1. Despite the barrage of books on innovation and creativity in the past 3-5 years, and CEOs like Jeffrey Immelt getting quoted everywhere on innovation being the foremost imperative, there is an appalling level of ignorance about the basics. So, we need more of these “basic” books and more posts like yours to inspire and inform the uninitiated.

2. “Think Better” by Tim Hurson is a recent book that probably falls somewhere between your basic and advanced categories. Good examples and a structured framework that encompasses the idea generation (creative) techniques as well as the evaluation and selling phase (now understood as the equally if not more important phase, also the differentiator between practical innovation and mere creative thinking). One old book that got me interested in systematic development of creative ideas is “Brain Stretchers” by Eugene Raudsepp. While its many different categories of puzzle-like exercises are fun, the brief notes explaining the concept behind the exercises and suggestions to develop inherent creative thinking abilities are very useful. Any list of basic books on creativity must include Edward de Bono’s “Lateral Thinking” or his later more elaborate and logical exposition called, “Serious Creativity”. His other 70-odd books are less notable.

3. You could add your views to the highly reviewed “The Age of Innovation” by CK Prahalad and “The Future of Management” by Gary Hamel.

4. To gregory’s question on why the outsider would need the institution, because it is a platform. Intrapreneurs (also a title of an interesting book that introduced this new coinage) often move companies when they perceive constraints to continue doing their innovation stuff (e.g. Evan Williams moving out after Google bought Blogger). Not all creative and innovative outsiders would want to take on all aspects of starting a business.

5. As new and innovative startups grow and succeed, they find it difficult to sustain the intellectually stimulating environment that led to their existence in the first place. The same insularity that makes market leading companies get “disruptively out-innovated” seems to afflict the top management of organizations. Beyond a certain level in any organization, the subtle incentives to align and conform are too strong, stronger than any explicit incentive schemes. I believe enlightened leaders should therefore permit some amount of “underground skunkwork projects” where the on-the-ground and usually younger folk can bring in fresh perspectives but may be unable to sell it all the way upwards.

You’re right that quitting early is the biggest failure mode though. Seth Godin’s The Dip is a nice treatment. But one of the things that

yes, elephants can dance. Like you said, they can move mountains and make things happen. However, they will do so only when there is an absolutely clear and unmistakable signal to move in that direction. Like a committed customer. Or as a second mover in a space which has already been validated by someone.

The other type – the one where there is no clear voice from the sky giving you directions – is very vulnerable to being destroyed by the internal structural friction.

You’re right that both external/customer/stock market and the internal-friction views are complementary. One keeps you going in the same direction you were going and the other acts as a powerful antibiotic which discourages any nascent straying efforts. It’s a deadly combination.

Overcoming this phenomenon (internally, without a spinoff) requires a strong, committed, visionary leader – someone who can figure things out by himself, and believes in it in spite of the surge and ebb of the fashions of technology. I’ve seen too many ideas fail not because they were bonkers, but simply because they were given up on too early.

Tubelite: interesting, you are coming up with an alternate causation pattern for disruptive innovation. Where Christensen placed the blame on the carrot/stick dynamics of a mature company with respect to its most important customers and Wall Street, you are placing the blame on structural friction effects as well as incentive misalignment.

I think there is truth to both the customer-signal view and your internalist view. If you propose a new product/innovation idea that’s bang-on with respect to what your top customers are demanding, the company will typically move mountains and build in all sorts of capacitances to weather quarterly and business cycle weather effects and get your idea to market. In this category, there is career risk to NOT championing the idea, even if it is technologically very risky, because somebody will, or the competition will, and then the internal/external relationship ground shifts under you. If you go too long without taking risks in the ’sustaining innovation’ direction (whether incremental or radical), you’ll be marginalized.

When it comes to disruptive innovation, yes, the system is unlikely to work. That’s why Christensen too suggested that the spin-off model (either captive, like IBM’s PC division, or the full spin-offs from Xerox PARC) was the only workable way if the existing value chain was optimized for delivering different types of value to different markets.

The last part of what you are saying is almost word-for-word the ‘open innovation’ gospel of Henry Chesbrough & co, and has already been put in practice in modest ways at lots of companies.

But the one part of what you are saying that has NOT been adequately addressed, is the incentive mis-alignment. There is not an enough of an ‘upside sharing’ incentive infrastructure. To the extent that companies have stock options type mechanisms, they are linked more to seniority than performance, and within performance, more to relative ‘bell curve’ grading against peers than actual contribution.

This is partly for practical reasons. Say I come up with a great idea and write up an anchor patent application that goes on to create a billion dollar line of business. It is VERY hard to tease apart the contributions both ex-ante and ex-post. Clearly, the billion dollar line of business could not have come about without the contributions of a huge number of other people. Equally clearly, the privilege of being immersed in an intellectually stimulating environment was a large part of the causal forces that probably drove the ideation in the first place, including probably dozens of sub-citation-level influences from hallway conversations.

That said, the current incentive schemes could probably be rewired to benefit the risk-takers more, but that is so phenomenally hard to do that I have to agree with you… most people will not pursue their truly high-risk, high-return ideas in an employed context. They will file them away in a mental ’startup dreams’ folder. Those with no inclination to be startup types will toss the ideas away as ’screw it, never gonna get an opportunity to pursue this.’

Well… it’s not going to work. Most of the time, anyway.

First, large tech companies are in the grips of what I call the quarterly manic-depressive cycle. A few million lower, miss the guidance, and it’s the ritual blood sacrifice to appease the high priests of Wall Street. A few million higher and the smiles break out, the expense budgets balloon and next quarter, you’re again in the depressive phase. A related phenomenon is the annual (or semi-annual, or quarterly) reorg-o-round.

Secondly, large companies tend to be run by policy. Delegation doesn’t happen as much as it should. The empires of old vested significant powers in the regional governors. Communication latencies were such that a governor couldn’t email the emperor about fine points of casual Friday attire. Lightspeed communication, a tendency to CYA, and a reluctance to ask for policy exceptions, ensures that “one-size-fits-all” policies prevail even in situations where common sense would indicate otherwise.

Thirdly, collaboration across groups is difficult because of crude and inefficient trading mechanisms, mirroring the worst features of traditional government departments. At the same time, a new product group can’t just, for instance, go and hire a sales and marketing team, or a QA team. It’s got to “work across silos”, which means convincing the S&M chaps to give you some bandwidth, with little by way of currency or barter which you can use. Even when you do make a deal, it’s difficult to ensure priority inheritance.

These factors make it difficult to sustain an initiative over the one or two years of gestation, followed by the two or three or even more years until it starts making serious money. Sometimes a product which has been given up for dead suddenly sees an uptrend in revenue, years after it was released, coinciding with the disbanding of the team.

I’ve saved the most important point for last: there’s simply not enough upside for the people involved in the new product. If it succeeds, the best they can hope for is maybe a 20-30% bonus. If it fails – and the failure coincides with a depressive phase, which may in fact be the reason for the closure – there are unlikely to be open positions anywhere else in the organization. So the downside is the same as that of a startup – you’ll be out of a job. Startup success, however, has a much larger potential upside. It’s pretty clear where yon Cassius, of the lean and hungry look, is going to be headed, and where the men who are fat and contented are going to put up their tents.

That’s why I like the spin-off idea. The parent company forks off a child, gives it seed money, takes a significant stake and then gets out of the way. The spinoff is free of the policy constraints, financial and business cycles and matrix management overheads of the parent. It can hire and execute at will. The spinoff also has the right, but not the obligation, to use any of the IP of the parent. This can give a tremendous boost to the maturity and time-to-market of the new product, and also provide a protective IP shield. In spite of open source, there are still a number of useful things which big companies have cached away; things which have been beaten into shape with years of grunt work, motivated by customers with sharp sticks and million-dollar support contracts. The parent company gets an “outsider” to look at its entire IP portfolio and come up with winning combinations, with a higher chance of success than insiders trying to “integrate across silos”. Moreover, a future re-absorption is much more likely to be successful than acquiring J. Random Startup, because of fewer integration issues, pre-shared philosophies and a better fit in the product portfolio.

in short, life happens a bit out front in time from the pov of the subtle body.. intuition is an example …

and here is some social history about this current time .. psychics and gurus have been talking about this decade for thirty years, the changes that are happening … futurists, for twenty years …. strategic edge economists for ten years … your basic tuned in intelligent guy, for about 5 years, … and wall street and the politicians still don’t get it

bright guys have know the american automobile industry has been dying for thirty years, the companies themselves are the last to know…

so, your point is pretty well known, at least by outsiders…. who also recognize that institutions are into maintaining, after a certain size, and real innovators simply wont be found in such places.

smart stuff … my only question is, i can see why the institution needs the outsider, but why would the outsider need the institution?

Most government organisations I know seem to be persisting with the idea that they can design a square wheel that will work better than the round one those nasty people built.

Power is everything and on occasion it seems to be in the wrong place. Voters are lethargic ; bureaucrats peddle furiously.

Innovators – outside or in – make changes. I agree with you that on the outside they have an environment that will foster more innovation.

Alex