Preface
It's said that anyone can be innovative - but this is obviously not true. The vast majority of new products introduced to the market fail miserably. In some instances they were loaded with features and functions customers were unwilling to pay for; in others they did not provide enough; and in still others they were entirely misconceived. Regardless of whether firms are guided by extensive market research or the gut-feel decisions of executives, new products fail to hit the mark.
However, it remains true that anyone can be innovative - if they are willing to work hard. They must learn about the customers' problems and make an earnest effort to provide solutions that effectively address them. Doing so requires a great deal more restraint and discipline than wild-eyed "idea" men are willing to bring to bear. It also requires firms to take on a great deal of risk, as doing something different than what has done before brings with it the chance that it is the wrong thing or, at best, not quite the right thing - the firm must have the courage to move forward, and the patience to be able to learn from their mistakes rather than abandon an idea that isn't an immediate success.
Within every organization, there is an ongoing conflict between two camps: the one that wishes to grow by being innovative and the other that wishes to be safe by sticking to current practices. There is little room for compromise between these positions because they are diametrically opposed. To innovate requires risk, and to play it safe requires avoiding risk. This is why many large organizations are incapable of innovation - the culture of "business as usual" is simply too deeply entrenched and has become highly efficient and squelching new ideas. But this is not solely a problem for large firms in established industries - even small firms in new industries very quickly fall into a cadence and begin to establish standard procedures, then seek efficiency improvements while eschewing innovation.
There's a brief tangent about the investment in exploration. In any economic crisis, research and development is the first department that is cut in a streamlining process in which a company attempts to batten down the hatches and ride out the storm by, as the metaphor implies, staying exactly where they are and attempting to weather adverse conditions rather than seeking safer and more profitable territory. He also mentions the practices of outsourcing and offshoring as impediments to innovation - even if a firm can count on outsiders to come up with fresh ideas, they cannot count on being the only firm with whom temporary helpers share these ideas - in essence, depending on outside consultants is like placing the brain outside of the body.
Learning by Doing
The author considers learning by doing to be "the basis for competiveness and sustainability." The practice of planning, building, testing, and refining is what leads a company to evolve and adapt and to gain knowledge and competence. When these functions are outsourced, the company becomes merely a source of labor - their consultants are running the firm and giving orders, and when the contract ends they take the knowledge with them, leaving behind a body without a brain of its own. In such a situation, the firm is merely taking orders - it does things but doesn't learn from its experience. And it loses the capacity to think for itself. It experiences limited short-term success at the cost of its long-term sustainability.
The "magic sauce of innovation" is learning - not the type of learning in which an individual merely memorizes information provided them by someone else, but the type in which new knowledge is discovered through a process of innovation. This is seldom very dramatic - it is less like a big bang that transforms a firm all at once, and more of a constant series of smaller explosions that make incremental changes and improvements. It is not a loud "eureka" bit a string of more subtle "a-ha" moments that, over time, aggregate to constitute a major change in direction.
As an aside, this is also far more appealing to risk-averse organizations that wish to squelch innovation: it does not entail the risk of large-scale failure all at once, but disintegrates it into small steps, which reduces the cost of failure and provides greater opportunity to rethink and rework along the way.
He also stresses that it's much easier for a large organization than a small one because it has the resources to capitalize on innovative ideas. A small firm can come up with a great idea, but doesn't have the supply chain to deliver it to the market, nor sufficient brand reputation to convince customers to try a new product.
The independent inventor must take on a massive task to bring his idea to market - which is a process so difficult that most do not: they simply sell their ideas to established businesses, and sacrifice a great deal of the profit. The company that buys the idea gains a product without knowledge - it may profit from manufacturing and distributing it for a time, but eventually the market moves on and the firm finds itself incapable of moving with the market, and must then depend on another inventor to tell it what to build next. It is essentially a lose-lose relationship.
About This Book
This book is about "the early stages of conceptualizing new ideas" that can enhance existing business practices or lead to the creation of new ones. The author is an academic, who developed the ideas over about a decade of teaching technology management. He then provides an outline of the chapters.