Getting to "Aha!"


The Five Disciplines for

Creating What Customers Want

By Curtis R. Carlson

and William W. Wilmot

Crown Business -- 368pp -- $27.50

( below)

Editor's Review

Three Stars
Star Rating

The Good A persuasive argument for a methodical approach to innovation.

The Bad Could have used more examples beyond those from the author's company.

The Bottom Line A worthwhile read for any executive trying to stay ahead of the competition.

How is it that some inventors like Thomas Edison are able to crank out one breakthrough after another, while others can spend a lifetime searching in vain for a single great idea? Similarly, why do some companies like Apple (AAPL ) prove themselves capable of constantly churning out hit product after hit product, while other once-hot enterprises like Polaroid wither or die?

These questions have long vexed scientists, business executives, and management gurus alike. In their new book, Innovation: The Five Disciplines for Creating What Customers Want, co-authors Curtis R. Carlson and William W. Wilmot argue that true innovation isn't, as Hollywood has it, the result of a "Eureka!" moment in a forlorn lab.

Instead, they contend it more often springs from a disciplined approach to identifying and then delivering new products or services that fill a societal need. Indeed, Carlson, chief executive of SRI International, a contract research and development firm in Menlo Park, Calif., believes that the more methodical and systematic companies are in their approach to innovation, the greater their chances at success. That gives hope to those of us who aren't named Da Vinci or Jobs, and makes this book a worthwhile read for any executive trying to keep his or her company ahead of the competition.

Carlson practices what he preaches. When he became CEO of the storied research shop in the 1990s (SRI had gained renown as far back as the 1970s for inventing everything from the computer mouse to robotic surgery), the firm's revenues were stagnant and its innovation pipeline had dried up. Carlson analyzed the situation and realized that the firm's approach to R&D was scattershot, and there was no framework for identifying and championing promising ideas.

But over the next decade, Carlson returned SRI to double-digit growth by instituting the "five disciplines" that he and Wilmot dissect in workbook fashion: identifying important customer needs, creating solutions that fill those needs, building innovation teams, empowering "innovation champions" who keep the effort on track, and, finally, aligning the entire enterprise around creating value for customers. To that end, Carlson and Wilmot suggest spending a lot of face time with customers to get real-time feedback on your ideas from the outset. "Get out of your office, hit the road. The best source of information about whether your value proposition is on the right track is your prospective customers and partners," they write.

Contrary to what most executives might believe, the authors argue that building an innovative company doesn't require a cultural overhaul. "You do not have to totally change your enterprise, fire all your people, or import arcane practices that no one understands," they advise. Among the alternatives they offer: the "Watering Hole," a brainstorming session where new ideas undergo a formal review process. Carlson runs this forum every two to six weeks at SRI, with five to 20 participants from different departments, including the team pitching an idea, technical and legal staff, and a market expert, as well as current or potential business partners.

Presenters make a five- to 20-minute presentation, followed by 10 to 30 minutes of feedback around four key questions: What is the market need? What is your approach to addressing this need? What are the benefits vs. costs of your approach? And how do these benefits compare with the competition's? Carlson and Wilmot, who helped create the innovation workshop SRI runs for outside companies, say their experience at SRI has proven this format spurs critical collaboration among once-siloed departments.

"Watering holes are an excellent way to eliminate organizational boundaries, which are major barriers to innovation in most companies," they write.

Still, the authors caution that even the best procedures are no shortcut to perseverance. They recount how when a colleague told Thomas Edison that he'd again failed to find a filament that would not burn out, Edison replied, "I didn't fail. I just found something else that didn't work." And sometimes the ultimate market for a great idea isn't the one you first imagined. Carlson and Wilmot note that when one SRI engineer developed a technique for printing metals on paper -- thinking it could revolutionize the greeting-card business -- the idea was scrapped after the realization that the potential market was small, and there were already cheaper alternatives. But further research showed that a better application for the technology was printing cheap antennas for Radio Frequency Identification Device tags. In the pursuit of innovation, there doesn't always have to be a Eureka moment.

By Dean Foust

    Before it's here, it's on the Bloomberg Terminal.