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The Innovation Paradox

Book Description

For more than twenty years, major innovations—the kind that transform industries and even societies—seem to have come almost exclusively from startups, despite massive efforts and millions of dollars spent by established companies. Tony Davila and Marc Epstein, authors of the bestselling Making Innovation Work, say the problem is that the very processes and structures responsible for established companies’ enduring success prevent them from developing breakthroughs. This is the innovation paradox. Most established companies succeed through incremental innovation—taking a product they’re known for and adding a feature here, cutting a cost there. Major breakthroughs are hard to achieve when everything about the way your organization is built and run is designed to reward making what already works work a little better. But incremental innovation can coexist with breakthrough thinking. Using examples from both scrappy startups and long-term innovators such as IBM, 3M, Apple, and Google, Davila and Epstein explain how corporate culture, leadership style, strategy, incentives, and management systems can be structured to encourage breakthroughs. Then they bring it all together in a new model called the Startup Corporation, which combines the philosophy of the startup with the experience, resources, and network of an established company. Breakthrough innovation no longer has to be the nearly exclusive province of the new kids on the block. With Davila and Epstein’s assistance, any company can develop paradigm-shifting products and services and maximize the ROI on its R&D.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright Page
  4. Contents
  5. Preface
  6. 1 What is the Innovation Paradox?
    1. Incremental and Breakthrough Innovation
    2. Top-Down and Bottom-Up Innovation
    3. Managing for Strategic Discoveries
    4. The Startup Corporation
    5. The Truth about the Innovation Paradox
  7. 2 The Benefits and Limits of the Business Unit
    1. The Benefits of Business Units
    2. The Limits of Business Units
    3. Business Units, Functional Structure, and Breakthrough Innovation
  8. 3 The Success of Startups
    1. Copy and Combine from Others
    2. Learn as Quickly and as Cheaply as Possible
    3. Manage Risk Effectively
    4. Govern Transparently
    5. Execute
    6. Learning from the Activities of Startup Innovation
    7. Learning from the Creation of Science
  9. 4 The Startup Corporation the New Kid on the Block
    1. Beyond the Success of Startups
    2. Adopting the Strengths of Startups
    3. Stage One: Inspire
    4. Stage Two: Attract
    5. Stage Three: Combine
    6. Stage Four: Learn
    7. Stage Five: Leverage
    8. Stage Six: Integrate
  10. 5 Implementing the Startup Corporation
    1. Solutions for Inspiring
    2. Solutions for Attracting
    3. Solutions for Combining
    4. Solutions for Learning
    5. Solutions for Leveraging
    6. Solutions for Integrating
  11. 6 Overcoming the Innovation Paradox Designing THE STARTUP CORPORATION
    1. Managing Breakthrough Innovation Projects
    2. Inspiring the Startup Corporation
    3. Attracting Ideas into the Startup Corporation
    4. Combining the Pieces of the Startup Corporation
    5. Learning for Strategic Discoveries
    6. Leveraging Strategic Discoveries
    7. Integrating Strategic Discoveries
  12. 7 Innovative Cultures
    1. Changing an Organization’s Culture
    2. Employee Abilities
    3. Supporting Innovation Activities
    4. Goals and Evaluation
    5. Role Models and Structures
    6. Resources, Culture, and Innovation
  13. 8 Leading for Breakthrough Innovation
    1. The Innovation Strategist
    2. The Innovation Sponsor
    3. The Innovation Architect
    4. The Innovation Evangelist
    5. Personal Characteristics of Innovative Leaders
  14. 9 Hard Foundations Strategy, Incentives, and Management Systems
    1. Strategy for Breakthrough Innovation
    2. Incentives for Breakthrough Innovation
    3. Management Systems for Breakthrough Innovation
  15. 10 Wrapping Up
  16. Notes
  17. Index
  18. About the Authors