GET BACK IN THE BOX
Innovation from the Inside Out
By Douglas Rushkoff
10 RULES FOR STRATEGIC INNOVATORS
From Idea to Execution
By Vijay Govindarajan and Chris Trimble
Harvard Business School Press; $29.95
You have to hand it to a guy who declares a new historical era just a few years into it. In Get Back in the Box: Innovation from the Inside Out, Douglas Rushkoff, an author, NPR commentator, and telecommunications guru, asserts that we have entered a new renaissance. To be an innovator in this era, Rushkoff says, companies must first realize that the game has truly changed, and then, as the title implies, return to the expertise that made them successful.
Rushkoff argues that competition and lust for power are vestiges of the first Renaissance and the rise of the individual. What matters now is the "new renaissance" dynamic of connectivity and collaboration, as exemplified by the open source movement. "Our networked reality," Rushkoff writes, "is not about putting...business models online but about enabling the resurgence of the collective, social activities that were lost in the fragmentation of the Industrial Age."
You won't find detailed instructions on how to manage that. Instead, Rushkoff offers a well-researched reflection on the significance of technological and social trends from the caveman forward. His anecdotes about companies that get the new dynamic and those that don't make for entertaining reading, if you don't mind a little cultural criticism with your business.
Rushkoff writes that new renaissance companies create a "living culture" that produces social currency -- a sense of interconnectedness -- that today's consumers value. From cars to PDAs, the things we buy "are all media through which we interact with other people," Rushkoff says. Social currency should arise from "the organic expression of a passionate CEO or the tight-knit group of innovators at the core of a company encountering the equally passionate energy of [customers]." He says this has happened at companies such as Apple Computer (AAPL ), Virgin Airlines, eBay (EBAY ), and Google (GOOG ), where customers help shape the company's offerings.
Who doesn't get it? The Gap, for one. Rushkoff criticizes the retailer for failing to manufacture its own clothing line. While many experts would say that manufacturing overseas can provide a competitive advantage, Rushkoff says that outsourcing has allowed Gap's core capabilities to wither. Competitors such as Sweden's H&M and Spain's Zara have expanded precisely because they keep basic processes in-house, he says, allowing them to be more responsive to trends. Gap could understand customer needs better by going deeper into the clothing business rather than by outsourcing essential functions. In other words, Gap needs to get back in its box.
The best business books recognize the role human nature plays in running a company. And a fundamental understanding of individual frailties and strengths underlies 10 Rules for Strategic Innovators: From Idea to Execution. Authors Vijay Govindarajan, professor of international business at the Tuck School of Business at Dartmouth College, and Chris Trimble, an adjunct professor at Tuck, have written a great primer for both big-company executives charged with overseeing a strategic experiment and entrepreneurial spirits striking out in a new direction.
This is not a quick read. Imagine a complex, articulate semester-long lecture at business school, replete with well-documented case studies of corporations that have tried to implement strategic experiments. From those examples the authors draw 10 major and many minor conclusions. More valuable may be the book's system of "theory-focused planning," a method of learning by repeatedly testing a theory. The authors suggest that assumptions, predictions, and outcomes about a new venture should be discussed openly, tested monthly, and revised frequently. And their guidance on holding managers in a new venture accountable for learning, not just for reaching numeric milestones, is detailed and practical.
What makes 10 Rules stand out is the authors' recognition that strategic experiments must be organized in a way that protects them from the baser human instincts: the employee jealousy, selfishness, and schadenfreude that can kill off even the most innovative ideas.
By Marilyn Harris