By: Satish Nambisan and Mohanbir Sawney, Upper Saddle River, NJ : Wharton School Publishing , 2008 . 276+xxiv pages. Review by: Laurence P. Feldman
For many years, the development of innovative products has been touted as a shield against increased competition, particularly as the scope of that competition has become worldwide. Historically, in the pursuit of such products, firms have played the new product development game close to their vests, closely guarding information on new product development from outsiders. It was assumed that the firm in question knew everything in its area of endeavor and possessed the greatest capability for capitalizing on it.
Two different developments have shown that this firm-centric, not-invented-here assumption is increasingly counterproductive. The first was the publication of The Innovator's Dilemma (Christensen, 1997), which made a case for the fact that many significant innovations have their origin outside an industry and are often not recognized as competitive by that industry's members until it is too late.
Second, in recent years, developments in transportation and communication have not only promoted the development of worldwide markets but also have made it easier to draw on far-flung capabilities and knowledge that formerly were difficult or impossible to access. The effect has been to undermine the critical assumptions of the firm-centric approach while making it possible for firms to create new products collaboratively by using a network-centric approach to innovation. It is this approach that the authors describe as “the global brain.”
Network-centric innovation (NCI) is defined by the authors as “… an externally focused approach to innovation that relies on harnessing the resources and capabilities of external networks and communities to amplify or enhance innovation reach, innovation speed, and the quality of innovation outcomes” (p. 63). While the concept of NCI is not difficult to grasp, Global Brain provides a useful, comprehensive, and straightforward guide on how to implement such a program.
The authors develop a framework for this by describing four models of NCI, each based on the structure of the innovation space, whether this space is defined or emergent, and the nature of the network leadership. The four models, illustrated by real-world examples, are as follows:
The Orchestra: In this situation, the innovation space is relatively well defined, with a single, dominant firm serving as the network leader.
The Creative Bazaar: Where a dominant firm shops for innovations at various stages of development that are consistent with its brand and that it can commercialize.
The Jam Central: Typified by an improvisational, group activity operating in an ill-defined innovation space with no predesignated leader.
The Mod Station: Concerned with modifying or leveraging an existing product, process, or service, governed by the norms and values of a community rather than by centralized direction from a leader.
With these as a conceptual foundation, the authors devote to each model an entire chapter that discusses systematically the characteristics associated with each and that gives examples of a variety of firms and situations to which they apply.
One such example that illustrates the Orchestra Model is the innovative approach Boeing has taken to the development of the forthcoming 787 Dreamliner. In this endeavor, Boeing acts as the network leader who defines the innovation space in terms of the specifications of the new aircraft. Its innovation role is defined as that of an architect: integrating the innovative efforts of global partners, such as Dassault Systems, Fuji, and Kawasaki.
Network governance by Boeing is achieved by formal agreements with its partners, through trust, and by other means. Knowledge management for the project involves the use of “Global Collaboration Centers” (p. 93) at all locations, while intellectual property rights are retained both by patents and other formal instruments.
The explanations and examples given are remarkably clear and straightforward, especially given the complexity of the subject. Furthermore, the explanation of each example is accompanied by an excellent exhibit (misleadingly labeled “table”) describing the elements of network-centric innovation. These are such a good summary that they almost make it possible to skip the surrounding text.
While a conceptual framework for improved innovation is useful in thinking about the problem, in the end it is the execution that counts. Chapter 9, “Deciding Where and How to Play,” is the first of two chapters on this topic. A major aspect of this chapter is the determination of which of the four models is applicable to the circumstances of the reader's firm. Once that is identified, the considerations associated with that model are described for not only those who are leaders but also other participants in the network.
Chapter 10 deals with what may be the most intractable issue in establishing NCI in the firm: the need to overcome organizational obstacles. These include the need to change obstructive attitudes such as WKE (we know everything), which leads to the NIH (not-invented-here) tendency to reject the role of “outsiders” in innovation.
The last section of the book is devoted to such practical issues as determination of the trends that drive the globalization of innovation, the kind of partners that should be used to establish NCI, and the role of less developed countries such as China and India.
In the final chapter, the authors make a pitch for the inevitability of NCI: “… Tapping into the Global Brain is no longer a matter of choice. It is more a question of how rather than whether, a company should pursue a network-centered innovation strategy” (p. 239). That may be true, but it is wise to recognize the possible pitfalls. For instance, despite the anticipated excellence of the Boeing 787 Dreamliner, the company has run into problems in coordinating the project, which have resulted in ongoing delivery delays. Furthermore, in recruiting Japanese firms that have their own ambitions in the market for civil aircraft, in the future Boeing may have cause to regret stimulating the innovative efforts of potential competitors.
That said, it is important for chief executive officers and others concerned with the innovation function to be aware of the potential and nature of the NCI approach. This well-written, well-organized book on that topic should be high on their reading list.
Released: October 4, 2013, 8:39 am
| Updated: November 20, 2013, 10:22 am