Steve Blank (1953–)

Who he is: Seasoned entrepreneur who lectures at Berkeley and Stanford (www.steveblank.com)

If you read one book, read: The Four Steps to the Epiphany (Cafepress.com, 2005)

His most important innovation lesson: A start-up is a “temporary organization searching for a repeatable and scalable business model”—a structured search process maximizes your chances of success.

A colleague pointed me toward Steve Blank’s writing in early 2010. After reading one blog post, I was hooked. Blank has serious entrepreneurial chops. He worked at Convergent Technology, Zilog, and many other successful start-ups and played a role in starting E.piphany, Mips Computers, Ardent, and Rocket Science Games. Unlike many entrepreneurs who distill their success to a simple formula of “I’m smarter and work harder than you,” Blank had his eye out for a systematic way to manage the creation of new ventures.

Blank’s The Four Steps to the Epiphany summarizes his guidance. He tells innovators that their first plan is sure to be wrong. As a result, innovators should follow a disciplined process of “customer discovery,” in which they get into the market as quickly as possible with what Blank calls a “minimal viable product.” Selling that product to customers helps innovators learn how their plan is wrong. The key to success, Blank argues, is for innovators to use marketplace feedback to change their plan, or, in Blank’s words, “to do a pivot.”

One of Blank’s key disciples is Eric Ries, who has further built out Blank’s concepts by developing a complementary set of ideas captured in what Ries calls the “lean start-up.” Ries borrows from the concepts of agile development, a technique that emerged over the past decade to manage the creation of new software programs. The basic concept is to rapidly release new versions of software and improve that software according to market feedback. The lean start-up tries to shorten the time between Blank’s pivots. Blank’s writing is lucid, practical, and often entertaining.

Clayton Christensen (1952–)

Who he is: Harvard Business School professor and Innosight cofounder (www.claytonchristensen.com)

If you read one book, read: The Innovator’s Solution, with Michael E. Raynor (Harvard Business School Press, 2003)

His most important innovation lesson: Doing everything right can leave a successful organization susceptible to attack from a disruptive innovator who changes the game with a simple, accessible, or affordable solution.

Like many of the people on this list, Christensen lives at the intersections. Before becoming an academic, he had a successful career as a consultant (for the Boston Consulting Group) and a business leader (serving as the CEO of a start-up advanced-material company that raised millions in venture capital).

He is remarkably persistent. In 2002, I started two projects with Christensen to apply his research to the education and health-care industries. The original aim was to produce books on both of these industries by 2003. By early 2003, it was clear that the deadline wasn’t even close to realistic. Christensen persevered, however, and the books (with different coauthors) came out in early 2009.

He’s also probably the nicest human being you will ever meet. A consummate storyteller, Christensen has a gift of being able to spot patterns and formulate theories and frameworks that bring great clarity to a range of growth-and innovation-related challenges.

He is best known for his concept of disruptive innovation, which formed the backbone of his first and still most cited book, The Innovator’s Dilemma. The book—described by then Intel CEO Andy Grove as “lucid, analytical, and scary”—argued that the roots of failure for many large companies were the principles of good management. Companies would do everything they were supposed to—listen to their best customers, innovate to meet their needs, produce the best products on the market, charge high prices, and enjoy soaring stock prices—and get caught off guard when a seemingly irrelevant competitor changed the game with a disruptive innovation that drove industry transformation through simplicity or affordability.

Christensen’s fingerprints are on many other key innovation concepts. He has argued eloquently that business researchers should be trying to advance good theory. That is, they should develop robust categorization schemes of the circumstances facing managers and develop causal statements that predict how certain actions lead to certain results. I recommend The Innovator’s Solution over The Innovator’s Dilemma and Christensen’s half-dozen other books, because the Solution tightly recaps the Dilemma in its second chapter and lays out the foundation for the work done by many practitioners in the 2000s.

Peter Drucker (1909–2005)

Who he is: Legendary management guru and longtime professor at the Claremont Graduate University

If you read one book, read: Innovation and Entrepreneurship (HarperCollins, 1985)

His most important innovation lesson: “The customer rarely buys what the company thinks it is selling him.” Companies need to take a customer-first perspective to succeed with innovation.

Peter Drucker is generally acknowledged as the most influential management thinker of the last century. Key to his influence was an uncanny ability to bring piercing clarity to a variety of topics. He was quite prescient, too, identifying, among other things, the rise of knowledge workers in a postindustrial economy. His old writing holds up remarkably well. Just look at some of these choice quotes:

• “The purpose of a business is to create a customer.”
• “The customer rarely buys what the business thinks it is selling him.”
• “The best way to predict the future is to create it.”
• “Plans are only good intentions unless they immediately degenerate into hard work.”

My favorite Drucker quote (the second on the list above) actually predates his focused writing on innovation by about twenty years. His seminal innovation work was the 1985 book Innovation and Entrepreneurship. In that book, Drucker argued that innovation could be a purposeful act. Drucker summarized the book in a classic Harvard Business Review article titled “The Discipline of Innovation.” The penultimate paragraph is classic Drucker—clearly written, but noticeably different from prevailing mind-sets: “In innovation, as in any other endeavor, there is talent, there is ingenuity, and there is knowledge. But when all is said and done, what innovation requires is hard, focused, purposeful work. If diligence, persistence, and commitment are lacking, talent, ingenuity, and knowledge are of no avail.”

Drucker’s thinking has spread in many ways. The personal coaching he provided another person on this list of innovation masters—A. G. Lafley—helped inform Lafley’s quest to bring predictability to innovation at Procter & Gamble. You can even buy calendars that give you your daily dose of Drucker. I’m sorry I never got the chance to meet this man, who passed away at the age of ninety-five in 2005.

Thomas Alva Edison (1847–1931)

Who he is: Legendary innovator, credited with creating the light bulb, the phonograph, and other innovations

If you read one book, read: The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World, by Randall E. Stross (Crown, 2007)

His most important innovation lesson: “Genius is 1 percent inspiration and 99 percent perspiration.” If you aren’t sweating, you aren’t innovating.

Edison is clearly an inspiration for modern-day innovators like Steve Jobs and Richard Branson. Of course, much of Edison’s life has now descended into myths that bear decreasing resemblance to reality, but every innovator should study the basic way he went about his work. So seminal are his contributions that I’ll keep it brief here. In the next chapter, I’ll describe how innovators need to release their inner Edison.

Richard N. Foster (1941–)

Who he is: The leading light on innovation at McKinsey & Company for two decades, now serving on a variety of boards (including Innosight’s from 2006 to 2012) and teaching at the Yale School of Management

If you read one book, read: Creative Destruction, with Sarah Kaplan (Currency/Doubleday, 2001)

His most important innovation lesson: To outperform the market, you have to change at the pace and scale of the market, without losing control.

I remember my first meeting with Dick Foster. It was a late afternoon in 2006 in Innosight’s offices in Watertown, Massachusetts. I was a bit awestruck. When I was an analyst at McKinsey in the mid-1990s, Foster’s name would be spoken in hushed terms. Not only was he an intellectual dynamo, but he also led the firm’s relationship with one of its most important clients, a large, diversified health-care company.²

I had read both of his books (his first book carried the wonderful title of Innovation: The Attacker’s Advantage) and knew of his contributions to the field of innovation. In his first book in the mid-1980s, Foster introduced the notion of technological S-curves. The simple notion is that if you drew a chart with cumulative time on the horizontal axis and technological progress on the vertical access, almost any technology would have a chart that looked like an S. It would take time for scientists to figure out the technology the chart tracked, so early development would be slow. Then it would inflect, and development would come rapidly. Importantly, it would then inflect again and development would again slow. Foster used this and other frameworks to show why attackers typically had the upper hand when it came to innovation. His research laid the foundation for Christensen’s work a decade later.

Creative Destruction used a large sample database to argue that any company hoping to outperform the market has to change at the pace and scale of the market, without losing control. Foster found, counterintuitively, that long-term survivors (which he called “operators”) underperformed the market, because markets created new things and disposed of (in Foster’s language, “traded”) old things.

Foster is intensely intellectually curious. If you ever meet him, ask him who made Brunelleschi’s dome, and be prepared for a fascinating two-hour discussion on creativity.

Vijay Govindarajan (1949–)

Who he is: Tuck School of Business at Dartmouth Administration professor (www.vijaygovindarajan.com)

If you read one book, read: Ten Rules for Strategic Innovators, with Chris Trimble (Harvard Business School Press, 2005)

His most important innovation lesson: Existing companies that want to master “strategic” innovation have to carefully borrow some core capabilities, thoughtfully forget others, and systematically learn selected new skills.

I first met Govindarajan at a conference in 2004. He looked me up and down and said, “You aren’t related to Bob Anthony, are you?” Turns out that my grandfather served as a source of inspiration that led Govindarajan to apply to Harvard’s MBA program. The two ultimately coauthored several accounting books (including the scintillating Management Control Systems). If you ever have the opportunity to hear Govindarajan speak, take it. He and Christensen are the two best speakers on this list. Like Christensen, Govindarajan is a genuinely nice guy.³

Over the past decade, Govindarajan has primarily focused on how corporations can manage what he calls “strategic,” or “Box 3” innovations, which involve creating new markets or targeting new customers. He notes how important it is for strategic innovators to carefully manage how they interact with the core business, because the core “DNA” can sometimes run counter to what innovators are trying to accomplish. Govindarajan guides innovators to thoughtfully forget some pieces of that DNA, selectively borrow others, and learn to fill in the cracks.

Govindarajan has recently written about other important concepts. In 2009, he wrote a Harvard Business Review article (with Chris Trimble and General Electric chairman Jeffrey Immelt) that introduced the term reverse innovation. The article, titled “How GE Is Disrupting Itself,” urged companies to move from viewing branches in emerging markets as vehicles to distribute Western-developed products to developing market-appropriate products locally. In 2010, Govindarajan and Trimble released The Other Side of Innovation, which details execution. Both the article and the book are worthwhile reads.

Bill James (1949–)

Who he is: Baseball writer, historian, and senior adviser to the Boston Red Sox (www.billjamesonline.net)

If you read one book, read: The New Bill James Historical Abstract (Free Press, 2001)

His most important innovation lesson: Looking at old data in new ways can highlight counterintuitive patterns that overthrow orthodoxy.

James is probably the least obvious person on this list. But the way he has brought insight to the baseball diamond has important lessons for innovators. I have always been a baseball fan.⁴ In fact, my mother suggests that any acuity I have around mathematics comes from learning how to quickly calculate batting averages.

Bill James began writing an annual book called The Bill James Baseball Abstract in 1977. In those books, he would present a raft of nontraditional statistics, like situational performance, and write essays that used statistics to provide a fresh perspective on the common wisdom that had ruled the game for decades. I got my first copy of The Bill James Abstract in the mid-1980s, and it nearly caused my ten-year-old head to explode. Sure, much of James’s writing went well over my head, but I couldn’t miss that this was someone who was debunking much of the conventional wisdom in baseball.

James was on the cutting edge of a field known as sabermetrics, which is named after the Society of American Baseball Research. The findings from these research efforts have overturned orthodoxy and influenced in-game tactics, investment decisions, and personnel management. James is not the most academically pure or statistically minded of the sabermetricians, but he combines great instincts with a compelling writing style. His work was the inspiration for my 2009 Harvard Business Review article “Major League Innovation.”⁵

James’s work is applicable to innovation because the essence of what he and other sabermetricians do is what innovation scholars seek to do. These researchers look for patterns and data that bring greater predictability to questions such as these: What exactly is it that creates value? Which statistics are most meaningful? Which statistics result from skill versus luck or other extraneous factors? Which strategies actually create value, and which do not? Just as James and his colleagues have driven a revolution in baseball, so have the other people on this list laid the foundation for a revolution in innovation.

A. G. Lafley (1947–)

Who he is: Former chairman and CEO of Procter & Gamble

If you read one book, read: The Game-Changer, with Ram Charan (Crown Business, 2008)

His most important innovation lesson: Innovation is a process that can be managed and measured; the key to successful innovation is a “consumer is boss” mind-set.

I met Lafley in 2008 at a newspaper industry conference in Washington, D.C., where he was participating in a panel discussion I was facilitating. The topic was transformation. Then presidential candidate Barack Obama had visited the previous day, with the “neutral” journalists still buzzing about his charisma and charm.⁶ I knew P&G well from working with various parts of the company over the past few years, but only knew Lafley by reputation. Lafley had just released his book, and after the panel discussion, he asked if I wouldn’t mind joining him at a few more events throughout the year to promote the book’s messages because he enjoyed the talk-show-style discussion format. I happily accepted.

Lafley’s core message is that innovation should be treated in a disciplined way. That message has teeth from someone who is widely credited with transforming P&G from a stodgy household staples company into a vibrant health and beauty company. Further, one of Lafley’s great gifts is explaining complicated concepts in simple-to-understand terms—he calls it “Sesame Street simple” after the popular U.S. television program aimed at toddlers and preschoolers. His book is a wonderful description of how P&G approaches innovation. I regularly refer to my notes from our discussion at the Front End of Innovation conference in Boston in May 2008.⁷ The details of the consumer-is-boss approach described later in the book are ripped straight from Lafley’s stump speech.

To repeat a theme, Lafley comes across as a genuine, down-to-earth guy. After one event in Arizona, we attended a dinner party at the home of P&G’s then head of external relations. Since it was a weekend, I had brought my wife and son Charlie, who was two years old at the time. My host was about to show Charlie a small toy tractor that her grandkids liked to play with when Lafley arrived. Lafley immediately left the party to follow Charlie outside and watch him ride the tractor, his face beaming with excitement.⁸

Roger Martin (1956–)

Who he is: Dean of the Rotman School of Management, University of Toronto

If you read one book, read: The Design of Business (Harvard Business Press, 2009)

His most important innovation lesson: Managers increasingly need to take ors and turn them into ands.

Martin comes across as very thoughtful. Consequently, it is probably not a surprise that he ended up in Toronto. To generalize a bit, the U.S. East Coast is the home of structured strategy, the kind espoused by Michael Porter and colleagues at Harvard Business School. The U.S. West Coast is the home of dynamic entrepreneurialism and, increasingly, design thinking typified by Stanford’s Hasso Plattner Institute of Design (called the d.school) and IDEO. Martin sits intellectually (if not quite geographically) between these two poles.

His mission is to live at the intersections, helping managers to integrate different schools of thought. His training came from the Monitor Company, which in the 1980s and early 1990s was the place to be if you wanted to intersect academic research and applied consulting. Since becoming dean of Rotman in 1998, Martin has worked to create a unique position for himself and his school. Martin’s first book, The Opposable Mind, argued that executives increasingly had to develop the mental acuity to deal with seemingly paradoxical demands (a notion picked up and developed further by Cisco executive Inder Sidhu in his 2010 book, Doing Both). In The Design of Business, Martin made the compelling case that the principles of design thinking could be powerful tools in the strategist’s arsenal.

Martin isn’t a pure theoretician. He created an organization at Rotman called DesignWorks, which essentially provides business design services to companies. In 2009, I worked with a Procter & Gamble team that had worked with a student team from DesignWorks. The output from the student team was as good as anything produced by a top-tier innovation specialist. With his clear, distinct perspective on strategy and innovation, Martin is worth following closely.

Michael Mauboussin (1964–)

Who he is: Managing Director and Head of Global Financial Strategies, Credit Suisse

If you read one book, read: More Than You Know (Columbia University Press, 2007)

His most important innovation lesson: Breakthrough insight can come from applying lessons from nonobvious fields to your problem.

I had heard about Mauboussin in glowing terms from Christensen before meeting him at a 2004 conference. He is a fascinating guy. Like Martin, he straddles the intersections. By day he is an investment strategist for a massive financial institution. By night he is a scholar, affiliated with the Santa Fe Institute and an adjunct faculty member at Columbia University since 1993.

Mauboussin has the rare ability to pick up an academic idea that seems to have nothing to do with finance and spin a cogent analysis of the concept’s implication for strategists and investors. One of my favorite chapters in More Than You Know talked about how the Colonel Blotto game (and you aren’t alone if you don’t know what that is) provides useful insights for financial investors. Mauboussin takes on provocative topics, such as, Can a company actually influence the makeup of its shareholders? Is persistence in investment outperformance real? Is investment luck or skill?⁹ When I once asked him what he read, he named the New York Times, The Economist, the Wall Street Journal, Fortune, Nature, Scientific America, and the legion of articles that fans and friends send to him.

Rita McGrath (1959–)

Who she is: Columbia University professor (www.ritamcgrath.com)

If you read one book, read: Discovery-Driven Growth, with Ian MacMillan (Harvard Business Press, 2009)

Her most important innovation lesson: Your first idea is wrong, so, as quickly as possible, implement a careful plan to learn which of your assumptions are flawed.

McGrath looks like a serious academic. She publishes in academic journals, attends high-minded affairs like the annual Davos conference, and is a well-regarded teacher at Columbia University’s executive education program. But she “speaks practitioner.” The books she writes with her long-term collaborator Ian MacMillan of Wharton are filled with simple, helpful tools. For example, if you go to the companion Web site for Discovery-Driven Growth, you can download a tool called the BareBones NPV, which allows you to create a thumbnail financial projection for your business idea.

McGrath counsels innovators to always start with an answer and then to work backward to map out assumptions that would need to be true for that answer to be plausible. Develop a discovery-driven plan, she says, to test the most critical assumptions. Be prepared to adjust the plan according to what you learn. This approach can end up dramatically accelerating innovation. McGrath also guides leaders to think strategically about innovation. She has a simple template to capture the different ideas that constitute a company’s growth portfolio. Working through the template almost always sparks fantastic strategic discussions.

McGrath’s writing illustrates the wide-ranging applicability of her ideas, drawing on examples from Fortune 500 companies, small local businesses, and personal life. For a shorter treatment of the topic, check out her and MacMillan’s 1995 Harvard Business Review article “Discovery-Driven Planning.” It is a classic.

Joseph Schumpeter (1883–1950)

Who he is: Austrian economist

If you read one book, read: Capitalism, Socialism, and Democracy (Harper & Brothers, 1942)

His most important innovation lesson: “The problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them”; sometimes you have to destroy in order to create.

We live in an interconnected world. Schumpeter is widely credited for coining the term creative destruction, which became the name of Richard Foster’s 2001 book. Schumpeter was friends with Peter Drucker’s father. Drucker, along with Roger Martin, ended up being a personal adviser to A. G. Lafley, who graduated from Harvard Business School the same year Clayton Christensen entered HBS. Whew!

Schumpeter was the intellectual father of the study of innovation. Unlike so-called neoclassical economists, he presented his work largely free of complicated mathematical equations. His seminal book was, in fact, an academic argument about different economic systems. Schumpeter argued that entrepreneurs who unleashed the power of creative destruction kept large companies that might abuse their market power in check. This creative destruction, he argued, was what made capitalism such a powerful model. Whereas most economists focused on Adam Smith’s so-called invisible hand that balanced supply and demand, Schumpeter talked about how innovation was the most important force for change in a market and society. Most people connect innovation with creation—Schumpeter forces people to think about destruction as well.

My intention in introducing you to these masters of innovation was to highlight key innovation lessons and to point out where you could go to learn more. The next two chapters summarize the lessons and warnings from these masters and from my own personal innovation journey.