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Making Innovation Work: How to Manage It, Measure It, and Profit from It

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Making Innovation Work: How to Manage It, Measure It, and Profit from It


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Innovation must be managed, measured and incentivized to be profitable. This book shows how it's done.

  • The first total management framework to consistently and profitably execute on innovation: covers strategy, organizational design, incentives--everything needed to get the job done.
  • Three world-renowned experts deliver today's most sophisticated and battle-tested innovation knowledge.
  • Presents powerful metrics for measuring innovation, from idea creation through commercialization.


  • Copyright 2006
  • Edition: 1st
  • Book
  • ISBN-10: 0-13-149786-3
  • ISBN-13: 978-0-13-149786-3

Making Innovation Work presents a formal innovation process proven to work at HP, Microsoft and Toyota, to help ordinary managers drive top and bottom line growth from innovation. The authors have drawn on their unsurpassed innovation consulting experience -- as well as the most thorough review of innovation research ever performed. They'll show what works, what doesn't, and how to use management tools to dramatically increase the payoff from innovation investments. Learn how to define the right strategy effective innovation; how to structure an organization to innovate best; how to implement management systems to assess ongoing innovation; how to incentivize teams to deliver, and much more. This book offers the first authoritative guide to using metrics at every step of the innovation process -- from idea creation and selection through prototyping and commercialization.


Author's Site

Authors' Web Site -- Making Innovation Work Web Site

Sample Content

Online Sample Chapter

Driving Success: How You Innovate Determines What You Innovate

Downloadable Sample Chapter

Sample Chapter - 136 KB -- Chapter 1: Driving Success: How You Innovate Determines What You Innovate

Sample Pages

Download the sample pages (includes Chapter 1 and Index)

Table of Contents


1. Driving Success: How You Innovate Determines What You Innovate.

    Innovation Is the Power to Redefine the Industry.

    The Innovation Imperative: Driving Long-Term Growth in Top and Bottom Lines.

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

    The Rules of Innovation.

      1. Exert Strong Leadership on Innovation Direction and Decisions.

      2. Integrate Innovation into the Business Mentality.

      3. Match Innovation to Company Strategy.

      4. Manage the Natural Tension Between Creativity and Value Capture.

      5. Neutralize Organizational Antibodies.

      6. Cultivate an Innovation Network Beyond the Organization.

      7. Create the Right Metrics and Rewards for Innovation.

    Summary: The Innovation Company.

2. Mapping Innovation: What Is Innovation and How Do You Leverage It?

    A New Model of Strategic Innovation.

    Business Model Change.

      Value Proposition.

      Supply Chain.

      Target Customer.

    Technology Change.

      Product and Service Offerings.

      Process Technologies.

      Enabling Technologies.

    Three Types of Innovation.

      Incremental Innovation.

      Semi-Radical Innovation 

      Radical Innovation.

      Ersatz Radical Innovation.

      Disruptive Technologies.

    Innovation Model and the Innovation Rules.

3. Choosing Your Destiny: How to Design a Winning Innovation Strategy.

    Choosing the Right Strategy.

    Play-to-Win or Play-Not-to-Lose Strategies.

      Play-to-Win Strategy.

      Play-Not-to-Lose Strategy.

    Too Much of a Good Thing.

    Clearly Defined Innovation Strategy Drives Change.

    Do You Select an Innovation Strategy?

      Internal Factors.

      External Factors.

    Risk Management and Innovation Strategy.

    Innovation Strategy: The Case of the Pharmaceutical Industry.

      Attempts to Solve the Innovation Problem.

      Changing the Innovation Approach.

    Strategy and the Innovation Rules.

4. Organizing for Innovation: How to Structure a Company for Innovation.

    Organizing for Innovation.

    Developing an Internal Marketplace for Innovation.

    Balancing Creativity and Value Creation.

    The Balance Changes as the Organization Matures.

    Five Steps to Balancing Creative and Commercial Markets.

    Outsourcing Innovation.

      Making Good Use of Your Partners.

    Integrating Innovation Within the Organization.

      The Value of Networks and Innovation Platforms.

      The Corporate Venture Capital Model.

      The Ambidextrous Organization.

    The Leadership Role.

    Organization and the Innovation Rules.

5. Management Systems: Designing the Process of Innovation.

    Systems and Processes Make Things Happen.

    The Objectives of Well-Designed Innovation Systems.

    Choosing and Designing Innovation Systems.

      Systems for Ideation: Seeing the Gaps.

      Structured Idea Management.



      Making Deals.

      Innovation That Fits.

    Management Systems Comparison.

    Electronic Collaboration.

    Management Systems and the Innovation Rules.

6. Illuminating the Pathway: How to Measure Innovation.

    To Measure or Not to Measure?

      What Gets Measured Gets Done.

      The Three Roles of a Measurement System.

    A Balanced Scorecard for Measuring   Innovation.

      The Business Model for Innovation.

      Inputs, Processes, Outputs, and Outcomes.

      From the Business Model to the Measurement System.

    Designing and Implementing Innovation Measurement Systems.

      Measures for Ideation.

      Measuring Your Innovation Portfolio.

      Measuring Execution and Outcomes of Innovation.

      Measuring Sustainable Value Creation.

    The Barriers to Effective Performance Measurement.

    Measurement and the Innovation Rules.

7. Rewarding Innovation: How to Design Incentives to Support Innovation.

    The Importance of Incentives and Rewards.


      Different Strokes for Different Folks.

    A Framework for Incentive Systems’ Design.

    Setting Goals for Measuring Performance.

      Specific Versus Broad Goals.

      Quantitative Versus Qualitative Goals.

      Stretch Versus Expected Goals.

      Success-Driven Versus Loss-Avoidance Goals.

    Performance Evaluation and Incentive Contracts.

      Team Versus Individual Rewards.

      Subjective Versus Objective Evaluation.

      Relative Performance Versus Absolute Performance Evaluation.

    Incentive Contracts.

      Expected Level of Pay.

      The Shape of the Pay-Performance Relationship.

      Timing Incentives.

      Delivery of Compensation.

    Key Considerations in Designing Incentives Systems for Innovation.

      The Danger of Over Use.

      The Negative Effect on Intrinsic Motivation.

      Fear, Failure, and Fairness.

    Incentives and Rewards, and the Innovation Rules.

8. Learning Innovation: How Do Organizations Become Better at Innovating?

    The Importance of Learning.

    A Model of Learning.

      Learning to Act.

      Learning to Learn.

    Learning Systems for Innovation.

      Systems for Delivering Value.

      Systems for Refining the Current Model.

      Systems for Building Competencies.

      Systems for Crafting Strategy.

    How to Make Learning Work in Your Organization.

      Knowledge and Ignorance Management.

      The Project Roadmap.

      Failures as Part of the Process.

      Learning Histories.

    The Dynamic Nature of Innovation Strategy.

      The Technology Stage.

      The Performance Stage.

      The Market Segmentation Stage.

      The Efficiency Stage.

      The Complementarities Stage.

    Learning and the Innovation Rules.

9. Cultivating Innovation: How to Design a Winning Culture.

    How Culture Affects Innovation.

    Is Innovation the New Religion?

    The Danger of Success.

    Organizational Levers of an Innovative Culture.

      The Levers of an Innovative Culture.

      Legends and Heroes.

      The Physical Environment.

    Different Country Cultures Breed Different Innovation Cultures.

    People and Innovation.

      Recruiting to Build an Innovative Organization.

      Turn Your Recruitment Strategy Upside-Down!

    The Role of Senior Management.

      Leading Innovation.

      The Role of the CEO.

    Culture and the Innovation Rules.

10. Conclusion: Applying the Innovation Rules to Your Organization.

    Combining Creativity with Commercial Savvy.

    Smart Execution.

    The Role of Leadership.

      Leadership Must Define the Innovation Strategy and Link It to the Business Strategy.

      Innovation Must Be Aligned with the Company Business Strategy, Including Selection of the Innovation Strategy.

      Leadership Must Define Who Will Benefit from Improved Innovations.

    Diagnostics and Action.

      Stage-Gate Systems.

      The Venture Capital Model.

      The Technology Innovation Model.

      Time-Driven Systems.

    Organizing Initiatives.



    Generating Innovation Value.





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