The Thinkers 50 asks a simple question: Who is the most important living management thinker?
You get to decide by selecting someone from the list. Now leadership isn't always be a popularity contest, but I do appreciate all of you who have emailed me to let me know about the contest.
Thank you!
P.S. - vote by selecting a name from the drop-down menu >>
The folks at Booz Allen Hamilton have named their Best Business Books 2006 in the latest edition of strategy+business [registration required].
Here's what they had to say:
"Ten Rules for Strategic Innovators: From Idea to Execution
"To turn a powerful idea into a successful business, authors Vijay Govindarajan and Chris Trimble, both of Dartmouth’s Tuck School of Business, recommend: “forget, borrow, and learn.” Forget assumptions, mind-sets, and biases from the traditional core business, because a new business (as opposed to a business extension) must be fundamentally different from a company’s traditional core business. Borrow assets like existing customer relationships, distribution channels, supply networks, brands, credibility, manufacturing capacity, and technological expertise from the core business, because those assets confer a significant advantage over entrepreneurial startups. Learn to make ideas — some of which may not be new — work together in ways that are fresh to your industry. And learning quickly minimizes the time to profitability, lowers risk exposure, and maximizes the chance to overwhelm the competition.
"The authors argue that the key measure of learning is the ability to predict future performance. They recommend “theory-focused planning,” a process based on the scientific method designed to test a series of predictions until they lead to sufficiently reliable forecasts. They also recommend holding leaders of potential strategic innovations accountable for learning, not for profitability and growth. After all, the value created by a strategic experiment is primarily a function of its likelihood and speed of success (i.e., its ability to learn), not its profitability and growth during the experiment. Those metrics are better applied to existing businesses.
"The heart of 10 Rules is detailed guidance about the “organizational DNA” of the new strategic enterprise. “In the context of strategic innovation,” the authors write, “organizational DNA matters because CEOs cannot be on call to solve every problem that NewCo faces. They cannot make every decision; instead they must shape decisions by encoding assumptions, values, and decision biases into NewCo’s DNA at the time it is created.” This DNA includes the familiar elements of staff, structure, systems, and culture. 10 Rules excels in its ability to provide actionable organizational guidance for designing these elements, and for linking the assessment of the causes of problems to recommendations of solutions in the context of real cases."
Chris and I are quite happy with this assessment because, quite simply, it means that more people will read the book!
We wanted leaders to understand what makes the difference between success and failure when it comes to growth driven by strategic experimentation. Our hope is we make a difference.
The recent BusinessWeek article (October 30 2007, pp 84-92) titled Karma Capitalism asks "Has the Bhagavad Gita replaced The Art of War as the hip new ancient Eastern management?"
My Indian colleagues and I don't see it this way. This isn't a fad, or a business mantra.
What we are seeing is a new force in the history of capitalism. A capitalism which acknowledges its debt to society at large. Whatever we choose to call it, this enlightened capitalism is not going to go away. It is simply the only sustainable way forward.
In the article, I'm quoted as saying: "Karma is a principle of action. Innovation is about creating change, not reacting to change." What they didn't quote me on was dharma - the privileges, duties, conduct and obligations of the individual as a member of the community. If individuals have a responsibility to society, why shouldn't business?
Like my grandfather before me, we believe in the good in all people and have a genuine respect for the individual. Like him, we are helping leaders set their sights higher than they previously envisioned.
I've received several emails asking me about a New York Times interview on CEOs. I went back and found the article online here. The interview was conducted by William J. Holstein, editor in chief of Chief Executive magazine.
Here are the key questions:
Q. Why is the subject of innovation so hot these days?
A. In the 1990's, people were just rolling the dice and spending billions of dollars. It was reckless innovation. Post-9/11 and the dot-com bursting, people went back to cost-cutting. But now they also said, "After Act I is over, we must create growth and innovation." This time, they're saying, "We want to grow, but minimize risks and grow profitably." Innovation has come back with a different twist. It's very much on the agenda of chief executive officers. Without growth and innovation, organizations die.
Q. Is this fascination with innovation being driven by the emergence of new competitors from China and India?
A. The emergence of India and China has made innovation extremely critical. Together they are about $2 trillion in gross domestic product. That's only 5 percent of the world's G.D.P. But if these two economies grow at the rate at which the World Bank and Goldman Sachs predict, then tens of trillions of dollars worth of economic activity will be created in the next 25 years.
Q. Are larger companies a more important source of American innovation than smaller ones?
A. I would not say it is "either" or "or." We need small start-ups to continue the innovation stream. But I believe that only large companies like General Electric can solve big, complex problems, which can make a huge difference to humanity.
Q. Which are the most innovative large companies today?
A. There is no perfect example. G.E., eBay, Johnson & Johnson and 3M come to mind. This is a topic that almost every company is concerned about. When you are a large, established, tradition-bound company, to fundamentally innovate, it's not in your genes. Fundamental innovation implies that you have to selectively forget some of the things you're doing well today. That's not so easy.
Q. You say that Apple is among the best innovators in the technology world. Which other companies belong on that list?
A. Motorola. They stumbled in the 90's and missed the boat on several things. But in the past three or four years, it has regained its dominant position. A third company is Google. Some people said it was just a fad and would disappear. But they have created a whole new space and continue to change the rules of the game.
Q. The largest 500 companies in the country have been net shedders of jobs. Shouldn't they be considered consolidators, not innovators?
A. Yes and no. It is true that if you look at Fortune 500 companies, many of them have focused on cost-cutting, re-engineering and restructuring, all of which means shedding jobs. It will be a real shame if companies go bankrupt because they just simply shed jobs. The question is, how do we stop it? They have a lot of capabilities. We as a country must help these companies to maintain an innovative spirit.
Q. Say I'm the chief executive of a major company. Is there a secret to achieving innovation in my company?
A. First, strategic innovation is critical for you. Don't ignore it. In addition to continuous process improvement, focus on strategic innovation. Secondly, coming up with a new idea is only the starting point. You need to pay attention to execution of the idea.
Q. What else do I need to do?
A. You must be able to forget some of the success formula by which you are succeeding today. By definition, that's irrelevant. Secondly, you must be able to borrow one or two of the core assets of your company and lend them to the new idea.
Q. What's the final part of the challenge?
A. The new venture must learn to resolve uncertainties. There are always questions about the size of the market, what the customer needs, what the technology solutions are - these are always unknown. It's the person who resolves the uncertainties and learns the fastest who will win.
Q. Exactly who should manage the hot new idea?
A. You must hire an outsider to run the breakthrough idea because insiders are always wedded to orthodoxy and the inside success formula. You must also hire liberally from outside. Hiring from within kills breakthrough innovation. And the business should report to the C.E.O. even if it is very small. It must get the same organizational status as other business units or it is going to be suffocated.
Q. So would you say the chief executive has an important role in making breakthrough innovation possible?
A. A tremendously important role. I consider the C.E.O.'s role in the modern corporation to be building the capacity to continuously innovate in a breakthrough way. The C.E.O. doesn't create the strategy, but should be listening to the voices of people who are able to see the future. It is the role of the C.E.O. to spot and encourage them. Then, once an idea has promise, you must help build a separate organization around that person.
The Wall Street Journal recommends us in their Top 10 recommended reading. I'm surprised they list two books by certain authors, but I'm glad we're on the list:
- "Being Direct" by Lester Wunderman
- "Purple Cow" by Seth Godin
- "Waiting for Your Cat to Bark" by Bryan Eisenberg, Jeffrey Eisenberg and Lisa T. Davis
- "Call to Action: Secret Formulas to Improve Online Results" by Bryan Eisenberg and Jeffery Eisenberg
- "Tipping Point" by Malcolm Gladwell
- "Blink" by Malcolm Gladwell
- "Freakonomics" by Steven D. Levitt and Stephen J. Dubner
- "Art of the Start" by Guy Kawasaki
- "Ten Rules for Strategic Innovators: From Idea to Execution" by Vijay Govindarajan and Chris Trimble
Perhaps I ought to put down my own reading list before the summer is over. Do let us know if you have any recommendations and tell us why they're worth reading.
Stuart Crainer's article "Ideas men of India are the new superstars" in the London Times makes an interesting point: a new generation of business thinkers is emerging from India.
Why is this happening now?
As I said in the article, “I remember when I got my job at Tuck 20 years ago I was the first Indian faculty member. Now it’s not unusual to see 20 per cent of faculty with Indian roots and connection.”
But why is this flowering of ideas happening now?
On a personal level, I ask myself: "What is it that made me passionate about learning and ideas in my childhood?"
The positive experience that influenced me spanned the majority of my childhood and early adult years. I grew up in the small town of Annamalainagar in southern India. My grandfather was a very religious man, but more importantly, he was an intellectual. Before he moved to Annamalainagar, he was an advisor for the Maharajah of Mysore.
Every weekend early in the morning, my grandfather would leave our home to share ideas with an informal and ever-changing group of children. There was but one common denominator among these children: they were extremely poor and underprivileged. Sitting under a banyan tree in the center of town, my grandfather would spend hours coaching them—helping with schoolwork, planting seeds of inspiration, encouraging higher goals, and wanting them to succeed. Even though we were Brahmins belonging to the upper caste, my grandfather did not see his activities as being unusual. He believed in the good in all people and had a genuine respect for the individual.
At the time, I too didn’t understand why he was giving so much of himself. As a child, I found his behavior an inconvenience because we couldn’t eat lunch until he returned home!
I didn’t begin to appreciate the value of what he was doing until I was in my teens. Many of the children he had inspired had grown to be successful in a variety of professions. They came home just to thank him.
As I grew older, my grandfather’s work inspired me as well. Without his influence, I may not have had the courage and confidence I needed to leave the security and prestige of a top company to search for and fulfill my own ambitions.
My grandfather also shaped the way I work with corporations today. His mission in life was to make a positive difference in the lives of others.
To ensure I have the greatest opportunity for positive impact, there are four questions I continually ask myself.
First, am I passionate about what I am doing? I find that passion is contagious and is extremely powerful in influencing others.
Second, am I learning— becoming different and growing intellectually? In retrospect, I know my grandfather learned as much from his young students as they learned from him, and that learning kept him motivated and fully engaged.
Third, am I altering the aspirations of others, helping them to set their sights higher than they previously envisioned? I believe aspirations provide a guide-wire for our goals. The higher the goals, the higher are the subsequent accomplishments.
And, finally, I ask, do I respect the corporations and executives I work with? Genuine respect is a crucial source of influence, a concept my grandfather understood.
I think there is a cultural aspect to learning as well. In India learning is viewed as sacred tradition, and I believe there is a strong "learning ethic" woven through our culture and lives.
I am beginning to see this "learning ethic" much in the same way as I view the "work ethic" of the early Protestants. In part it explains the devotion of my grandfather to his students, and it explains why his actions shape my thinking to this very day.
In our book, Ten Rules for Strategic Innovators: From Idea to Execution, Chris and I made it clear that our subject was strategic innovation.
We strongly believed that there are many different kinds of innovation, and each requires a profoundly different management approach.
Here are the four fundamental categories of innovation, as described in our book:
1. Continuous Process Improvement
GE's well publicized six-sigma program made continuous improvement a household word. The focus is on incremental process innovation.
2. Process Revolutions
The implementation of new technology to create a significant improvement in process efficiency. For example, the introduction of RFID technology can dramatically improve supply chain management productivity by 30 percent.
3. Product or Service Innovations
Remember Cabbage Patch dolls, Tickle Me Elmo, and Razor scooters? Those were all product innovations- creative ideas that bring in revenue, but don't change existing business models.
4. Strategic Innovations
As described earlier, strategic innovations may include process or product innovation, but they always involve uncertain, new business models.
The cost, timeframe, and risk of each type of innovation increases as we go down this list. We encourage companies to try all four, but we chose to focus on strategic innovation because it's the key to breakthrough growth. It is through strategic innovation that companies lead change, create new lifecycle curves and alter the very nature of their industries.
Finally, the limits of innovation have less to do with creativity or technology than management skill. But that's the subject of another post.
