- Email: [email protected]
Radical Innovation: How Mature Companies can Outsmart Upstarts
706
Book review / Technovation 21 (2001) 705–707
Champions of Change: How CEOs and their Companies are Mastering the Skills of Radical Change David A. Nadler; Jossey-Bass Publishers, San Francisco, USA, Price US$27 Many management books begin with the reminder that historically, change is the one true constant and lies at the heart of successful organisations. Indeed, some assert that management and change are synonymous and liken it to travel; you need to know the purpose of the journey, how you are going to get there and with whom. To a great extent these facets of change management are, in Nadler’s book, unspoken givens. But unlike many of its predecessors, which rely heavily on theory, this book seeks to capture the reality of change in large, complex contemporary organizations. From the beginning Nadler takes a very practical stance confronting the reader with three very dramatic but authentic examples of major change programmes in large organisations of which, he tells us, he or his colleagues have had first hand experience. In his attempt to tell it ‘as it is’ Nadler presents a view of change from the perspective of top leadership. This is perhaps very appropriate for his core thesis is that successful change management is all about the involvement of the CEO— not only must he support the change but must be seen to be “leading the charge” and seizing every opportunity to demonstrate that nothing on his agenda is more important. Perhaps the weakness of the book is that this message does not come as a surprise to many academics or consultants working in this area. The strength lies in the way Nadler offers solutions for dealing with the change
process. We are quickly given to understand that the change process cannot be dealt with by use of formulae, it defies rigid academic models. Stating the “truth” that change is inherently messy and complicated, intensely personal and enormously political because it revolves around human behaviour, provides the jumping off point that allows Nadler to offer up his solutions. The book falls into three sections. The first section, chapters 1–5, covers an overview of the forces for change and the pivotal role of the CEO, presents an approach to understanding organisational behaviour and change, discusses types of change and barriers to change. The second section, chapters 6–12 outlines the tools and techniques required as the organisation passes through the five phases of the change cycle and the issues confronting leaders of change in each component of the organisation, which Nadler identifies as its strategy, its formal structures and work processes, its operating environment and its people. In the third section, chapters 13 and 14 focus on the role of top managers in leading change and a set of guiding principles are offered. This is a well written, informative book and its enthusiasm makes it an enjoyable read, eminently accessible to both practitioners and academics alike. To a certain extent it tells us things we already know, but the way they are pulled together with illuminating practical examples interweaved with theory, tools and techniques gives it a refreshing originality. Sandra Meredith Centre for Research in Innovation Management University of Brighton Brighton, BN1 9PH, UK E-mail address: [email protected]
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 4 2 - 6
Radical Innovation: How Mature Companies can Outsmart Upstarts Richard Leifer, Christopher McDermott, Gina O’Connor, Lois Peters, Mark Rice and Robert Veryzer; Harvard Business School Press, 2000, ISBN 1-57851-903-2 There is often a risk that we think of innovation as a single activity which the firm has to manage rather than a complex interactive process. The problem with such limited views is that we then use such partial mental models to help us design the structures and procedures for managing innovation—with less than successful results. So, for example, if we see innovation as being primarily about coming up with bright ideas we run the risk of putting all our energies into idea generation, R&D and other ‘front-end’ activities without taking into account the very important flip side of the coin which is the demand for such innovations.
Equally concentrating all our efforts on hearing and understanding what users want runs the risk that we will end up following them in the new products and services which we create—even then they don’t know where they are going! Many variations exist of this theme of partial management and one of particular interest is dealt with in this book. It takes as its starting point the view that organisations need to be concerned with two fundamentally different types of innovation—that which is primarily concerned with ‘doing what we do better’ and that which is involved with totally new things. Their argument is that what works for one— in terms of organizational structures and routines—many not be the best solution for dealing with the other. In particular, dealing with radical innovation may require a fundamentally different approach—otherwise there is a real risk that the organization may fail to innovate or if it does try will stifle the nascent radical new ideas.
Book review / Technovation 21 (2001) 705–707
The book is based on a major research programme originating from Rensselaer Polytechnic in the USA and focused on the experiences of 10 major firms (including Air Products, Ford, 3M, Alcoa, Mitsubishi, Lucent and Kodak) in their attempts to launch radical innovations. The authors define their terms at the outset—by radical they mean a significantly different step from current offerings—for example: 앫 A product/service offering an entirely new set of performance features 앫 Improvement in known performance features of 5 times or greater 앫 A significant (30% or greater) reduction in cost A strength of the book is the extensive use of case examples drawn from the company studies. Most of these are not instant success stories but illustrate the particular difficulties of managing projects which are often very high on risk and uncertainty and where issues like mobilizing political support and being extremely creative in acquiring—and definding—resources are relevant. The book is structured around seven core challenges in managing radical innovation: 앫 앫 앫 앫 앫
Managing radical innovation projects Learning about markets for radical innovations Resolving uncertainty in the business model Bridging resource and competency gaps Accelerating the transition from radical innovation projects to operating status 앫 Engaging individual initiative Each of these is characterized by requiring a different response to the one the organization would normally deploy for projects—for example, conventional market
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 4 3 - 8
707
research techniques may be inappropriate for exploring markets for a completely new concept—users may simply not understand what they are being asked about. It is this character of working close to the edge which is the book’s strength. As with Clayton Christensen’s ‘Innovator’s dilemma’ and Gary Hamel’s ‘Leading the revolution’ it offers a glimpse of the real challenges which many managers confront once they have mastered the ‘basics’ of technology management. This book does not argue that we don’t need project management or market research—but rather that different kinds of innovation require very different ways of dealing with these issues. It is well-written and structured and the case studies give a sense of reality—a bit like war correspondents sending back dispatches from a continuously moving front line. I suspect many practising managers will engage with these with more than a passing sense of recognition! Perhaps one of the weaknesses of the book is that it tends to read a little prescriptively for a phenomenon which almost certainly needs further study. Certainly the advice the authors offer in each chapter is sensible and there are plenty of illustrations about how some firms have tried to deal with the challenges raised—but occasionally I had the sense that there is still enormous room for exploration and experimentation. The difficulty for most firms is likely to be implementing their—or other—prescriptions inside a traditional structure. The book also contains a helpful appendix on different models for corporate venturing—although whether this ‘intrapreneuring’ is viable in many cases is a moot point. It may well be that creating an entirely new form or division is the best approach to creating the very different conditions under which radical innovation might thrive. John Bessant CENTRIM, University of Brighton UK E-mail address: j.bessant얀brighton.ac.uk
Book review / Technovation 21 (2001) 705–707
Champions of Change: How CEOs and their Companies are Mastering the Skills of Radical Change David A. Nadler; Jossey-Bass Publishers, San Francisco, USA, Price US$27 Many management books begin with the reminder that historically, change is the one true constant and lies at the heart of successful organisations. Indeed, some assert that management and change are synonymous and liken it to travel; you need to know the purpose of the journey, how you are going to get there and with whom. To a great extent these facets of change management are, in Nadler’s book, unspoken givens. But unlike many of its predecessors, which rely heavily on theory, this book seeks to capture the reality of change in large, complex contemporary organizations. From the beginning Nadler takes a very practical stance confronting the reader with three very dramatic but authentic examples of major change programmes in large organisations of which, he tells us, he or his colleagues have had first hand experience. In his attempt to tell it ‘as it is’ Nadler presents a view of change from the perspective of top leadership. This is perhaps very appropriate for his core thesis is that successful change management is all about the involvement of the CEO— not only must he support the change but must be seen to be “leading the charge” and seizing every opportunity to demonstrate that nothing on his agenda is more important. Perhaps the weakness of the book is that this message does not come as a surprise to many academics or consultants working in this area. The strength lies in the way Nadler offers solutions for dealing with the change
process. We are quickly given to understand that the change process cannot be dealt with by use of formulae, it defies rigid academic models. Stating the “truth” that change is inherently messy and complicated, intensely personal and enormously political because it revolves around human behaviour, provides the jumping off point that allows Nadler to offer up his solutions. The book falls into three sections. The first section, chapters 1–5, covers an overview of the forces for change and the pivotal role of the CEO, presents an approach to understanding organisational behaviour and change, discusses types of change and barriers to change. The second section, chapters 6–12 outlines the tools and techniques required as the organisation passes through the five phases of the change cycle and the issues confronting leaders of change in each component of the organisation, which Nadler identifies as its strategy, its formal structures and work processes, its operating environment and its people. In the third section, chapters 13 and 14 focus on the role of top managers in leading change and a set of guiding principles are offered. This is a well written, informative book and its enthusiasm makes it an enjoyable read, eminently accessible to both practitioners and academics alike. To a certain extent it tells us things we already know, but the way they are pulled together with illuminating practical examples interweaved with theory, tools and techniques gives it a refreshing originality. Sandra Meredith Centre for Research in Innovation Management University of Brighton Brighton, BN1 9PH, UK E-mail address: [email protected]
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 4 2 - 6
Radical Innovation: How Mature Companies can Outsmart Upstarts Richard Leifer, Christopher McDermott, Gina O’Connor, Lois Peters, Mark Rice and Robert Veryzer; Harvard Business School Press, 2000, ISBN 1-57851-903-2 There is often a risk that we think of innovation as a single activity which the firm has to manage rather than a complex interactive process. The problem with such limited views is that we then use such partial mental models to help us design the structures and procedures for managing innovation—with less than successful results. So, for example, if we see innovation as being primarily about coming up with bright ideas we run the risk of putting all our energies into idea generation, R&D and other ‘front-end’ activities without taking into account the very important flip side of the coin which is the demand for such innovations.
Equally concentrating all our efforts on hearing and understanding what users want runs the risk that we will end up following them in the new products and services which we create—even then they don’t know where they are going! Many variations exist of this theme of partial management and one of particular interest is dealt with in this book. It takes as its starting point the view that organisations need to be concerned with two fundamentally different types of innovation—that which is primarily concerned with ‘doing what we do better’ and that which is involved with totally new things. Their argument is that what works for one— in terms of organizational structures and routines—many not be the best solution for dealing with the other. In particular, dealing with radical innovation may require a fundamentally different approach—otherwise there is a real risk that the organization may fail to innovate or if it does try will stifle the nascent radical new ideas.
Book review / Technovation 21 (2001) 705–707
The book is based on a major research programme originating from Rensselaer Polytechnic in the USA and focused on the experiences of 10 major firms (including Air Products, Ford, 3M, Alcoa, Mitsubishi, Lucent and Kodak) in their attempts to launch radical innovations. The authors define their terms at the outset—by radical they mean a significantly different step from current offerings—for example: 앫 A product/service offering an entirely new set of performance features 앫 Improvement in known performance features of 5 times or greater 앫 A significant (30% or greater) reduction in cost A strength of the book is the extensive use of case examples drawn from the company studies. Most of these are not instant success stories but illustrate the particular difficulties of managing projects which are often very high on risk and uncertainty and where issues like mobilizing political support and being extremely creative in acquiring—and definding—resources are relevant. The book is structured around seven core challenges in managing radical innovation: 앫 앫 앫 앫 앫
Managing radical innovation projects Learning about markets for radical innovations Resolving uncertainty in the business model Bridging resource and competency gaps Accelerating the transition from radical innovation projects to operating status 앫 Engaging individual initiative Each of these is characterized by requiring a different response to the one the organization would normally deploy for projects—for example, conventional market
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 4 3 - 8
707
research techniques may be inappropriate for exploring markets for a completely new concept—users may simply not understand what they are being asked about. It is this character of working close to the edge which is the book’s strength. As with Clayton Christensen’s ‘Innovator’s dilemma’ and Gary Hamel’s ‘Leading the revolution’ it offers a glimpse of the real challenges which many managers confront once they have mastered the ‘basics’ of technology management. This book does not argue that we don’t need project management or market research—but rather that different kinds of innovation require very different ways of dealing with these issues. It is well-written and structured and the case studies give a sense of reality—a bit like war correspondents sending back dispatches from a continuously moving front line. I suspect many practising managers will engage with these with more than a passing sense of recognition! Perhaps one of the weaknesses of the book is that it tends to read a little prescriptively for a phenomenon which almost certainly needs further study. Certainly the advice the authors offer in each chapter is sensible and there are plenty of illustrations about how some firms have tried to deal with the challenges raised—but occasionally I had the sense that there is still enormous room for exploration and experimentation. The difficulty for most firms is likely to be implementing their—or other—prescriptions inside a traditional structure. The book also contains a helpful appendix on different models for corporate venturing—although whether this ‘intrapreneuring’ is viable in many cases is a moot point. It may well be that creating an entirely new form or division is the best approach to creating the very different conditions under which radical innovation might thrive. John Bessant CENTRIM, University of Brighton UK E-mail address: j.bessant얀brighton.ac.uk