Vijay Govindarajan: An interview by Bob Morris

Vijay Govindarajan (“VG”) is widely regarded as one of the world’s leading experts on strategy and innovation. He is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth College. He was the first Professor in Residence and Chief Innovation Consultant at General Electric. He worked with GE’s CEO Jeff Immelt to write “How GE is Disrupting Itself”, the Harvard Business Review article that pioneered the concept of reverse innovation – any innovation that is adopted first in the developing world. Harvard Business Review rated reverse innovation as one of the ten big ideas of the decade. VG works with CEOs and top management teams in Global Fortune 500 firms to discuss, challenge, and escalate their thinking about strategy. VG wrote the NYT and WSJ Best Seller, Reverse Innovation: Create Far From Home, Win Everywhere.

Here is an excerpt from my interview of VG. To read the complete interview, please click here.

* * *

Morris: When and why did you and Chris Trimble decide to write Reverse Innovation? What specific objectives did you have in mind?

Govindarajan: Growing up in India, I knew that the only way to solve our problems is innovation— India has too many problems and the country has too few resources. So I dedicated myself to research and write about innovation. Reverse Innovation brings me full circle back to India.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Govindarajan: The biggest surprise was that innovations for the poor can transform the lives of the rich.

Morris: To what extent (if any) does the book in final form differ significantly from what you and Chris originally envisioned?

Govindarajan: Any book is an evolutionary process. It started with one company experience, GE. As we studies a dozen other companies, our theory evolved.

Morris: You and Chris Trimble have worked closely for several years. Please explain how all that happened.

Govindarajan: We have complementary strengths, yet both are committed to impacting practice. It has therefore been a great partnership.

Morris: In recent years, there has been sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools such as Tuck. In your opinion, in which area is there the greatest need for [begin italics] immediate [end italics] improvement? Why? Any specific suggestions?

Govindarajan: B-Schools need to connect theory with practice. After all we are an applied field. We should look to Medical Schools, Law Schools, and Engineering Schools for inspiration— not look for legitimacy from Pure Sciences like Physics and Chemistry.

Morris: I have read all of your books and then re-read most of them before formulating the questions for this interview. In your opinion, which of these books did you find most challenging to write? Why?

Govindarajan: Reverse Innovation since it brought to closure my life’s dreams.

Morris: Throughout history, which person do you think was the greatest innovative thinker? Please explain your selection.

Govindarajan: Thomas Edison because he understood that innovation is 1% inspiration and 99% perspiration. Most people miss this point. Bulk of the innovation challenge is in the 99% perspiration— innovation execution. This is my central research area and this is what Reverse Innovation is all about.

Morris: There are several people whom both you and I hold in high regard. Please share your thoughts and feelings about each. First, Peter Drucker

Govindarajan: Great role model.

Morris: Next, the two Thomas Watsons, father and son

Govindarajan: Created new markets

Morris: Finally, C.K. Prahalad

Govindarajan: Friend, philosopher, and guide

Morris: In your opinion, what will be the single greatest challenge that CEOs will face during the next 3-5 years? Any advice?

Govindarajan: How to grow in a slow growth world? The key is innovation.

* * *

To read the complete interview, please click here.

To read my review of Reverse Innovation, please click here.

VG cordially invites you to check out the resources at these websites:

His faculty page

His blog

Reverse Discrimination page

Vijay Govindarajan: An interview by Bob Morris

Vijay Govindarajan (“VG”) is widely regarded as one of the world’s leading experts on strategy and innovation. He is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth College. He was the first Professor in Residence and Chief Innovation Consultant at General Electric. He worked with GE’s CEO Jeff Immelt to write “How GE is Disrupting Itself,” the Harvard Business Review article that pioneered the concept of reverse innovation – any innovation that is adopted first in the developing world. Harvard Business Review rated reverse innovation as one of the ten big ideas of the decade. VG works with CEOs and top management teams in Global Fortune 500 firms to discuss, challenge, and escalate their thinking about strategy. VG wrote the NYT and WSJ Best Seller, Reverse Innovation: Create Far From Home, Win Everywhere.

Here is an excerpt from my interview of VG. To read the complete interview, please click here.

* * *

Morris: When and why did you and Chris Trimble decide to write Reverse Innovation? What specific objectives did you have in mind?

Govindarajan: Growing up in India, I knew that the only way to solve our problems is innovation— India has too many problems and the country has too few resources. So I dedicated myself to research and write about innovation. Reverse Innovation brings me full circle back to India.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Govindarajan: The biggest surprise was that innovations for the poor can transform the lives of the rich.

Morris: To what extent (if any) does the book in final form differ significantly from what you and Chris originally envisioned?

Govindarajan: Any book is an evolutionary process. It started with one company experience, GE. As we studies a dozen other companies, our theory evolved.

Morris: You and Chris Trimble have worked closely for several years. Please explain how all that happened.

Govindarajan: We have complementary strengths, yet both are committed to impacting practice. It has therefore been a great partnership.

Morris: In recent years, there has been sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools such as Tuck. In your opinion, in which area is there the greatest need for [begin italics] immediate [end italics] improvement? Why? Any specific suggestions?

Govindarajan: B-Schools need to connect theory with practice. After all we are an applied field. We should look to Medical Schools, Law Schools, and Engineering Schools for inspiration— not look for legitimacy from Pure Sciences like Physics and Chemistry.

Morris: I have read all of your books and then re-read most of them before formulating the questions for this interview. In your opinion, which of these books did you find most challenging to write? Why?

Govindarajan: Reverse Innovation since it brought to closure my life’s dreams.

Morris: Throughout history, which person do you think was the greatest innovative thinker? Please explain your selection.

Govindarajan: Thomas Edison because he understood that innovation is 1% inspiration and 99% perspiration. Most people miss this point. Bulk of the innovation challenge is in the 99% perspiration— innovation execution. This is my central research area and this is what Reverse Innovation is all about.

Morris: There are several people whom both you and I hold in high regard. Please share your thoughts and feelings about each. First, Peter Drucker

Govindarajan: Great role model.

Morris: Next, the two Thomas Watsons, father and son

Govindarajan: Created new markets

Morris: Finally, C.K. Prahalad

Govindarajan: Friend, philosopher, and guide

Morris: In your opinion, what will be the single greatest challenge that CEOs will face during the next 3-5 years? Any advice?

Govindarajan: How to grow in a slow growth world? The key is innovation.

* * *

To read the complete interview, please click here.

To read my review of Reverse Innovation, please click here.

VG cordially invites you to check out the resources at these websites:

His faculty page

His blog

Reverse Innovation page

Unrelenting Innovation: A book review by Bob Morris

Unrelenting Innovation: How to Build a Culture for Market Dominance
Gerard J. Tellis
Jossey-Bass/A Wiley Imprint (2013)

How to avoid or overcome “the incumbent’s curse” to achieve market dominance

By nature, books about innovation should contribute something new and/or something better to our understanding of what innovation is and isn’t as well as how to develop a mindset and skills that will enable us to (yes) contribute something new and/or something better. Gerard Tellis makes such a contribution as he explains how to build and then sustain a culture for market dominance. As Vijay Govindarajan suggests in the Foreword, “I like the central argument in this book: success breeds complacency, lethargy, or arrogance – in short, a culture that embraces the status quo instead of the future abhors risk and protects current successful products.”

This is what Tellis characterizes as “the incumbent’s curse”: Becoming successful hampers continued innovation and hinders continued leadership. He identifies three defining traits: “First, incumbents fear cannibalizing their current successful products…Second, incumbents are risk averse…Third, incumbents focus too much on the present” and probably the past. Hence a paradox: To paraphrase Marshall Goldsmith, whatever got an organization to its current success (however defined) will not only be able to sustain that success; worse yet, it will almost certainly eliminate that success in weeks and months (probably not years) to come.

Simply stated, “unrelenting innovation” is constant effort to make something new and/or make something better.” Odd are that, more often than not, innovation will not be the result. The process “fails” only when it does not continue. Every so-called “failure” is in fact a precious learning opportunity. I agree with Tellis that a culture within which innovation thrives must have defining characteristics that include the three he identifies: a willingness to “cannibalize” incumbent products and/or services, embracing risk, and a focus on the future. Organizations that aspire to establish and nourish such a culture must (a) provide appropriate incentives (i.e. strong for successful innovation but weak penalties for anything less), (b) establish internal competitive markets, and (c) empower innovation “champions” who not only create but also develop (with others) whatever is new or better.

These are among the dozens of passages I found to be of greatest interest and value, also listed to suggest the range of subjects covered during the course of the book’s narrative:

o Why Incumbents Fail to Innovate Unrelentingly (Pages 3-17)
o Understanding Technological Evolution (33-37)
o The Reflection, Hot-Stove, and The Expectation Effects (63-69)
o Availability Bias (114-121)
o Incentives for Enterprise (143-155)
o Four Characteristics of Markets (181-192)
o Four Characteristics of “Champions” (208-210)
o Steps in Empowering Champions (235-236)
o Micro Theories (238-250)
o Macro Theories (250-260)

With rare exception, the best business books are driven by research and that is certainly true of this one. Check out the list of major studies Tellis co0nsulted on Pages 17-19, the additional details in Chapter 8, his Notes (263-288), and his Bibliography (289-306. Exemplar innovation cultures include IBM, Samsung, P&G, and General Motors. However different they may be in most respects, all of them demonstrate highly developed communication, cooperation, and most important of all, collaboration. This book is also a major collaborative effort, as Tellis gratefully acknowledges on Page 307.

No brief commentary such as mine can possibly do full justice to the scope of material that Gerald Tellis provides in this volume but I hope that I have at least suggested why I think so highly of it. Also, I hope that those who read this commentary will be better prepared to determine whether or not they wish to read the book and, in that event, will have at least some idea of how to build and then nourish a culture for market dominance, an achievement that would be of substantial benefit to his readers’ professional development as well as to the success of their organization.

Those who share my high regard for this volume are urged to check out as well as Josh Lerner’s The Architecture of Innovation: The Economics of Creative Organizations as well as Reverse Innovation: Create Far From Home, Win Everywhere co-authored by Vijay Govindarajan and Chris Trimble with Indra K. Nooyi and The Other Side of Innovation: Solving the Execution Challenge co-authored by Govindarajan and Trimble; also, Steven Johnson’s Where Good Ideas Come From: The Natural History of Innovation and two co-authored by Tom Kelley and Jonathan Littman: The Art of Innovation: Lessons in Creativity from IDEO, America’s Leading Design Firm and The Ten Faces of Innovation: IDEO’s Strategies for Defeating the Devil’s Advocate and Driving Creativity Throughout Your Organization.

Reverse Innovation; Abundance – Our 2 Books for the July 6 First Friday Book Synopsis

We had a wonderful gathering this morning for the June 1 First Friday Book Synopsis.  Karl Krayer presented his synopsis of All In: How the Best Managers Create a Culture of Belief and Drive Big Results by Adrian Gostick and Chester Elton.  I presented the best-selling and much-talked-about The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg.  These are both genuinely useful books.

(Our synopses, with handouts + audio of our live presentations from this morning, will be available soon on our companion web site, 15minutebusinessbooks.com).

On July 6, Karl will present his synopsis Reverse Innovation: Create Far From Home, Win Everywhere by Vijay Govindarajan and Chris Trimble (foreword by Indra K. Nooyi).

I will present my synopsis of Abundance: The Future Is Better Than You Think by Peter H. Diamandis and Steven Kotler.  Peter Diamandis is the founder of the X Prize, and you can watch his TED talk, Abundance is Our Future, here.  So this book will give us a big hefty dose of optimism, which I suspect we could all use right about now.

Click on the flier below to read all the details. We begin at 7:00, and conclude right around 8:05.  And you eat a great buffet with made-to-order omelet bar breakfast, experience great visiting and table conversations, and receive a quick, substantive jolt of content.  Come join us.

Click on image for full view

Vijay Govindarajan on How to Reverse the “Curse of Dominant Logic”

Here is an excerpt from an article written by Vijay Govindarajan for the Harvard Business Review blog. To read the complete article, check out the wealth of free resources, and sign up for a subscription to HBR email alerts, please click here.

*     *     *

Western multinationals — especially the most successful ones — consistently struggle to achieve their growth targets in emerging markets. Why? Because they try to repeat their past success formulas — the ones that work so well for them in developed markets.

This was the case at Harman, which had achieved extraordinary success in the high-end automotive infotainment systems for luxury cars. However, the company’s initial steps to penetrate developing markets were unproductive. Harman created a scaled-down version of its high-end system which proved a dismal failure in poor countries.

For Harman and many others like them, institutionalized thinking — or what C.K. Prahalad first called the “dominant logic” — creates traps that can sabotage their efforts to capture the full set of opportunities in emerging markets. This is so because emerging market customers have vastly different needs as compared to rich-world customers. In the HBR article, “A Reverse Innovation Playbook” (April 2012) and our latest book, Reverse Innovation: Create Far fom Home, Win Everywhere, my co-author, Chris Trimble, and I elaborate on how western multinationals can overcome their dominant logic. But the starting point is to understand your company’s current dominant logic. For a quick idea of what that might be in your organization, take the following quiz.

What is Your Company’s Dominant Logic?

On a 1-5 scale (where 1=Strongly Agree; 2=Agree; 3=Neither Agree nor Disagree; 4=Disagree; and 5= Strongly Disagree), rate the thinking of your company’s key decision-makers on the following statements, then add up the total of all 10 items.

1.      Rich countries are the most technologically advanced. So innovation and learning will move from rich countries to poor countries.

2.      Sales of our existing products and services will increase as emerging economies grow and consumer incomes rise. We need only to be patient.

3.      The best approach to emerging markets is to export stripped-down versions of existing products and services, and sell them at lower prices.

4.      The bulk of the customers in poor countries have low per-capita incomes, low sophistication, and low affordability. We should be able to meet their needs with cheap products based on older technology.

5.      Poor countries today are where the rich countries were in their infancy. Poor countries will evolve in the same way that wealthy economies did. As they develop, poor countries will catch up with rich ones.

6.      It is impossible to earn healthy profits in emerging markets.

7.      The only competitors worth our attention are other multinationals.

8.      Products that address poor countries’ special needs can’t be sold in rich countries because they’re not good enough to compete.

9.      We excel in product leadership and advanced technology — values inconsistent with the ultra-low-cost products poor countries require.

10.    Because we stand for premium products and high quality, we will undermine our global brands if we compete in low-cost markets. Worse, we risk cannibalizing our premium offerings.

What is your company’s score? If your total score is less than 30, you will underperform in emerging markets. Your business needs an antidote.

Recently, I administered this quiz to four world-class multinationals. Their scores ranged from 15 to 35 — very sobering indeed.

*     *     *

To read the complete article, please click here.

Vijay (VG) Govindarajan is the Earl C. Daum 1924 Professor of International Business at the Tuck School of Business at Dartmouth. As indicated, he is co-author of Reverse Innovation (HBR Press, April 2012).To check out his  other blog posts, please click here.

Reverse Innovation: A book review by Bob Morris

Reverse Innovation: Create Far from Home, Win Everywhere
Vijay Govindarajan and Chris Trimble
Harvard Business School Press (2012)

How and why reverse innovation can help to reverse the negative trends and tendencies that can weaken an organization

Those who have read one or more of Vijay Govindarajan and Chris Trimble’s previously published books (notably Ten Rules for Strategic Innovators and, more recently, The Other Side of Innovation) already know that they share a unique talent for recognizing and then explaining previously unrecognized – or under-appreciated — business trends and their implications. In this instance, the fact that the dynamics of global innovation are not only changing, they are shifting from rich countries with incumbent economies to meeting unmet needs in developing countries.

Leaders in companies that aspire to accommodate those needs must develop a mindset that is radically different, one whose core concept is reverse innovation. That is, “any innovation that is adopted first in the developing world.” To develop that mindset, leaders must understand the significant differences between rich-country and poor-country needs. “Reverse innovation does not begin with inventing, but with forgetting. You must let go of what you’ve learned, what you’ve seen, and what has brought you your greatest successes. You must let go of the dominant logic that has served you well in rich countries. If you want to use today’s science and technology to address unmet needs in the developing world, then you must start with humility and curiosity.”

In short, think “far from home” before attempting to do business there.

Govindarajan and Trimble identify and explore five need gaps that can serve as paths to success with reverse innovation in macro markets of micro consumers. Understanding the nature, extent, and perils as well as opportunities of these need gaps will serve as the foundation of the radically different mindset to which I referred earlier.  With both uncommon rigor and precision, Govindarajan and Chris Trimble explain

o  What the reverse innovation challenge requires
o  How to develop the reverse innovation mindset
o  How to formulate an appropriate strategy based the five paths
o  How to create “clean slate” innovation in emerging markets
o  “The Reverse Innovation Playbook” (Nine rules to guide and inform strategy, global organization, and project organization

In Part 2, Reverse Innovation in Action,” Govindarajan and Trimble shift their attention to mini-case studies of eight major companies (Chapters 5-12, Pages 75-188), citing real-world situations that demonstrate an abundance of do’s and don’ts during initiatives to develop macromarkets with products that appeal to microconsumers. For example, in Chapter Six, Govindarajan and Trimble explain how Procter & Gamble realized that its success in emerging markets required it to innovate the “Un-P&G Way” because unfamiliar customer needs “trump” leading-edge technology. In Chapter Eleven, “PepsiCo’s Brand-New Bag,” this major multi-national company had to learn how to “think globally but snack locally”

Readers will also appreciate the provision of a “Reverse Innovation Toolkit” in Appendix A. Govindarajan and Trimble include several practical diagnostics and templates that will help business leaders expedite their reverse innovation efforts. In fact, they make brilliant use of reader-friendly devices throughout the book, notably “Playbook Lessons” and “Questions for Reflection. Here in a single volume is probably about as much as any business leader needs to help her or his global company to use reverse innovation to avoid or reverse the negative trends and tendencies that can weaken an organization when it attempts to do business in emerging markets.

Harvard Business Review on Inspiring & Executing Innovation: A book review by Bob Morris

Harvard Business Review on Inspiring & Executing Innovation
Various Contributors
Harvard Business Review Press (2011)

How to create and then deliver new or better products and services

This is one of the volumes in a series of anthologies of articles that first appeared in HBR. In this instance, its ten articles focus on one or more components of a process by which to inspire and then execute breakthrough innovation. Having read all of the articles when they were first published individually, I can personally attest to the brilliance of their authors’ (or co-authors’) insights and the eloquence with which they are expressed. Two substantial value-added benefits should also be noted: If all of the articles were purchased separately as reprints, the total cost would be at least $60-75; they are now conveniently bound in a single volume and for a fraction of that cost.

Here in Dallas, there is a Farmers Market near the downtown area at which several merchants offer slices of fresh fruit as samples. I now provide what follows in that spirit.

In “Innovation’s Holy Grail,” C.K. Prahalad and R.A. Mashelkar use the term “Ghandian” innovation because, “at the core of this type of innovation lie two of the Mahatma’s tenets: ‘I would prize every invention of science made for the benefit of all’ and ‘Earth provides enough to satisfy every man’s need, but not every man’s reed’…Ghandian innovators solve problems in two ways: by acquiring or developing technologies and by altering business models or capabilities.”

In “The Customer-Centered Innovation Map,” Lance A. Bettencourt and Anthony W. Ulwick suggest that all jobs have the same eight tasks. To use job mapping, look for opportunities to help customers at every step.” They are:

1. Define: Determine their goals and plan resources
2. Locate: Gather items and information needed for the job
3. Prepare: Set up the environment to do the job
4. Confirm: Verify that they’re ready to perform the job
5. Execute: Carry out the job
6. Monitor: Assess whether the job is being successfully executed
7. Modify: Make alterations to improve execution

“Because problems can occur at many points in the process, nearly all jobs also require a problem resolution step. Some steps are more critical than others, depending on the job, but each is necessary to get the job done. Successfully.”

In “Innovation: The Classic Traps,” Rosabeth Moss Kanter identifies and then rigorously discusses eight (8) common mistakes that must be replaced by the “potent remedies” she recommends. The mistakes are:

• Rejecting opportunities that at first glance appear too small
• Assuming that only new products count – not new services or improved processes
• Launching too many minor product extensions that confuse customers and increase external complexity
•  Strangling innovation with the same tight planning, budgeting, and reviews applied to existing businesses
•  Rewarding managers for doing only what they committed to do – and discouraging them from making changes as circumstances warrant
•  Isolating fledgling and established enterprises in separate silos
•  Creating two classes of corporate citizens – those who have all the fun (innovators) and those who must make the money (mainstream business managers)
•  Allowing innovators to rotate out of teams so quickly that team chemistry can’t gel
•  Assuming that innovation teams should be led by the best technical people

Suggested Readings:

Two by Thomas Kelley with Jonathan Littman:

The Art of Innovation
The Ten Faces of Innovation

and two more recently published books:

The Other Side of Innovation: Solving the Execution Challenge
Vijay-Govindarajan and Chris Trimble

Innovation to the Core: A Blueprint for Transforming the Way Your Company Innovates
Peter Skarzynski and Rowan Gibson

How to Bring Innovations to Market

Vijay Govindarajan

Here is an excerpt from Theodore Kinni’s interview of Vijay Govindarajan for strategy+business magazine. To read the complete interview, check out other resources, and obtain subscription information, please click here.

*     *     *

Management professor Vijay Govindarajan explains why companies have trouble implementing new ideas — and what they should do about it.

Innovation processes are almost always heavily front-loaded. They focus the lion’s share of attention on idea generation, but they usually finish with something less than a roar. Ask most executives what you should do after you’ve come up with a market-shaking idea, and they’re likely to say, “Just implement it.”

Vijay Govindarajan, the Earl C. Daum 1924 Professor of International Business and founding director of the Center for Global Leadership at the Tuck School of Business at Dartmouth, knows that implementing innovation is not quite so simple. For the past decade, he and Tuck School colleague Chris Trimble have been studying what happens after companies decide to bring that big idea to market.

They have reported the findings in their new book, The Other Side of Innovation: Solving the Execution Challenge (Harvard Business Press, 2010). In a recent discussion with strategy+business, Govindarajan discussed some of what the duo learned.

Why did you decide to focus your research on the execution side of innovation?

Every time I meet with a group of executives, I take a poll. On a 10-point scale, one being poor, 10 being world-class, I ask them to rate themselves on how good their companies are at idea generation. They consistently rank their companies at five or six on the scale. Then I ask them to rate how good they are at executing ideas. On average, they rank their companies just one on execution. So, although I would not say that companies have mastered idea generation, relatively speaking, there are enough ideas out there. But if companies could just execute better, they could create a lot more growth.

Why do companies find it difficult to execute new ideas?

In a sense, the problem is about people doing the right thing. Every organization has a core business, which we call its performance engine. Its main job is efficiency: By making every task repeatable and predictable, the core business obtains scale and makes a lot of money. Innovation is just the opposite. It is nonroutine and unpredictable. Therefore, there is an inherent and fundamental inconsistency between what companies do to pursue scale and what they need to do to execute on innovation. It is not that people are doing the wrong things and killing innovation. In fact, people are doing exactly what they should be doing to keep the performance engine running — and that is killing innovation.

If the performance engine can’t execute innovation, how then do you go about it?

Well, to start, you can’t just focus on one or the other. You have to be good at innovation and efficiency. There are three basic principles. First, innovation cannot happen inside the performance engine, so it requires a dedicated innovation team. Second, although the innovation team should be separate, it should not be isolated, because it has to leverage some of the assets and capabilities of the performance engine. There has to be a link. Third, because innovation by definition is an experiment with unknown outcomes, you can’t use the same yardstick — short-term financial results — that you use for the performance engine.

You need a dedicated team for every type of innovation?

Absolutely not. There are certain kinds of innovation, such as continuous process improvement and line extensions, that the performance engine can do. The performance engine can also do big innovations as long as they fit within the framework of the existing product portfolio. For example, John Deere can do an improved version of a tractor within its performance engine. But there are limits to what a performance engine can do, because, by and large, it must focus on efficiency.
What dimensions should be considered as executives think about how to approach innovation execution?

Let’s take a concrete example. In 2000, Infosys [Technologies Ltd.], which had been writing software, went into the consulting business. Infosys Consulting could not be launched inside its core business. The performance engine was designed for software development, whereas consulting is about business transformation; programming and consulting require fundamentally different capabilities. And the customer for custom software is the head of IT, whereas the customer for consulting is the CEO. So a dedicated team was created, and the team designed a different culture and compensation package for the new business.

At the same time, the dedicated team drew on certain assets of the performance engine. One very important one was customer relationships, because, after all, the consultants wanted to work with the same Fortune 500 companies as the programmers. A second asset was the existing global delivery model, which enabled Infosys to dramatically lower costs and still offer high-quality service.

How do you ensure the performance engine’s participation in executing the innovation?

You have to recognize that there are fundamental tensions between performance engines and innovation teams, and that any time you force them to work together, conflicts will arise. So you have to make the link, and then expect the conflict and manage it. The Infosys case study revealed three ways to do this.

The first is to have the right leader for the dedicated team. At Infosys, it was an outsider named Steve Pratt. That is important — he wasn’t part of the performance engine. He also happened to be an extremely humble person, who was willing to talk through the potential conflicts with the performance engine and reconcile them ahead of time. And he didn’t overreach. Instead of asking the performance engine to give him a lot of customer contacts, he asked for one customer contact and proved he could sell consulting to that customer without damaging the programming business.

Second, the dedicated team, like the performance engine, should report at a very high level. When Infosys Consulting was started, it was a tiny business. Yet it reported directly to the then CEO, Nandan Nilekani, who played a critical role in anticipating and managing the conflicts between the performance engine and the innovation team. Nilekani also created another board of directors for Infosys Consulting and made sure a few members served on both boards.

Third, it is important to create incentives, because ultimately people respond to rewards. One of the things Infosys did was to double count the revenues from the new consulting business. So if the software business provided a lead that generated sales for Infosys Consulting, it also got credit for the new revenue. This gave the performance engine an incentive to work with the innovation team.

*     *       *

To read the complete interview, check out other resources, and obtain subscription information, please click here.

Theodore Kinni is senior editor for books at strategy+business and the author or co-author of three: No Substitute for Victory, America’s Best: IndustryWeek’s Guide to World-Class Manufacturing Plants, and Future Focus: How 21 Companies are Capturing 21st Century Success.

Suggested readings for leadership development in 2011

Awaiting you....

Randy Mayeux has already shared his choices and all are eminently worthy, to which I presume to add a few others.

Please keep in mind that this list is (as are Randy and I) a work in progress.

The Right Values
True North by Bill George and Peter Sims

MY ADDITIONS:
The Executive’s Compass by James O’Toole
The Highest Goal by Michael Ray
The Heart Aroused by David Whyte

The Right Strategy
The Opposable Mind by Roger L. Martin
Mastering the Rockefeller Habits by Verne Harnish

MY ADDITIONS:
The Art of War by Sun Tzu
Unstoppable by Chris Zook
Enterprise Architecture as Strategy by Jeanne Ross, Peter Weill, and David Robertson

Effective Leadership
Fierce Leadership by Susan Scott
Encouraging the Heart by James Kouzes and Barry Posner

MY ADDITIONS:
Maestro by Roger Nierenberg
True North by Bill George and Peter Sims

Effective Communication
Words that Work by Frank Luntz
Made to Stick by Chip Heath and Dan Heath

MY ADDITIONS:
Influence by Robert Cialdini
The Back of the Napkin and Unfolding the Napkin by Dan Roam
Crucial Conversations by Kerry Patterson, Joseph Grenny, Ron McMillan, and Al Switzler

Functional & Effective Teamwork
The Five Dysfunctions of a Team by Patrick Lencioni

MY ADDITIONS:
Organizing Genius by Warren Bennis and Patricia Ward Biederman
Collaboration by Morten Hansen
Team of Rivals by Doris Kearns Goodwin

Cultivating Creativity and Innovation
The Creative Habit by Twyla Tharp
Where Good Ideas Come From by Steven Johnson

MY ADDITIONS:
Freedom, Inc. by Brian M. Carney and Isaac Getz
The Idea of Innovation and The Ten Faces of Innovation by Thomas Kelley
Six Thinking Hats by Edward De Bono
Hare Brain, Tortoise Mind by Guy Claxton

Successful Execution
Execution by Larry Bossidy and Ram Charan

MY ADDITIONS:
Reality Check by Guy Kawasaki
The Other Side of Innovation by Vijay Govindarajan and Chris Trimble
Open Innovation and Open Business Models by Henry Chesbrough

Plus two additional categories:

Leadership Development

MY RECOMMENDATIONS:
Handbook of Leadership Theory and Practice co-edited by Nitin Nohria and Rakesh Khurana
The Talent Masters by Bill Conaty and Ram Charan
The Center for Creative Leadership Handbook of Leadership Development co-edited by Ellen Van Velsor, Cynthia D. McCauley, and Marian N. Ruderman
Extraordinary Leadership co-edited by Kerry Bunker, Douglas T. Hall, and Kathy E. Kram

Employee Engagement & Talent Management

MY RECOMMENDATIONS:
A Sense of Urgency and Buy-In by John Kotter
The Art of Engagement by Jim Haudan
Engaging the Hearts and Minds of All Your Employees by Lee J. Colan
Growing Great Employees by Erika Andersen

The Other Side of Innovation: A book review by Bob Morris

The Other Side of Innovation: Solving the Execution Challenge
Vijay Govindarajan and Chris Trimble
Harvard Business Press (2010)

As I began to read this book, I was reminded of Thomas Edison’s observation, “Vision without execution is hallucination.” Also of a statement by Oliver Wendell Holmes, Jr.: “I don’t care a fig about simplicity on this side of complexity but I would give my life for simplicity on the other side of complexity.” Now consider what Govindarajan and Trimble observe in their Introduction: “There is a Rainier-like summit in the innovation journey. It is the moment a company says yes! That’s a great idea! Let’s take it to the market! Let’s make it happen!…Getting to the summit can seem like the fulfillment of a dream, but it is not enough. After the summit comes the other side of innovation – the challenges beyond the idea. Execution. Like Rainier, it is the other side of the adventure that is actually more difficult. It is the other side that holds hidden dangers. But because the summit itself has such strong appeal, the other side is usually an afterthought. It is humdrum. It is behind the scenes. It is dirty work.”

The “journey” metaphor is appropriate because Govindarajan and Trimble embarked (like Odysseus) on a ten-year journey during which they completed research on a number of well-known and well-respected companies (e.g. Cisco Systems, Hewlett-Packard, IBM, The New York Times, and Unilever) and interviewed dozens of senior-level executives at dozens of other companies that include Aetna, Allstate, Ben & Jerry’s, BMW, Citigroup, GE, Harley-Davidson, Mattel, Procter & Gamble, Sony, and Timberland. What they learned about what works, what doesn’t, and why during efforts to reach “the other side of innovation” is shared in abundance in this book.

The challenge for leaders of innovation initiatives (whatever the scope and nature of those initiatives may be) must help their organization to achieve and then sustain an appropriate balance between “foundational” operations that are on-going and repeatable, and, experimental operations that non-routine and often disruptive. To help prepare leaders to meet this challenge, Govindarajan and Trimble explain how to

• Build a dedicated team
• Define a partnership of the team with the “Performance Engine”
• Obtain support from senior-level executives
• Anticipate and prepare for resistance and conflict
• Achieve buy-in
• Devise and conduct a “disciplined” experiment
• o Focus on learning when evaluating results
• Achieve transparency through effective communication
• Create a framework for accountability

These are worthy objectives, to be sure, but by no means easy to achieve. It is important to keep in mind that all organizations are works in progress and the same is true of those who are involved with them. Credit Govindarajan and Trimble with providing a wealth of valuable information, accompanied by rock-solid advice that isanchored in real-world situations. It is not necessary but, in my opinion, highly desirable to read their earlier book, Ten Rules for Strategic Innovators: From Idea to Execution, first before reading this one.