As in forgetting is a vital business requirement for successful strategic innovation. The idea is from one of the best business books I’ve read in a long time – about an area that fascinates me: the process of strategic innovation.
It’s that time of year when a lot of top 10 lists get written and talked about as we wrap up last year and embark on this year’s new journey. In a new book by Vijay Govindarajan and Chris Trimble, these two authors explore a new list of 10 rules that they say are required for successful strategic innovation – not in the entrepreneurial context (although many of the 10 rules also apply to raw startups) but primarily in the real audience for this book: CEOs and senior executives of major companies who continue to struggle with developing their next growth step. Govindarajan is a professor of international business at the Tuck School of Business at Dartmouth and Trimble is an adjunct associate professor at Tuck and a senior fellow at Katzenbach Partners.
Why forgetting? It’s actually both forgetting and borrowing that the authors identify as foundation elements for strategic innovation to be possible. Strategic innovation requires setting aside – forgetting – the existing assumptions, mind sets and biases of management while borrowing to get access to resources of real value. Indeed, having this access to valuable assets – customer relationships, distribution and supply, brands, credibility, etc. – is one of the more important advantages an innovation effort inside a big company has over a startup. But, of course, the trick is in borrowing those assets while being able to ignore (forget) the dogma that has evolved as those assets were actually created.
For me, Govindarajan and Trimble’s articulation of these foundation elements has a relationship to the disruptive innovation cycle that Clayton Christensen has written about so well. Forgetting means ignoring the requirements of the company’s best customers – which, of course, is precisely where big company’s stay focused. Borrowing means using access to those best customers when appropriate – for presenting them with new solutions but precisely not for capturing their requirements. Some very nice parallels between the two ideas – with G&T being more prescriptive with their specific recommendations for big company strategic innovation efforts.
Enforcing the rule of forgetting leads directly to another of the top 10 rules: the NewCo organization must be built from scratch and staffed with new people from outside the organization. In my experience, this is one of the toughest challenges for a CEO to work through – as the normal approach is to pick from among the best of the company’s current leaders and to “award” the new opportunity to that person. Bringing in outsiders is a bold move that runs some serious cultural risks – but the authors emphasize the importance of that being part of the company’s DNA and how “rewards” have to be approached differently to break with the past and increase the probability of successful strategic innovation.
Today’s New York Times Business section has an interview with Vijay Govindarajan by William J. Holstein, editor in chief of Chief Executive magazine. In one of his answers, Govindarajan emphasizes another on of the top 10 rules: to avoid suffocation, the new business must report directly to the CEO. Again, in my experience, most CEOs just can’t think of it being done this way. They’ve got their senior team who have been with them for a while, are loyal, deserve great opportunities, etc. Bringing in an outsider who’s separate but equal and who’s not “paid his (or her) dues” is a very challenging cultural dynamic to overcome. It’s here that startups have such a great advantage – it’s easy to ignore that senior team because they don’t yet exist and there aren’t any loyalties to be honored or rewarded!
I made the comparison earlier between some aspects of G&T’s work in this book and the earlier work of Clayton Christensen. While the themes are similar, the practical advice and extensive use of case examples really resulted in my respect for this new work. It’s very well done and should be read and re-read by senior managers as they struggle with how best to enable successful strategic innovation in their midst. Highly Recommended!
Ten Rules for Strategic Innovators: From Idea to Execution by Vijay Govindarajan, Chris Trimble. 224 pages. Published by the Harvard Business School Press. ISBN: 1591397588