Head: (5 of 5)
Heart: (3 of 5)
Leadership Applicability: (4.5 of 5)

"'In slow-down periods we lay people off and cut back on our activities, including innovation efforts. When things pick up again, we try to pick up where we left off and ramp up our innovation efforts to help ensure a solid future. We try to hire back the best people we laid off but usually it is too late; they have gone on to something else. We consequently lose a lot of knowledge and learning and cannot get it back. This has all been wrong. Slow-down periods are opportunities to improve, to acquire new capabilities, new opportunities, and to gear up for the future health of the company."'

The speaker here is the late Jerry Junkins, Texas Instruments CEO, in a long conversation with one of the Grabbing Lightning authors a few years before his untimely death. Junkins told the author that many of the standard business practices of U.S. companies, including TI, had been and were a major detriment to ongoing innovation drivers. The authors, all professors at the Rensselaer Polytechnic Institute's Lally School of Management and Technology in New York, had set out to discover why.

Phase I of their research involved studying over five years how twelve breakthrough innovation (BI) projects were managed in ten large, established companies. As to be expected, some projects were killed while others met with varying degrees of success. Several changed the game in their industries. In Phase II, they set out to determine how companies that wanted a sustained BI capability were executing it. Observing twelve more companies over three and half years, they came to the conclusion that after years of being a fad that comes and goes, innovation "is finally coming into its own." Companies are recognizing the need to develop the capability for sustained innovation, and although they are struggling with how to do this, with varying results, the companies that will beat the slump are focusing on it and investing heavily.

Most organizations have clear strategies for operational excellence and even new product development, but very few have explicit BI strategies, say the authors. "It's as if they believe breakthroughs will happen serendipitously, or even better, as the result of leadership's declaration that they're needed, now!" Leaving BI up to mavericks or impassioned champions fails to leverage the great advantage that established companies have over upstarts: access to the money, brains and market power they need to draw on to make things happen. The authors' research has led them to believe that in order for a large, established organization to build the capability to commercialize breakthroughs repeatedly, it must create a distinct innovation function. "To become an integral part of any company on an equal footing with operations, marketing, finance, human resources, quality and other core functions, innovation, we believe, needs to become its own discipline, its own function in companies today."

The book is divided into nine chapters and two appendixes:

1. Management Systems for Innovation
2. Assessing your Organization's Capacity for Breakthrough Innovation
3. The Discovery Competency
4. Incubation: The Long and Winding Road
5. Acceleration: Gathering Steam and Building Critical Mass
6. The DNA Innovation System
7. Incorporating the DNA: The Role of the Orchestrator
8. Getting Started: Initiating and Maturing and Innovation Management System
9. The Innovation Function
A. Companies Participating in the Breakthrough Innovation Research Study
B. Assessing Your Firm's Breakthrough Innovation Competency

Why is it that companies have tried many different innovation approaches in recent history, but none of these models has resulted in a sustained successful BI capability? Because they're dependent on individual champions, because they're not part of the company's strategy or strategic intent, or because they were singularly focused on one project, say the authors. Treating BI as a temporary program or appendage to mainstream operations does not work. What leaders have not known, until now, is that the management and systems created around this innovation function should differ from that of the rest of the company, which are usually designed to support a culture of productivity, efficiency and operational excellence. BI involves high risk and high rates of failure, and long time horizons. It's been proven to return substantial profits-but only with the proper support, investment, funding, nurturing, and maturation.

The model the authors have come up with for how to structure the innovation function is Discovery, Incubation, and Acceleration (DNA). The discovery competency is a company's ability to create and identify opportunities that may have major impact in the marketplace through the delivery of new performance benefits, greatly improved performance, or new ways of doing things. Its purpose is to generate BI opportunities. But this is only the beginning; getting ideas is the easy part; developing those ideas into workable, strategically relevant business platforms is the hard part. This is where incubation comes in. With the objective of nurturing the portfolio of opportunities identified in discovery that have uncertain outcomes, incubation takes the most time and is the riskiest of the three building blocks of the authors' DNA model. Companies who are used to fast decision making and instant execution are likely to fail to provide enough resources to this process. But it is just as vital to innovation as discovery. Both of these processes should be working both parallel to and along with the third building block, acceleration. Companies need acceleration capabilities because operating units succeed under conditions that fledging breakthrough businesses cannot deliver on. The purpose of acceleration is to ramp up a young business to a point where they can stand on their own relative to mature business platforms and to management's performance requirements; without it, the new innovation can die on the vine.

This book is full of ideas that did not just spring up out of someone's head; the authors are academics who have spent years studying what works and what doesn't for BI across many large, well established companies. Staid organizations with entrenched cultures that are in opposition to fundamentals of innovation can use these ideas to adapt to new ways of doing things. Smaller companies and startups can learn from these larger organizations to fuel-and sustain-their own cultures of innovation. Buy it.