Unrelenting InnovationHow to Create a Culture for Market Dominance
J-B Warren Bennis Series 1. Aufl.
The hands-on guide for fostering relentless innovation within your company Gerard Tellis, a noted expert on innovation, advertising, and global markets, makes the compelling case that the culture of a firm is the crucial driver of an organization's innovativeness. In this groundbreaking book he describes the three traits and three practices necessary to create a culture of relentless innovation. Organizations must be willing to cannibalize successful products, embrace risk, and focus on the future. Organizations build these traits by providing incentives for enterprise, empowering product champions, and encouraging internal markets. Spelling out the critical role of culture, the author provides illustrative examples of organizations with winning cultures and explores the theory and evidence for each of the six components of culture. The book concludes with a discussion of why culture is superior to alternate theories for fostering innovation. Offers a groundbreaking take on innovation that is driven by a company's culture Shows what it takes to create a culture of innovation within any organization Based on a study of 770 companies across 15 countries, the origin of 90 radical innovations spanning over 100 years, and the evolution of 66 markets spanning over a 100 years Provides numerous mini cases to illustrate the workings of culture Written by Gerard Tellis director of the Center for Global Innovation This must-have resource clearly shows the role of culture in driving relentless innovation and how to foster it within any organization.
Figures and Tables xi Foreword xiii 1 Why Incumbents Fail 1 Why Incumbents Fail to Innovate Unrelentingly 3 The Preeminence of Culture 7 Culture as a Primary Explanation 15 Basis for the Book 17 Conclusion 19 2 Willingness to Cannibalize Successful Products 23 Why Incumbents Are Reluctant to Cannibalize Products 24 Why Willingness to Cannibalize Is Important 28 Understanding Technological Evolution 33 Blinded to an Opportunity: Microsoft Keywords? 39 Crippled by Fear of Piracy: Sony MP3 Player 41 Decline of an Innovator: Eastman Kodak 45 A Cycle of Cannibalization: Gillette's Innovations in Wet Shaving 49 Late Move: HP Tablet 53 Conclusion 54 3 Embracing Risk 59 Sources of Risk: Innovation’s High Failure Rate 59 The Reflection Effect: Asymmetry in Perceived Risk 63 The Hot-Stove Effect: Learning from Failure 65 The Expectations Effect: Hope Versus Reality 68 Innovation’s Gain-Loss Function: Type 1 and 2 Errors 69 Case Histories 75 Gambling on an Embryonic Market: Toyota’s Prius 75 Gambling on Growth: Amazon.com 84 Gambling on Vision: Facebook 90 Gambling on Scale: Federal Express 103 Conclusion 106 4 Focusing on the Future 109 Why Future Focus Is Tough 111 Availability Bias 114 Paradigmatic Bias 116 Commitment Bias 119 Planning for the Future 121 Predicting and Managing Takeoff 122 Targeting Future Mass Markets 126 Predicting Technological Evolution 129 Analyzing Emergent Consumers 134 Conclusion 138 5 Incentives for Enterprise 141 Traditional Incentives: Winning Loyalty 142 Asymmetric Incentives: Turning Failure into Success 143 Making Incentives Work: Economics and Psychology of Incentives 148 Power of Incentives: IBM's Transformation 155 Incentives for Enterprise: Google 157 Incentives for Loyalty: General Motors 163 Incentives for Innovation: 3M 168 Structuring Team Incentives: IBM's Learning from Online Gamers 171 Conclusion 173 6 Fostering Internal Markets 177 Characteristics of Markets 181 Implementing Internal Markets 192 Managing Internal Markets 199 Conclusion 203 7 Empowering Innovation Champions 205 Luck Versus Innovation Champions 206 Characteristics of Champions 208 Testing Luck 210 Champions Versus Teams 212 Champions at the Top Versus the Bottom 214 Distributed Champions: Google’s "Young Turks" Program 216 Serial Champion: Roger Newton 218 Championing Mass Market of the Future: Tata Nano 222 Championing a Music Revolution: Apple iPod 227 Mobilizing an Organization for Innovation: Sony Walkman 231 Steps in Empowering Champions 235 Conclusion 236 8 Culture Versus Alternate Theories: Arguments and Evidence 237 Micro-Theories 238 Macro-Theories 250 Conclusion 260 Notes 263 Bibliography 289 Acknowledgments 307 The Author 309 Index 311
Gerard J. Tellis is a professor of marketing, management, and organization, Neely Chair of American Enterprise, and director of the Center for Global Innovation, at the University of Southern California Marshall School of Business. Dr. Tellis is an expert in innovation, advertising, global market entry, new product growth, quality, and pricing. His book, Will and Vision, was cited as one of the top 10 books in business by the Harvard Business Review and was the winner of the American Marketing Association Berry Award for the best book in marketing over the last three years.
"Through decades of rigorous research, Professor Gerard Tellis posits a powerful thesis: that the internal culture of a firm is the primary driver of innovation. . . . This book is deep in theory and rich in insight." —From the Foreword by Vijay Govindarajan In Unrelenting Innovation, Gerard Tellis (a noted expert on innovation, advertising, and global markets) makes the convincing case that the culture of a firm is the crucial driver of an organization's ability to innovate. Using powerful cases to illustrate his message, Tellis shows how changing an organization's culture can overcome the main barrier to innovation—the complacency of success by current incumbents. The ideal culture of an innovative organization is comprised of three traits and three practices. Innovative organizations should be willing to cannibalize successful products, embrace risk, and focus on the future. Leaders can ensure that these traits are incorporated into their organization's culture by introducing the following three practices: provide incentives for enterprise, empower product champions, and encourage internal markets. To bolster this thesis, Tellis outlines why transforming an organization's culture is superior to alternate theories for fostering innovation. Based on multiple research studies and grounded in practical recommendations, Unrelenting Innovation contains a wealth of valuable tools to help senior leaders implement the practices that will foster a culture of relentless innovation. The book is filled with illustrative examples of established companies that have stumbled in recent years due to lack of innovation and rising new stars that have become innovative giants.
Praise for Unrelenting Innovation "I would rate Unrelenting Innovation as one of the best business books I have read. All CEOs need to read it to avoid the incumbent's curse. Unrelenting Innovation offers brilliant insights into the need for innovation and managing the risks of innovation." —Philip Kotler, author and S.C. Johnson & Son Professor of International Marketing, Kellogg School of Management, Northwestern University "A brilliant tour de forceon how firms can overcome the incumbent's curse and develop the culture to drive big innovations that will provide growth platforms and prevent irrelevance. Supported by case studies and a practical theory of how innovation-oriented culture is created, the book will be a classic." —David Aaker, author and vice chairman, Prophet "A brilliant and thought-changing book on why many successful companies fail to innovate and how to overcome an internal culture of resistance. Tellis is a master storyteller!" —Jagdish Sheth, author, consultant, and Charles H. Kellstadt Professor of Marketing, Goizueta Business School, Emory University "The risk of not carefully reading and implementing the lessons of Tellis' relentless imagination will most surely increase the risk of organization?stagnation, if not failure." —Warren Bennis, author and Distinguished Professor, University of Southern California "Very few people are better qualified than Tellis to write about innovation and market dominance. Drawing on over 20 years of rigorous, original research, Unrelenting Innovation is a truly comprehensive and deeply serious book about innovation. There is more insight and evidence here on one page than in many business books put together." —Jaideep Prabhu, author and Jawaharlal Nehru Professor, Judge Business School, Cambridge University "Tellis makes a compelling case that firms with an unrelenting ability to keep innovating are sustained by their distinctive cultures. The payoff from sustaining a culture of organic growth through innovation is a rate of growth that competitors can't match." —George Day, author and Geoffrey T. Boisi Professor, Wharton, University of Pennsylvania