The Innovator’s Method – Bringing the Lean Startup Into Your Organization
Nathan Furr and Jeff Dyer
Harvard Business Review Press
The best thing about this book is that there isn’t much new in it. Yet it’s a must read and will join a dozen or so of the top business books on my shelf. I read a lot – I keep a few.
The real value is not that it tears down old ideas and thinking but the way it brings together a lot of disparate ideas into one “unified theory” of innovation.
Don’t let the title fool you. This book is about innovation, and heavily draws on the ideas of the Lean Startup. But it is not solely aimed at start-ups. In fact, the first “start up” that it discusses, has 8,000 employees. What it does is take the best of what drives innovative thinking in real world businesses and takes that to a methodology that works equally well in companies off all sizes.
Equally this book is not just for the CEO or whomever is in charge of “product development”. It offers sound processes and advice for everyone who needs to bring practical innovation to their area, be it work group, division or company. Nor does it matter whether you deal internal or external customers. The “customer” is anyone with a problem. Nor does the book require a pile of cash or tons of resources. Quite the opposite. It offers good advice on how to reduce the cost, time and amount of resources allocated to innovation – at least in the crucial early stages before you have a sound business model/business case.
For my money, in a world where CIOs and IT leadership are challenged to become more innovative with few resources this book is a must read.
The authors start with a premise: Current company and management structures inhibit modern innovation, not because these structures are inherently bad, but because they really don’t encourage innovation. “Current management excels,” they write, “when the problems are standard and the interdependencies known.” Echoing Roger Martin in “Design of Business,” the authors say “corporations are designed for execution, not innovation” because the “focus on execution crowds out innovation.”
A skeptical reader would ask, “aren’t there companies that were excellent at execution who also managed to innovate?” What’s changed? The authors would maintain that few do this well and fewer can sustain this over time. Moreover, the authors assert, in today’s world, the sheer volume and velocity of innovation makes it almost impossible to keep pace without a dedicated effort and a clear method.
Why a method? That’s one place where this book shines. All too many business books admire the problem but don’t grapple with the reality. With titles like, ‘If it ain’t broke, break it!’ these books ignore one real reason why companies don’t innovate. It’s not a lack of good ideas. Business people are not stupid, or lacking in ideas. Any business leader worth their salt learned ages ago that we need to listen. Many do. But we pursue few of these great ideas? Why? Yes, we’re busy, but there is another reason – risk. We talk about taking risks, but few companies really encourage bold risks. No matter how you stack it, promotions come from increased earning, not increased learning. A brilliant new idea without a solid case for payback is a one way ticket to what we used to call the “round file.”
One of the key arguments for the authors’ method is that it will minimize the risk and costs while encouraging the new ideas that lead to increased innovation. It’s a virtuous cycle.
So how do they minimize risk? The authors maintain that the problem isn’t that companies don’t innovate, but that companies don’t take some very quick steps and practical steps to minimize risks before they launch new innovations. As they succinctly put it, “don’t try to scale it before you nail it.” As a result, even those companies that do make an earnest attempt to innovate and invest heavily all too often fail after making substantial investments.
The Innovation Method
The authors put forward a four stage method that they maintain increases innovation and reduces risk. The stages are, in order – Gaining Insight, Deeply Understanding the Problem, Development and Evaluating Solutions and finally, developing a Business Model. Once again, it’s not a new concept. If fact for those who’ve studied Demming’s familiar Plan, Do, Check, Act – you will recognize the four stages and deep principles that underlie TQM, Lean and a host of methods of innovative business transformation.
The magic isn’t in the method, it’s in how the author’s take those insights and make them relevant to those of us in the real world. Partially it’s the way they illustrate this in practical terms with real companies and real issues. Secondly, it’s the depth and insight that they offer in each particular area.
Their first chapter walks you through the overall methodology Even at the overview stage it offers some in-depth insights to illustrate the methodology. Sage advice such as “until you’ve figured out how to delight a customer, don’t even think about a business model” would seem like a platitude if it were not preceded by some strong structure on how exactly one should “figure out how to delight a customer.” Subsequently, the understanding that the wrong business model can kill an innovation, explores an example of how a real company segregated their business models into three groups and how these were different – including the metrics they used for each.
Likewise, if you have been involved in start-ups, or dealt with innovation first hand, you will recognize insights that speak to a true understanding. One quick mention of something the author’s call the “pivot” – where an initial idea is transformed in the early development rings true. Working with the University of Waterloo in launching new entrepreneurial businesses my colleague Doug Sparkes and I have frequently isolated what the author’s call a pivot as essential for the success of any new company. They show the ability to engage with, listen to and learn how to delight a customer – skills essential for a successful startup. That’s only one example – if you are experienced in this arena, you will spot the depth of their thought in the way the authors have caught these essential details.
Like many business books, the entire thesis and overview is in the first chapter or two. Yet despite that, I felt compelled to read on to get to the in-depth of each of the steps and in key areas that support these steps:
The book is well worth a read for the CIO or for anyone trying to lead innovation. I found it valuable – and without seeming egotistical, I’ve published my share of work in this area and had over a decade of experience with successful startups. Even with that, my copy has already received the highest honour a business book can get from me. I love my Kindle and read voraciously on it. I love Audible and use it to turn traffic into learning. But the “keepers” are the books I still have in hard copy – heavily annotated with notes and comments. This is one of those.
I’d love to get your comments – agreeing or disagreeing. You can leave them here or send me an email at email@example.com or on twitter @CIOJimLove If you interested , I’ll also be posting a discussion into our CanadianCIO forum on LinkedIn.