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This chapter is from the book

How to Make Innovation Work: How You Innovate Determines What You Innovate

Right now, your company is perfectly designed to yield the innovation that it is currently producing. This is not a trick statement. Because every company has a unique combination of innovation strategy, organization, processes, culture, metrics and rewards, each company’s innovation products will be different. What Apple develops would not come out of Dell or IBM. Likewise, what Toyota produces may be copied by General Motors or Ford, but they could not come up with Toyota’s basic innovations (the specific type of lean manufacturing that swept the auto industry or the current hybrid automobile technologies). Each company creates its own type of innovation by adding its own special touches (for example, culture, specific knowledge, unique rewards)—although the basic ingredients for innovation are all the same. Less innovative firms are that way because they chose it—either consciously or by letting inertia decide for them. Changing the innovation results requires proactive management.

A fundamental tenet of innovation of which many appear to have lost sight is "How you innovate determines what you innovate." In other words, the results of innovation are not a lottery—it is not a matter of luck. Alternatively, innovation is not a commodity system that you plug into to get what you need—such as the electricity grid.

The elements of innovation—leadership, strategy, processes, resources, performance metrics, measurement, and incentive rewards—and how they are arranged—organizational structure and culture—have a huge effect on the quantity and quality of innovation that an organization achieves. The implication is that it is nonsensical to ask for more or better innovation without first looking at how the company innovates.

What, then, are the key drivers for innovation success? Why do some companies prosper while others languish with decreasing margins, few successful new products, and eroding market share?

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