coming blogs for the next several months, I will highlight various elements from this book.

The title of the book is:

Innovation 2.0: Why do we forget about the people when we talk about innovation? A practical way to create a culture of innovation.

As the title suggests, the superordinate goal for a firm that wishes to be innovative is to create a culture of innovation. But this begs the question, why should we bother with innovation? Why should a firm be innovative? Who cares?

The notion of sustainable competitive advantage in the marketplace has always been the Holy Grail for executives. But, as technology cycles come faster, as the amount of information explodes exponentially from month to month, and as competition appears from unexpected corners of the globe, that notion of sustained advantage seems to be a myth.

Hence, firms are increasingly hoping that “Innovation” can keep them competitive and thriving. So, most executives are always asking “How do you innovate? How do you invest in R&D? What processes do you set up in the firm for innovation? How can we measure innovation?” However, these are the wrong questions to ask. Or, at the very least they are necessary questions; but, not sufficient.

In April 2010, Business Week and BCG released an annual list of World’s 50 Most Innovative Companies; a list that they initiated in 2006. This list contained some up-and-coming firms like Infosys, BYD, HTC, RIM, Facebook and Lenovo. Each year, there are a few firms that are regulars—Apple, Google, Toyota, Microsoft, IDEO, IBM, GE, P&G, Wal-Mart, 3M, Southwest, J&J and Disney.

In the 2006 list only seven firms out of the top 50 were centenarians. In 2007, 2008, 2009 and 2010 that number was 12, 13, 15 and 14 respectively. They included firms like Nintendo, Tata, Nestle, Fiat, HSBC, Santander and Coca-Cola; in addition to the other well-known centenarians – 3M, IBM, P&G, and J&J. As the world economy faltered and spluttered, old and established firms seemed to have come back to vogue.

Innovación 2.0, ¿por qué cuando hablamos de innovación nos olvidamos de las personas?

How have these “old masters” survived for more than a century when the average lifespan of a Fortune 500 firm is around 45 years? What do they know? What do they do? How do they do it? For business historians this is not surprising. These are firms that have withstood the test of time. These firms have been built to thrive independent of changes in technologies, markets, products, services and people etc.

Enterprises today are plagued by constant change. Most firms obsess over change, become paralyzed by change and even succumb to change. But the truly great firms, especially the centenarians, acknowledge that change is all around them. They flow with the change, but most importantly they know what not to change. They realize that when one is surrounded by a sea of constant change, you need a strong anchor that will not change; a core that will not change. That core anchor is the “culture of innovation.”

Technologies, products, process and markets usually do not give a firm a sustainable competitive advantage. Only a culture of innovation can give a firm sustainable competitive advantage. The “old masters” have demonstrated that this is possible.

Unfortunately Innovation is the new buzz word, and the new cool management fad. Everyone-from CEOs to politicians—are shaping their personas to identify with “it.” The clamor of business magazines, journals, consulting firms, academics and books are just adding to the clutter. To compound this problem, “culture” is also a fuzzy and soft concept. Firms, executives, consultants and academics have all struggled with “culture” for decades.

This book cuts through this clutter and confusion to bring some clarity on these two very poorly understood and poorly managed concepts – innovation and culture. This book lays out a simple, yet not simplistic, way to comprehend and manage them. You cannot make people creative and innovative. The only thing a firm can do is to create a climate where people can be naturally creative. So, this book addresses the question: How do you deeply imbed a culture of innovation within the enterprise?

In the next blog, I will discuss “The Sense and Non-Sense of Innovation.”

Jay Rao

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