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  • Writer's pictureLars Christensen

Driving Innovation from Within by Kaihan Krippendorff

I finished this book in November 2023. I recommend this book 6/10.

Why you should read this book:

You should read this book to find a way to innovate from within a bigger company. This book will give you some strategies to develop ideas that align with the company's current vision/missions, the roadblocks you will encounter, and suggestions on how to get past them.

Get your copy here.

🚀 The book in three sentences

  1. A practical guide on how to start looking at where to innovate within a company.

  2. Make sure your idea aligns with the company's vision/mission.

  3. I will review the SI pyramid with my team and get their reactions.

📝 My notes and thoughts

  • P14. However, as they continue to grow, four factors come into play that invigorate internal innovators and give them great advantage:

  • They have scale that entrepreneurs cannot easily match.

  • They have access to multiple capabilities under one roof, tapping technology and experts from across the organization.

  • They can take advantage of resources their company has to invest. Entrepreneurs must fundraise continually.

  • They can diversify risk. By making multiple bets, knowing some will fail but others will work, they can make the returns from innovation predictable.

  • P22. Most innovations today, are not from startups; they come from big companies, like GE, McDonalds, Microsoft, etc.

  • P24. There is a core process that defines the internal innovator. It starts with the notion, validated by research, that first and foremost, they are people who seize opportunities. They do so by doing four things well.

  • They discover new opportunities.

  • They evaluate and choose which opportunities to explore.

  • They take autonomous action to move on those opportunities.

  • They mobilize resources while operating within a dispersed environment; that is, they are able to find capital and talents needed to pursue an opportunity and rally those resources even if they do not have direct influence over their course.

  • P29. But when I asked why he didn't just quit and go out on his own, he candidly admitted that doing so would come at considerable risk. He didn't want to "eat ramen noodles every night" or put his family's financial security at risk. He made a conscious choice that he was going to forgo the potential payoff in exchange for a more predictable career path. His supervisor, who had the internal venturing group, said that whenever he gets into discussions about compensation, he reminds his internal innovators that "they are not incurring nearly as much risk as they would have were they do it on their own." What you get to do here is build an exciting career.

  • P33. The following list reflects the natural sequence of the most common barriers and their solutions. You'll see that I have given them names that form an acronym (IN-OVATE), which I hope will make them easy to remember.

  • Intent: Facing early obstacles, many would be internal innovators abandon their original intent.

  • Need: Most employees do not understand what kinds of innovations their organizations need. Fever than 55% managers can name even two of their company's top strategic priorities.

  • Options: Would-be internal innovators often grow frustrated because they become fixated too early on a few innovative ideas.

  • Value blockers: It is commonly accepted that innovative ideas are inconsistent with, and therefore disruptive to, a company's current business model.

  • Act: Established organizations tend to ask employees to prove an idea will work before giving them permission to take action.

  • Team: Corporations hamper internal innovation by the nature of their structure.

  • Environment: Getting support for new ideas is politically complicated because the leadership behavior, types of talent, organizational structures, and cultural norms that help established organizations sustain their core operations also tend to hinder internal innovativeness.

  • P35. Amelia Earhart said, "The most difficult thing is the decision to act, the rest is merely tenacity."

  • P37. Jeff Bezos says, "Invention requires a long-term willingness to be misunderstood."

  • 42. If you ever found yourself either missing an opportunity you should have recognized or holding back from taking action on an opportunity when you should have, you were probably stopped because your internal dialogue was having one of three conversations: it won't work, you can't do it, or it's not socially acceptable. Academics use slightly more formal descriptors:

  • Behavioral beliefs: whether you believe that the actions that would be required would result in a desirable outcome. You are asking yourself "Would this work?"

  • Control beliefs: whether you believe that you are capable of taking actions that would achieve the outcome—that you can accomplish the task, that you have elf-efficacy required. You are asking yourself "Am I capable.

  • Normative beliefs: How you believe other people will react if you take the actions necessary, and the degree to which that influences you. You are asking "What would my colleagues or friends say?

  • P45. She calls it the Sherlock Holmes Technique, because you become something like a "detective" of your thoughts. All you need is a notebook and a sense of playfulness.

  • Every time you have a thought about taking an innovative action, ask yourself, "What is it I believe about myself that caused me to think that?" Notice what comes up for you and write it down in your notebook.

  • Every time you feel bad, ask yourself, "What do I believe about myself that caused me to feel that?" Notice what comes up for you and make a note of this.

  • Each time you do either one, physically move yourself away from where you were sitting or standing and in this new position ask the question again (What is it I believe about myself that caused me to think that? or What do I believe about myself that caused me to feel that?). Ask in a playful way, as if you have caught the limiting belief by surprise.

  • At the end of your forty-eight hours, look at your list and ask yourself two questions about each item on it:

  • What has been the cost of having this belief?

  • What will be the cost of living in this belief for the next five years?

  • P49. Therein lies an important lesson for all of us: Spotting a market need is not enough. That need must also match a strategic need for the company. Otherwise your organization is not likely to support pursuing it. When you understand what your company needs and, more precisely, what the company recognizes it needs, you can focus your search for innovation more strategically. Like the drunk who looked for his keys in the parking lot ( where even he knew they could not possibly me) because that's where the light was, too often we look where it's easy to look rather than stopping to consider which hinting grounds would produce the kinds of ideas our organizations want.

  • P51. How did Sandberg spot the strategic potential in AdWords and AdSense? By making a big-picture survey of the landscape, which enabled her to see what others could not see, and then applying a clear-eyed, strategic analysis of possibilities. At McKinsey we called this adopting the "top-management perspective," which means that you step up and think like your CEO. You understand not only what it takes to succeed in your own role, but also why your job matters to your team, and why that matters to your group, and why that matter to your company, and why that matter to the world. Because you see the full picture, you can spot the best places to look for the ideas that your organization will embrace. This , research shows, reduces the risk of your idea being rejected.

  • P64. Pressure from investors flows down through board members to your leadership team and then down the line. Your CEO is likely fretting daily about what investors will ask. So think like a CEO. Seek to understand what your investors are demanding; this will help you make better-informed choices about which types of innovations to pursue.

  • P69. Create a Pyramid:

  • Mission/Vision

  • COO SI

  • CS SI

  • CTS SI

  • P75. An effective way to get your team to set an impossible goal is to work backward from the future.

  • The mess. Step out ten years into the future and imagine the "mess." At Disney: " As the popularity of the parks grows, the lines get longer and longer, guests grow frustrated.

  • Long-term trends. Still standing out ten years from now, think about the trends that will affect the future. AI, social demographics shifts, and regulations.

  • Long-term ideals. Envision your ideal outcome ten years from now. Both Jeff Bezos and Elon Musk have explicitly underscored this point as central to their thinking process.

  • Near-term ideal. Then ask, in 18-36 months, what must be true for us to know, without a doubt, that we are on the path to realizing our long-term ideal?

  • Strategic question. Finally, you convert your near-term ideal into a strategic question. Simply rephrase it as a question.

  • P77. To increase your chances of generating innovative options no one has thought of before, it helps to look where no one has looked before.

  • P78. To explore this concept of "Patterns," I looked through successful internal innovations of the past into sets.

  • Make a small-scale advance. Rather than attempting to dream up a large-scale innovation, identify a seemingly small pain point that customers or users experience.

  • Turn an internal capability into a business. Think AWS for Amazon, or Redbox for McDonalds.

  • Do good. Working to solve social problems is the source of inspiration for many internal innovations.

  • Find an unorthodox path. We often get used to delivering value in one way that we overlook opportunities to deliver it through different pathways.

  • Apply an abandoned innovation. Your organization has a junkyard filled with failed innovations. You can pick innovations out of the trash and apply them in new ways.

  • Coordinate the uncoordinated. The growth of models like Airbnb and Uber points to the notion that we can now coordinate things that before we needed to control. Before you needed a hotel to rent a room, or a taxi permit to drive people around.

  • Serve "super-users." We often focus on customer segments that represent the largest portion of our market. But on the periphery, you will find "super-users" who are trying to use your product or services in new ways, pushing the limits of your offering.

  • P80. Warren Buffet said "Circle your top five priorities. Everything you didn't circle just became your 'Avoid at all cost list.'"

  • P86. He found that if you are trying to launch an innovation that targets a market (a core customer, say) that is entirely new to your company, you can expect to fail 75-95 percent of the time. But if you're introducing an innovation to an existing customer segment, using a product or technology that is the same as your company's current offerings, you can reduce your failure rate to only 25-40 percent. His conclusion was that to drive sustained growth, companies need to pursue a portfolio of ideas across the spectrum.

  • P90. The Eight P's This model suggests you consider eight distinct but interrelated areas of your business.

  • Positioning: Who your core customer is and what position your brand holds.

  • Product: What you sell.

  • Pricing: How you price your products.

  • Placement: How you deliver your product.

  • Promotion: How you communicate to your core customers.

  • Process: the internal process that allows you to deliver on your value proposition.

  • Physical experience: the experience you create for your customers, including what they see, smell, hear, taste, and feel.

  • People: who you hire, how you organize them, and your culture.

  • P92. Successful internal innovators take the opposite approach. They begin with the unique positioning assets their company already has—the core customers are already loyal, value propositions are already being delivered, and brands are already known—and explore how they could combine or build on them. They look for the magical middle, where the position is both compelling to the market and one on which the organization is uniquely able to deliver.

  • P93. Think beyond the core product. It helps to think expansively about what your product/service is. You want to consider the often overlooked related service you offer as part of your core product. For example, a hotel does not just offer a bed for a night; it offers a portfolio of other elements that create a bundled experience—online registration, valet, porter service, check-in service, in-room Wi-Fi, room service, etc.

  • P94. Four steps to define a product/service that will disrupt:

  • Brainstorm your full set of products/services. Start out by brainstorming a full set of products/services that your customer wants or needs.

  • Create a prioritized list of attributes. Looking at the list of products/services, put together a prioritized list of the attributes that your core customer most cares about.

  • Identify business model issues. For each attribute on your list, ask yourself: Where might we run into issues? What could hurt or help us?

  • Decide what you might want to accept, bend, or change. Create three lists of attributes or elements of your product:

  • Which should I accept.

  • Which should I bend.

  • Which should I change

  • P102. Key questions:

  • Have you done the things needed to build the level of collaboration and support you need from your marketing department?

  • Have you developed friendships?

  • Are you engaging early?

  • Have you invited them to co-create with you?

  • Do you clearly understand the rules?

  • Have you created an informal marketing committee?

  • Have you anticipated, and are you addressing, the salesforce barriers you are likely to face?

  • Target customer?

  • Coverage and capacity?

  • Incentives?

  • Tools?

  • Culture?

  • P126. To begin taking action on your idea, follow six steps:

  • Describe potential solutions, making sure to pick more than one.

  • Design a test by identifying the key assumptions that your innovation idea depends on, deciding what metric you could use to test the validity of your assumption, and defining the "success target" that would indicate that the assumption is sound.

  • Build a storyboard, minimum viable proposition (MVP), or beta.

  • Observe and gather data by getting out of the office and putting your storyboard, MVP, or beta in front of your key stakeholders to see how they react.

  • Draw conclusions for each area that you are testing by looking at an synthesizing the data.

  • Decide whether to pivot (change direction) or evolve (continue on your current path).

  • P135. From this experience we have pinpointed seven critical steps to building an effective innovation team from within:

  • Remove organizational friction.

  • Assemble a cross-functional team.

  • Align around an important goal.

  • Use metrics and data to track the most important things(s).

  • Build a scoreboard everyone can see.

  • Establish a rapid rhythm.

  • Generate positive velocity.

  • P141. One particularly effective framework for building your team's commitment to a goal comes from Marc Benioff, the founder of Salesforce. Marc claims that the secret to the success of Salesforce—which grew past $1 billion in revenue in less than ten years—is a "secret management process" he developed called the V2MOM:

  • Vision: the outcome you want your initiative to achieve

  • Value: why achieving this vision matters

  • Metrics: what measures will indicate you have achieved your vision

  • Obstacles: the barriers you will need to overcome to get there

  • Measures: the actions you must take to get there

  • P169. Joi Ito said" The metaphor I often use—it's not the perfect one—is being a gardener. I want to make sure that the irrigation and fences are working, that the compost is alive, and that the plants are in roughly the right place, but I don't tell the plants how to grow. I watch how the garden's evolving. I may move things around, and I may prune here and there. But it's not under my control."

  • P189. To have an innovative space, leaders need to put talent, structure and culture in the forefront.

  • P195. Value blocker checklist.

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