Book Review: Innovation - The Five Disciplines for Creating What Customers Want

Jim Taggart joins us again to share his thoughts on leadership with our readers.  This post originally appeared on Jim's blog 'Changing Winds', and appears here in its entirety.

Jim is a leading thinker on the topics of leadership and organizational development. You can visit his website at www.leadershipworldconnect.com and read his e-book, 'Becoming a Holistic Leader'.

- Alcide

I’m a human sponge when it comes to trying to understand what’s taking place in the world. I’m especially interested in competitiveness issues and where leadership AND management fit in as essential cornerstones to enabling companies to thrive in uncertainty and volatility. I try to synthesize what I read, integrating it with my work and life experiences.

During my recent trip through New England I made a point of stopping at a number of bookstores. Ever on the look-out for books with a new angle or perspective, I found one in North Conway, New Hampshire: Innovation: The Five Disciplines for Creating What Customers Want. Co-written by Curtis R. Carlson (President and CEO of SRI International) and William W. Wilmot (director of the Collaboration Institute) in 2006, this book is a knock-out because of its very straight-forward advice for companies on how to create a thriving innovation environment. It’s loaded with relevant examples and the experiences of the two authors. Carlson and his team, for example, were awarded an Emmy for their work which led to the U.S. standard for HDTV.

In today’s post I briefly state their Five Disciplines, along with their key observations, intermingling some of my own thoughts. I worked in the areas of science, technology and innovation policy for many years and believe very firmly in their vital roles in contributing to a nation’s wealth.

The first thing that I like about this book, and which caught my eye upon starting it, is the authors’ definition of innovation. I’ve read more definitions of innovation over the years than I can count, some of which were so verbose that by the time I finished reading them I forgot where I started. Here’s what Carlson and Wilmot say about innovation:

Innovation is the successful creation and delivery of a new or improved product or service in the marketplace.

Succinctness is indeed a virtue.

An underlying theme in their book is creating “value” for the customer. This is, in my view, the most important message they convey, one that I constantly strived for when working in and managing service branches, and now as a blogger. No value for your customers? You’re toast in the marketplace.

I’ve talked in previous posts about the rise of emerging economies (though I no longer feel that the expression fits), such as India, China, South Korea, Brazil, Israel and Taiwan. Curtis and Wilmot focus more on India and China as frequent references; however, their point is well taken when they state: “…the ability to innovate is moving to center stage as a survival issue for most countries and a competitiveness issue for most nations.”

For me, at the heart of this global transformation is how hungry new competitors are in their aggressive approaches to grabbing market share. I’ve mentioned in an earlier post that my oldest daughter, an experienced elementary school teacher, began her teaching career in South Korea. Her students began their English lessons in late afternoon, after a full school day, studying with Amanda until late evening. That’s hunger. That’s commitment. Which leads to success.

Why were their parents pushing their kids? Because they wanted them to be admitted to American universities. Being able to speak English was their ticket to success, along with being technically competent.

I chuckled when I read in Innovation that in India and China students are streamed into the sciences and engineering, in contrast to America and Canada where students aim towards business, the Arts and Law. How true.

Yes, I know the mantra about receiving a comprehensive education. I’m a dude with a BA and two MAs. But that was then. This is now. As the authors note, all you need now to do knowledge work is well educated people and a high speed connection to the Internet. Developed countries with a fascination for call centers, take heed. Your world is changing.

As a sidebar, the September 11, 2010 issue of The Economist has a short article on where countries stack up when it comes to where college-educated grads (25-34) are working. Next to Spain, Canada has the highest percentage (of total grads) working in low-skill jobs. The United States is not far behind. Surely not something to brag about.

I’ve read about the Indian Institute of Technology, the most difficult university on the planet to which to be admitted. Imagine this: only 2.3% of applicants are admitted; Harvard, Yale, MIT and the rest are second choice for Indians.

How about this when it comes to absolute numbers, which is what matters in a global labor market (not percentages): a few years ago Indian-based Infosys ran ads to hire 10,000 workers. Over ONE MILLION people applied! One job per hundred applicants! That’s hunger.

So let’s look at the Five Disciplines put forward by Curtis and Wilmot, and what they offer to assist American and Canadian companies to become more globally competitive.

Discipline #1: Important Needs

• Don’t concentrate on what you believe is important (or cool) but what’s actually vital to your customer.
• Employees need to be aligned with the “criteria” used to define the key needs of customers.
• When approaching a new market opportunity, two essential criteria are: a) not being overrun by other unexpected developments, and b) ensuring that the opportunity remains feasible.

Three important questions to ask yourself are:

1. Is my work on innovation activities making a discernable difference for my customers?
   This is the “so-what” question, or what I would say strips away the façade of your efforts. Does anyone care?
2. Is your work on innovation aligned with the goals of your organization? 
   If you’re not in synch with your organization, don’t expect it to support your efforts. Either align your activities or exit what you’re doing.
3. The you willing to commit to your innovation activities? 
   This means ensuring that your project has criteria that clearly state what are the key customer and market needs. It’s all about customer value.

Discipline #2: Value Creation

• As the authors express: “If you can’t state your value proposition, you don’t understand your job.” How true.
• They present their NABC approach: Need for the customer, Approach to making it available, Benefits for the customer, Costs based on return of investment for investors.
• This again raises the critical importance of value proposition: specific, quantitative and illustrative.
• Your value proposition needs to be a one minute elevator pitch. Know it. Memorize it.

Discipline #3: Innovation Champions

• Each and every innovation requires a champion.
• A champion who identifies with the customer, and who attends to such issues as funding, politics (I would add the word ‘organizational’ to clarify this), human resources, technology and bureaucracy.
  Note: I understand what the authors are saying, but based on my experiences in working with senior corporate leaders on large change management projects, a champion is in short a barrier-buster. They deal not just with the above bullet point but also, for example, with unions and other stakeholders (e.g., suppliers) and how to enroll them in the change effort.
• A true champion is passionately committed; they’re builders with a clear vision who inspire others to collaborate.
• Some of the key traits of an effective champion include:

- Superior listening skills
- Learn from their mistakes
- Surrounds herself with enthusiastic people
- Share credit by thanking the thinkers and the participants
- Trust the process

Discipline #4: Innovation Teams

• Collaboration is the “fuel for the innovation engine.”
• Not only is collaboration powerful but it’s the only true effective way to pull together the needed diverse skills to solve complex problems.
• Collaboration may be viewed as a three-legged stool: a) shared vision, b) unique complementary skills, c) shared rewards, based on real accomplishment
• A shared vision” is the magnet that pulls people forward towards a common cause. But to do this, the authors quote well-known business author Jim Collins: “Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.”
• People change based on DNA: Desire to change, New Vision of where to go, Action Plan of how to get to the vision.
• A quick check-list for your team:

- Does each member share the vision?
- Does each member have a unique, complementary role?
- Does the team share rewards?
- Does each member practice respectful communication?

Discipline #5: Organizational Alignment

• The authors state upfront that innovation best practices can be applied effectively at the team level. Top management does not have to bless such practices.
• Two key concepts come into play: 1) create and deliver the highest possible customer value, 2) use innovation best practices to achieve this value.
• When you’ve achieved alignment, this means you’ve obliterated the barriers that were impeding you from your goals.
• The authors take an opposing stand on organizational cultural change. As they bluntly assert: “We never talk about changing culture.” The goal is to “…deliver superior results.”

Note: When I read this section of their book, what struck me was that they’re talking essentially about self-empowerment. Don’t ask permission; do what’s right for the customer.

Carlson and Wilmot present seven essential elements to achieving organizational alignment:

1. Shared vision, strategy, values, goals
2. Commitment to delivering superior value to customers
3. Commitment to continuous improvement processes using innovative best practices
4. Creation of innovative organizational structures and processes
5.  Organizational transparency (e.g., communication and knowledge)
6.  Shared recognition and rewards
7. Commitment by the CEO and the senior management team

Watch this 10 minute interview (2009) with Curtis Carlson at Suffolk University’s Sawyer Business School, in which he talks about innovation, collaboration, finding solutions for customers, challenges and the numerous opportunities in the global marketplace.

Innovation is an outstanding book. Seldom have I read a book that encompasses the conceptual and the practical and which is so relevant to today’s competitive and volatile environment. Check it out. You won’t be sorry.

So where do leadership and management fit in? Innovation is not a book explicitly about leadership. However, it’s clearly one that speaks to leaders throughout organizations on how and why they must pay close attention to the needs of their customers and to strive to continually improve their products and services, along with creating new ones.

Those who stay on the cusp of change, who thrive on riding the wave, will be the successful innovators. Are YOU ready to ride the wave?

Jim Taggart has been a student of leadership for 20 years, devoting over a decade to applied work in leadership development, organizational learning, and team building. Jim is a recognized thought leader, resulting from his extensive work on leadership, teamwork and organizational cultural change, as well as initiating and leading many change management projects.

He is also an economist, and has conducted research on labor market, competitiveness and innovation issues. Of special interest is understanding the interface between competitive global pressures and how leadership and management are practiced at the organization level. He holds Masters in economics and leadership and organizational learning.

Jim and his wife, Sue, have four adult children and two granddaughters. They live in Ottawa, Canada.

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