“There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” Peter Drucker
Those who have read any of Seth Kahan’s previous books (notably Getting Change Right) already know that he has an insatiable curiosity to understand what works in business, what doesn’t, and why so that he can then share what he has learned with as many people as possible. He is a world-class pragmatist and that is obvious in his latest book in which he explains “how leaders leverage inflection points to drive success.” The former chairman and CEO of Intel, Andy Grove, was probably the first person to popularize the term in his book, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company (1996), although it was by then familiar to students of differential calculus. During a presentation at an Intel annual meeting in 1998, Grove explains what he means by strategic inflection points.
“They represent, in my description of it, what happens to a business when a major change takes place in its competitive environment. A major change due to introduction of new technologies. A major change due to the introduction of a different regulatory environment. The major change can be simply a change in the customers’ values, a change in what customers prefer. Almost always it hits the corporation in such a way that those of us in senior management are among the last ones to notice. I’m paraphrasing the words you used in some of your talk, Peter. But what is common to all of them and what is key is that they require a fundamental change in business strategy, and that’s almost a definition of a Strategic Inflection Point. A Strategic Inflection Point is that which causes you to make a fundamental change in business strategy. Nothing less is sufficient.’
I think Getting Innovation Right is Kahan’s most valuable and thus will become his most influential book…thus far. The information, insights, and counsel he provides in it are relevant to almost any organization, whatever its size and nature may be. Moreover, his pragmatic approach to core issues ensures that most of his focus is on what to do and how to do it. For example, consider his brilliant use of reader-friendly devices that include illustrative Figures (23 of them) and data composite Tables (four of them) as well as “Expert Input” contributions in each chapter by real executives in real situations and a “Success Rules” recap at the conclusion of Chapters 1-7.
Kahan realizes that many (if not most) effirts to crerate a workplace environment within which innovation thrives either fail ort fall far short of original expectations. Why? Reasons vary, of course, but Kahan suggests three likely causes: operational pressures, stress of continuous improvement, and changing dynamics within the given industry and/or competitive marketplace. What he offers is a cohesive, comprehensive, and cost-effective system that — with appropriate modifications, of course — by which business leaders can leverage the inflection points to expand the given customer base. When explaining HOW, Kahan focuses on five factors: (1) Current customer satisfaction, (2) Their desire for whatever is offered, (3) The current reputation of its provider, (4) A value proposition that is both (key descriptives) deliverable and sustainable, and (5) Effective outreach.
These are among the dozens of passages that caught my eye, also listed to suggest the scope of Kahan’s ‘s coverage.
o Four Targets for Innovation Strategy (Pages 7-14)
o Using Inflection Points to Achieve Success (22-31)
o The Three Forces That Jeopardize Innovation (37-44)
o The Three Areas of Focus for Intelligence (66-71)
o Figure 3.1: The Ten Stages of the Customer Journey (78-79)
o Four Techniques for Shifting Perspective (98-106)
o The Four Forces of Disruption (110-114)
o Value Assessments (140-144)
o The Innovation Profit Cycle, The Facets of Value, and The Three Types of Added Value (151-158)
o Creating New Value (175-181)
o The Four Thresholds of Engagement (185-198)
o Build Presence Through Value Pulses (210-217)
Also, these resources:
Appendix A: Sample Business Intelligence Contract (219-222)
Appendix B: High-Level Outline of a Typical Business Plan (223-224)
Appendix C: Simplified Business Plan Financial Model (225-226)
Seth Kahan certainly achieves his ultimate objective: To introduce and explain seven key activities that will help prepare leaders in almost any organization to leverage inflection points to drive its success. By way of review, the activities are (1) pursue inflection points, (2) build innovation capacity, (3) collect intelligence, (4) shift perspective from status quo to what can and should be better, (5) exploit opportunities generated by disruption, (6) create value for all stakeholders, and (7) drive innovation uptake.
With all due respect to the wealth of information, insights, and counsel provided in this book, however, it remains for each reader to determine (a) which of the material is most relevant to the given enterprise and then (b) make a full and shared commitment with colleagues to formulate, implement, and continuously improve a results-driven, high-impact action plan. When embarked on that journey, I hope that will keep Drucker’s observation in mind: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”
Here is an article written by Michael Schrage and published in Harvard Business Review. To read the complete article, check out all the other resources, sign in or sign up for HBR email alerts, and obtain discount information, please click here.
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Working “out of your comfort zone” is the euphemism; the organizational reality is “working through pain.” Innovation hurts.
Every organization I’ve observed that’s serious about being innovative is filled with people in genuine pain — not just stress or anxiety or deadline pressure, and certainly not discomfort. Pain. This can be the physical strain of consecutive all-nighters to test every meaningful configuration of a website before it goes live, to the emotional pain of subordinating your vision of the innovation to the vicissitudes of customer taste. Ideally, innovators go through pain so their customers and clients won’t have to
The International Association for the Study of Pain Management defines pain as “an unpleasant sensory and emotional experience…” That fairly captures a dominant innovation sensation at world-class innovators. The innovation cultures of Google, Samsung or Steve Jobs’ Apple or Andy Grove’s Intel, for example, make painfully clear that successful innovators have high thresholds for pain. Unpleasant sensory and emotional experiences abound. Yes, there’s also fun and exhilaration. But innovation leadership is less about clichés celebrating creativity, compelling visions or getting the best out of people than successfully helping innovators beat what hurts. Overcoming resistance is not the same as pushing through pain.
That shouldn’t surprise. Confronting pain is integral to most other elite endeavors. World-class athletes and dancers explicitly train for pain even beyond the point of injury. Special Forces operators such as the Navy SEALs are expected to “Embrace the Suck.” Arguably one of the great flaws of formal business and technical education is that inculcating disciplined self-awareness around pain management is neither part of the culture nor the curriculum. But elite innovators, not unlike their athletic counterparts, understand and accept that they will likely hurt themselves and/or their colleagues on the path to innovation excellence. As Joseph Schumpeter of “creative destruction” fame notably observed, “successful innovation requires an act of will, not of intellect.
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To read the complete article, please click here.
Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play and the forthcoming HBR Single Who Do You Want Your Customers to Become? To check out his other blog posts, please click here.
I recently re-read a book that was published in 2006 by Time Inc. Home Entertainment, Fortune: Secrets of Greatness, based on a series of prior issues of Fortune magazine. As Eric Pooley, its managing editor, explains in the Foreword, he once had an off-the-record, one-on-one dinner with the CEO of a major investment bank who “really came alive when I asked him the most basic question of the evening: “How do you work?’” As Pooley met with other business leaders in the months that followed, he asked the same question and their responses resulted in a special issue called “How I em>Great Beginnings (e.g. “Visionary Chuck Williams on Williams-Sonoma”); II. Great Ways to Work (e.g. “How I work” by Bill Gates”); III. Great Decisions (e.g. “Jim Collins on Tough Calls”); IV. Great Role Models (e.g. “The Education of Andy Grove” by Richard S. Tedlow);
Note: Grove wrote the Introduction and is as candid and insightful in it as he is in Swimming Across and Only the Paranoid Survive. Here is a brief excerpt from the Introduction: “I learned from many small knocks on the head that there is a very simple tool to move faster, to increase productivity. It has to do with the things you decide not to do. The most important two letters that increase your productivity as well as the productivity of the people you work with are N-O, said clearly, unequivocally and early – not after someone has decided to count on you.”
V. Great Teams (e.g. “Why Dream Teams Fail” by Geoffrey Colvin); VI. Great Advice (e.g. “The Best Advice I Ever Got” by 28 business luminaries who include Warren Buffett, Jack Welch, Dick Parsons, Jim Collins, Peter Drucker, Ted Turner, Mickey Drexler, Herb Kelleher, and Clay Christensen). I also appreciate the introductions to the six sections by Joshua Hyatt, Jerry Useem (II, III, and V), and Colvin. In Part III, the Fortune editors examine “Decisions That Made History” which range from Western Union’s rejection of Alexander Graham Bell’s “new invention” (1876) to Jerry Levin’s determination to merge Time Warner with AOL (2000). Thanks to brilliant editing, the material in Secrets of Success offers an extraordinary diversity of points of view while remaining cohesive.
Each contributor establishes and then sustains a direct rapport with the reader. The tone is informal, indeed conversational. Also remarkably candid. For example, Michael Dell confides: “We screwed up all kinds of things, but there was so much inherent value in what we were doing that it masked all the mistakes that we made.” Grove confides, “I almost wrecked the company [Intel] because a new product seduced me.” In this context, one of Peter Drucker’s opinions seems especially relevant: “To demand only well-rounded people, people who have only strengths and no weaknesses, is to invite mediocrity – of which there is always an abundant supply.”
Nearly all of those interviewed stated or at least implied that humility is among the “secrets” of achieving greatness in one form or another. There is also a near-unanimous consensus about the importance of teamwork, cooperation, and collaboration. Their emphasis on the importance of humility reminds me of this passage from Lao-tzu’s Tao Te Ching, one that seems especially relevant:
Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.
After thinking about how to conclude my brief commentary on this entertaining as well as enlightening wealth of advice, I eventually decided to let Andy Grove provide it. “It’s been a long walk through the forest of being a manager – 40 years long in fact. The trees continue to emerge from the dark. The good news is, my forehead is stronger than it was 40 years ago. Perhaps reading the stories that follow and applying them to your situation may save you a bump or two on the head.”
Note: Amazon now sells a copy of the hardbound edition for only $14.96.
Tedlow is the Class of 1949 Professor of Business Administration at the Harvard Business School, where he is a specialist in the history of business. He received his BA from Yale and his MA and PhD in history from Columbia. He came to the Harvard Business School on a fellowship in 1978 and joined the faculty in 1979. From 1979 through 1982, he taught First Year Marketing. His involvement in marketing has continued, and he has been a member of the faculty of the “Strategic Retail Management Seminar,” the “Top Management Seminar for Retailers and Suppliers,” “Managing Brand Meaning,” and the “Strategic Marketing Management” executive education programs.
From 1978 to the present, he has been involved in the HBS’ Business History program. In 1992 and 1993, he taught a course entitled “Business, Government, and the International Economy.” He has also taught in numerous executive programs at the Harvard Business School as well as at corporations, including programs in marketing strategy and general management. His published works include Giants of Enterprise: Seven Business Innovators and the Empires They Built, The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM’s Founding Father and Son, and more recently, Andy Grove: The Life and Times of an American. His latest book, Denial: Why Business Leaders Fail to Look the Facts in the Face — and What to Do About It, was published by Portfolio/The Penguin Group (2010).
Here is an excerpt from my interview of Tedlow. The complete interview is also available.
Morris: Let’s discuss your biography, Andy Grove. The subtitle refers to “the life and times of an American.” To what extent is Grove an exemplary American?
Tedlow: In some ways, Grove is the classic American success story. He was a refugee from oppression. Born in Hungary in 1936, he first had to survive the Nazis and then the Communists. He arrived in the United States at the age of 20 and discovered it to be a true meritocracy. It is the meritocratic element of his story which makes Grove an exemplar of America at its best.
Morris: Grove has frequently used the term “inflection point.” In a business context, what is it?
Tedlow: For Grove, an inflection point is a turning point in the history of a business. It is a moment of truth. If you make the right decision, you put your company on the path to future growth. If you make the wrong decision, you face decline.
Morris: In your opinion, what was the most significant “inflection point” for Intel?
Tedlow: My choice is the decision to serve as the sole source for the 80386 microprocessor in 1985 and 1986. Up until that time, it had been mandatory in the computer industry that component suppliers to the dominant firm (which was IBM at the time) licensed their technology to competing manufacturers. This process allowed IBM to play one supplier off against another and to control prices. When Grove took the leap of informing IBM and the rest of the industry that Intel was not going to license the technology for its 80386 microprocessor, this was a genuine inflection point. It was a “bet the company” decision. Because Grove made it and made it work, Intel became one of the leading firms in computing.
Morris: Grove is often identified as being one of the most effective corporate CEOs in the 20th century. Why?
Tedlow: Andy Grove became the CEO of Intel in 1987. At the end of that year Intel had a market capitalization of $4.3 billion. Grove stepped down as CEO of Intel in 1998. At the end of that year, the company had a market capitalization of $197.6 billion. This increase in value represents a compound annual growth rate of 42 percent over an eleven year period. Few if any other CEOs can point to such a record.
Morris: Of all that you learned about Grove during your extensive research on his life and times, what do you consider to be most revealing of the man?
Tedlow: It was very interesting for me to discover that although he drove the people who worked for him very hard, he drove himself harder. He well understood the old saying that the speed of the boss is the speed of the gang.
Morris: To those who are preparing for or are only recently embarked on a business career, what lessons in leadership and management can be learned from Andy Grove?
Tedlow: Grove’s method of decision-making combines both discipline and creativity. He makes “data-driven gut decisions.” I believe that combining those two facets of decision-making is more than merely valuable. I believe it is essential.
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If you wish to read the complete interview, please contact me at email@example.com.