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This chapter is from the book

Background and Overview

A considerable amount of background research informs the examples, conclusions, and recommendations in each chapter. Cumulatively, we examined in detail the record of more than 100 corporate venturing and corporate venture capital programs, more than 100 innovation-driven acquisitions and alliances, and more than 50 licensing deals and spinouts each. We explored a diverse range of examples, of organizations of different sizes and from varied industries, during the 5-year period from the end of 1998 through the end of 2003. Innovation enthusiasm began to bubble by the beginning of this time frame. In many different media, new innovation models were being proposed and then implemented; innovation exemplars were featured and then imitated. Myriad experiments were launched. The choice of a 5-year window was necessary to examine these cases with sufficient richness: to examine their internal and external dynamics and their initial performance, their evolution and ultimate outcomes. A longitudinal examination was necessary to get a better sense of what worked, what did not, and why—i.e., what deeper lessons might be learned.

Except where otherwise cited, our data primarily comes from first-hand sources: conversations and interviews with company founders, executives and former executives, investors and partners, internal company memos and documents, press releases, formal filings, and so on. During the research process, we also reviewed the available innovation literature to better highlight and explore prevailing theories and examples. Where secondary sources are used for more in-depth support or detail, they are cited accordingly.

Here's the typical pattern: A new "innovation in innovation" was announced with great fanfare and introduced with great hopes and expectations. Exemplar companies were recommended as models and used as templates. Sooner rather than later, however, the results of these innovation experiments tended to be far less than satisfactory, and much less exemplary. Even when many of these innovations did succeed in a narrow, short-term sense, they often did surprisingly little for their parent companies from a broader, long-term perspective. The innovation initiatives then tended to be quietly "back-burnered," shut down, or sold off. Retrenchment followed and the cycle soon began again. Meanwhile, the parent organization's core innovation typically suffered and overall performance deteriorated. It's a fundamental and important question: Why do so many supposed "best practices" in innovation so often disappoint? Why does innovation "best practice" so often not work out well in practice?

Some of the individual cases we discuss could fill an entire book. In fact, a few of the examples have been the focus of one or more books. Although such in-depth case studies have obvious benefits, their limitations are also notable. Readers might be left wondering: Is this particular case, however rich and in-depth, the exception or the rule? How and why (or not) does any of this apply to my company and my industry? Were the outcomes simply the result of good (or bad) luck, or is there something more here? In fact, much of the problem with innovation fads and fashions was exactly that—idiosyncratic, exceptional cases were used to extrapolate rules and recommendations for a wide variety of firms, big and small, in myriad industries and situations. They were not designed to engender critical thinking.

This intentionally is not our approach. In covering so much territory, it is impossible to thoroughly delve into each example. In each chapter, therefore, we try to focus on the most important details, the critical variables and their effects, and major conclusions and recommendations. Our intent is to engage in critical analysis that helps lay a better foundation for managers' own strategic thinking and bottom-line approaches toward innovation. For the sake of brevity and clarity, each chapter especially focuses on analyzing in greater detail some of the most celebrated exemplars of each innovation idea. More critically revisiting these examples invariably generates interesting and useful postscripts and more complex but constructive lessons to learn. In most cases, the exemplars themselves were already struggling with their own novel approaches toward innovation, even as many other companies were only just beginning to be advised to mimic them.

Each chapter ends with a summary of key lessons learned based on our broad overview of each innovation in innovation. In the concluding chapter, we tie together all these lessons to help advance a new model for innovation—one that is more nuanced and complex, but also better-grounded and more durable.

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