HBR's 10 Must Reads on Innovation Quotes

“The climate for relationships within an innovation group is shaped by the climate outside it. Having a negative instead of a positive culture can cost a company real money. During Seagate Technology’s troubled period in the mid-to-late 1990s, the company, a large manufacturer of disk drives for personal computers, had seven different design centers working on innovation, yet it had the lowest R&D productivity in the industry because the centers competed rather than cooperated. Attempts to bring them together merely led people to advocate for their own groups rather than find common ground. Not only did Seagate’s engineers and managers lack positive norms for group interaction, but they had the opposite in place: People who yelled in executive meetings received “Dog’s Head” awards for the worst conduct. Lack of product and process innovation was reflected in loss of market share, disgruntled customers, and declining sales. Seagate, with its dwindling PC sales and fading customer base, was threatening to become a commodity producer in a changing technology environment. Under a new CEO and COO, Steve Luczo and Bill Watkins, who operated as partners, Seagate developed new norms for how people should treat one another, starting with the executive group. Their raised consciousness led to a systemic process for forming and running “core teams” (cross-functional innovation groups), and Seagate employees were trained in common methodologies for team building, both in conventional training programs and through participation in difficult outdoor activities in New Zealand and other remote locations. To lead core teams, Seagate promoted people who were known for strong relationship skills above others with greater technical skills. Unlike the antagonistic committees convened during the years of decline, the core teams created dramatic process and product innovations that brought the company back to market leadership. The new Seagate was able to create innovations embedded in a wide range of new electronic devices, such as iPods and cell phones.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“The problem in both cases can be attributed to poor connections between the greenfield and the mainstream. Indeed, when people operate in silos, companies may miss innovation opportunities altogether. Game-changing innovations often cut across established channels or combine elements of existing capacity in new ways. CBS was once the world’s largest broadcaster and owned the world’s largest record company, yet it failed to invent music video, losing this opportunity to MTV. In the late 1990s, Gillette had a toothbrush unit (Oral B), an appliance unit (Braun), and a battery unit (Duracell), but lagged in introducing a battery-powered toothbrush.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Strategy Lessons • Not every innovation idea has to be a blockbuster. Sufficient numbers of small or incremental innovations can lead to big profits. • Don’t just focus on new product development: Transformative ideas can come from any function—for instance, marketing, production, finance, or distribution. • Successful innovators use an “innovation pyramid,” with several big bets at the top that get most of the investment; a portfolio of promising midrange ideas in test stage; and a broad base of early stage ideas or incremental innovations. Ideas and influence can flow up or down the pyramid.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Three additional sources of opportunity exist outside a company in its social and intellectual environment: demographic changes, changes in perception, and new knowledge.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Four such areas of opportunity exist within a company or industry: unexpected occurrences, incongruities, process needs, and industry and market changes.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“At the heart of that activity is innovation: the effort to create purposeful, focused change in an enterprise’s economic or social potential.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“By definition, new ventures call for a company to envision what is unknown, uncertain, and not yet obvious to the competition. The safe, reliable, predictable knowledge of the well-understood business has not yet emerged. Instead, managers must make do with assumptions about the possible futures on which new businesses are based. New ventures are undertaken with a high ratio of assumption to knowledge. With ongoing businesses, one expects the ratio to be the exact opposite. Because assumptions about the unknown generally turn out to be wrong, new ventures inevitably experience deviations—often huge ones—from their original planned targets. Indeed, new ventures frequently require fundamental redirection. Rather than trying to force startups into the planning methodologies for existing predictable and well-understood businesses, discovery-driven planning acknowledges that at the start of a new venture, little is known and much is assumed. When platform-based planning is used, assumptions underlying a plan are treated as facts—givens to be baked into the plan—rather than as best-guess estimates to be tested and questioned. Companies then forge ahead on the basis of those buried assumptions. In contrast, discovery-driven planning systematically converts assumptions into knowledge as a strategic venture unfolds. When new data are uncovered, they are incorporated into the evolving plan. The real potential of the venture is discovered as it develops—hence the term discovery-driven planning. The approach imposes disciplines different from, but no less precise than, the disciplines used in conventional planning.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“She built a close-knit team of talented people who bonded with one another and felt passion for the mission. Soon her group became one of the parent bank’s most desirable places to work. She developed strong relationships with senior executives who helped her deal with tensions in the middle, and she communicated well and often about why her unit needed to be different. Her creativity, vision, teamwork, and persistence helped this group succeed and become a national role model, while other banks’ efforts faltered.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Flexible organizational structures, in which teams across functions or disciplines organize around solutions, can facilitate good connections. Media conglomerate Publicis has “holistic communication” teams, which combine people across its ad agencies (Saatchi & Saatchi, Leo Burnett, Publicis Worldwide, and so on) and technology groups to focus on customers and brands. Novartis has organized around diseases, with R&D more closely connected to markets and customers; this has helped the company introduce pathbreaking innovations faster, such as its cancer drug Gleevec. The success of Seagate’s companywide Factory of the Future team at introducing seemingly miraculous process innovations led to widespread use of its core-teams model.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“independent of the normal planning and budgeting processes, to allow bottom-up ideas to flourish. “No one has ever before brought together such a global and diverse set of business thought leaders on this scale to discuss the most pressing issues and opportunities of our age,” says Nick Donofrio, IBM’s executive vice president of innovation and technology. “We have companies literally knocking at the door and saying, ‘Give us your best and brightest ideas, and let’s work together to make them a reality.’ It’s a golden opportunity to create entirely new markets and partnerships.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“One way to encourage innovation to flourish outside the normal planning cycles is to reserve pools of special funds for unexpected opportunities. That way, promising ideas do not have to wait for the next budget cycle, and innovators do not have to beg for funds from mainstream managers who are measured on current revenues and profits.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Companies can develop an innovation strategy that works at the three levels of what I call the “innovation pyramid”: a few big bets at the top that represent clear directions for the future and receive the lion’s share of investment; a portfolio of promising midrange ideas pursued by designated teams that develop and test them; and a broad base of early stage ideas or incremental innovations permitting continuous improvement. Influence flows down the pyramid, as the big bets encourage small wins heading in the same direction, but it also can flow up, because big innovations sometimes begin life as small bits of tinkering—as in the famously accidental development of 3M’s Post-it Notes.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Skills Mistakes: Leadership Too Weak, Communication Too Poor Undervaluing and underinvesting in the human side of innovation is another common mistake. Top managers frequently put the best technical people in charge, not the best leaders. These technically oriented managers, in turn, mistakenly assume that ideas will speak for themselves if they are any good, so they neglect external communication. Or they emphasize tasks over relationships, missing opportunities to enhance the team chemistry necessary to turn undeveloped concepts into useful innovations. Groups that are convened without attention to interpersonal skills find it difficult to embrace collective goals, take advantage of the different strengths various members bring, or communicate well enough to share the tacit knowledge that is still unformed and hard to document while an innovation is under development. It takes time to build the trust and interplay among team members that will spark great ideas. MIT researchers have found that for R&D team members to be truly productive, they have to have been on board for at least two years. At one point, Pillsbury realized that the average length of time the company took to go from new product idea to successful commercialization was 24 to 26 months, but the average length of time people spent on product teams was 18 months. No wonder the company was falling behind in innovation.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Even when a new venture is launched within an existing business, culture clashes become class warfare if there are two classes of corporate citizens—those who have all the fun and those who make all the money. The designated innovators, whether an R&D group or a new-venture unit, are identified as creators of the future. They are free of rules or revenue demands and are allowed to play with ideas that don’t yet work. Their colleagues are expected to follow rules, meet demands, and make money while feeling like grinds and sometimes being told they are dinosaurs whose business models will soon be obsolete.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Similarly, U.S. charter schools were freed from the rules of public school systems so they could innovate and thus serve as models for improved education. They’ve employed many innovative practices, including longer school days and focused curricula, but there is little evidence that charter schools have influenced changes in the rest of their school districts.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“set up an innovative unit called First Community Bank (FCB), the first comprehensive banking initiative to focus on inner-city markets. FCB struggled to convince mainstream managers in Bank of Boston’s retail-banking group that the usual performance metrics, such as transaction time and profitability per customer, were not appropriate for this market—which required customer education, among other things—or for a new venture that still needed investment. Mainstream managers argued that “underperforming” branches should be closed. In order to save the innovation, FCB leaders had to invent their own metrics, based on customer satisfaction and loyalty, and find creative ways to show results by clusters of branches. The venture later proved both profitable and important to the parent bank as it embarked on a series of acquisitions.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Performance reviews, and their associated metrics, are another danger zone for innovations. Established companies don’t just want plans; they want managers to stick to those plans. They often reward people for doing what they committed to do and discourage them from making changes as circumstances warrant. At a large defense contractor, for instance, people got low marks for not delivering exactly what they had promised, even if they delivered something better—which led people to underpromise, eventually reducing employees’ aspirations and driving out innovation.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“too many trivial projects are like seeds sown on stony ground—they might sprout, but they do not take root and grow into anything useful.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“While loosening formal controls, companies should tighten interpersonal connections between innovation efforts and the rest of the business.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“Process Lessons • Tight controls strangle innovation. The planning, budgeting, and reviews applied to existing businesses will squeeze the life out of an innovation effort. • Companies should expect deviations from plan: If employees are rewarded simply for doing what they committed to do, rather than acting as circumstances would suggest, their employers will stifle and drive out innovation.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“The reality is that an innovation initiative must be executed by a partnership that somehow bridges the hostilities—a partnership between a dedicated team and what we call the performance engine, the unit responsible for sustaining excellence in ongoing operations. Granted, such an arrangement seems, at first glance, improbable. But to give up on it is to give up on innovation itself.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“creation of a team of nine design-thinking coaches—“innovation catalysts”—from across Intuit who were made available to help any work group create prototypes, run experiments, and learn from customers. The process includes a “painstorm” (to determine the customer’s greatest pain point), a “sol-jam” (to generate and then winnow possible solutions), and a “code-jam” (to write code “good enough” to take to customers within two weeks). Design for Delight has enabled employees throughout Intuit to move from satisfying customers to delighting them.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation

“New ventures are undertaken with a high ratio of assumption to knowledge.”
― Harvard Business School Press, HBR's 10 Must Reads on Innovation