|Book Review: Ten Rules for Strategic Innovators|
10 Rules for Strategic Innovators: From Idea to Execution
Written by: Vijay Govindarajan and Chris Trimble. Boston, MA: Harvard Business School Press, 2005. 224+xxvii pages.
Forget. Borrow. Learn. These are the three challenges established companies must address to give strategic innovation the best chance for survival, according to Vijay Govindarajan and Chris Trimble.
The authors share their theories and findings through the stories of five companies that have launched what the authors call “strategic experiments” (p. xix). These experiments are new ventures that have high growth potential, unproven business models, and great uncertainty, among other factors typical of many start-ups. The authors identify the challenges and expose them through the case studies, provide analysis, and include a short assessment to allow readers to determine if they are facing similar challenges. The authors conclude the last chapter with their set of 10 rules to meet these challenges.
The focus of the book is not incremental innovation but on those products or service ventures that require new business models to survive. Therein lay the challenges. To be successful the new venture, referred to as NewCo by the authors, must compete for the same resources as the established business, CoreCo. It must do so while operating very differently and forging its own path.
Through examples such as Hasbro Interactive, Corning Microarray Technologies, and New York Times Digital, we learn about the three challenges. The first challenge, “forgetting,” (p. 7), shows the powerful influences that the current CoreCo culture and practices can have on the fledgling NewCo. Success depends on NewCo's ability to forget what made the current business successful and on CoreCo's ability to allow NewCo to find the models and processes that are right for the new emerging opportunity.
The second challenge discussed is the “borrowing” (p. 7) challenge, which requires a delicate balancing act between providing NewCo such things as the capital, manufacturing expertise, and technology required while still allowing NewCo to forget. The third challenge, “learning” (p. 8), asks that NewCo be judged on its ability to learn rapidly instead of expecting NewCo to meet specific market or financial projections. Once the three challenges are explored thoroughly, the authors provide 10 rules, such as “Rule 7: NewCo needs its own planning process” (p. 193) executives can follow to overcome these challenges and increase their odds for successful strategic innovation.
Ten Rules is generally well paced and provides sound advice to help established companies create a competitive advantage over start-ups when attacking high-growth, high-risk opportunities. The challenge facing the authors is evident. They have attempted to generalize a very complex problem and to provide specific guidelines for solving it. Though the authors do not provide quantitative research to back their hypotheses, they do provide suitable evidence that their recommended strategy could produce positive results.
This book is rightly targeted at executives of established companies that have time-honored business models and practices. Managers who have been involved in entrepreneurial ventures may find most of the 10 rules to be business as usual, and smaller company managers and innovative entrepreneurs may find the advice and framework too distant for practical application. Executives launching new businesses in established companies will find that Ten Rules offers a reasonable framework to navigate the challenges they will face, and the mantra “Forget. Borrow. Learn” should serve them well.