PDF Summary:The Innovator’s DNA, by Jeff Dyer, Hal Gregersen, and Clayton Christensen

Innovative businesses change the world, but how do these companies develop their radical and creative ideas? In The Innovator’s DNA, Hal Gregersen, Jeff Dyer, and Clayton Christensen identify five key skills that are shared by the world's most innovative business leaders. The authors show how you can develop and strengthen these skills, whether you're a business owner, executive, or aspiring entrepreneur.

In this guide, we explore why innovation in business is so important, outline the set of behaviors and skills that you can adopt to unlock your inner innovator, and explain how to drive meaningful change by embedding these behaviors and skills into your organizations and teams. Along the way, we include additional insights from the authors’ other works. We also share ideas from other business experts, innovative thinkers, and cognitive psychologists so you can understand and adopt the innovation skills you need to boost your business and career success.

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• Imagination Questions: These questions allow you to perform thought experiments by imagining things differently. For instance, you might ask: What would happen if we did it this way or that way instead?

(Shortform note: The questions outlined above correlate to three question categories proposed by Matthew Dixon and Brent Adamson in The Challenger Sale to encourage innovative thinking in sales managers. Their question categories are: questions that increase your understanding (which relate to defining and origin questions), questions that widen your perspective (which align with limit-testing questions), and questions that expand your options (which correlate to imagination questions). They explain that asking questions in each category can help you fully explore opportunities for innovation and problem-solve effectively.)

Brainstorm questions. To strengthen your questioning skills and provoke deeper inquiries about the root causes or core elements of a problem, try brainstorming for questions (an activity the authors call QuestionStorming) by following these steps—this is an exercise you can do either alone or with your team:

1. Identify the problem.
2. Brainstorm questions about the problem. Come up with at least fifty questions. Don’t discuss solutions yet—only questions.
3. Write questions one at a time. If working with a team, write them where everyone can see them, like on a whiteboard (this helps to build on prior questions).
4. Prioritize and reflect on (or discuss with your team) the most important and exciting questions.
5. Attempt to answer the most important questions before moving on to brainstorming solutions.

(Shortform note: The authors suggest that brainstorming questions is superior to traditional brainstorming, which focuses on generating answers and solutions. Other business experts agree and explain why: In traditional group brainstorming, people may feel hesitant to speak up because of fear that their ideas will be rejected or ridiculed. But question-based brainstorming can change the group dynamic by creating a safe space for anyone to offer a different perspective. People often feel more comfortable speaking up with questions which helps expand collective exploration.)

Observing

Making careful observations is a crucial skill for connecting dots, asking questions, and prompting insights. By carefully observing current products, services, and business processes, innovators discover what works, what doesn’t, and where an innovative solution may be needed. Observing this way can spark new questions and allow you to think associatively as you discover the overlap between diverse data sets, unique situations, and differing industries.

Observe customers (your own or your competitors’) in different situations as they try to get something done, interact with technology, or use a service. By actively observing what works and doesn’t work for people, you may discover an unmet need, which could spark ideas for novel solutions. Keep an eye out for what the authors call workarounds—the often ingenious and unexpected methods people come up with to get things done using available products and services that lack in some fundamental functions. Identifying a workaround presents an opportunity for you to replace it with a new and innovative product or service.

(Shortform note: In The Design of Everyday Things, Don Norman agrees with Gregersen, Dyer, and Christensen that the most useful types of observations occur in the real world (rather than in controlled tests like focus groups). However, Norman uses a different term to describe this kind of observation: applied ethnography. Applied ethnography encourages careful observations of people using products and services in real-world scenarios for an extended time. Norman encourages applied ethnography as the first step in solving design issues. The workarounds discussed by the authors often represent issues in product and service design, which you’re more likely to spot with this approach to observation.)

Techniques for Building Observation Skills

Observe in new and unusual environments. We observe more closely and carefully in new environments, especially unfamiliar ones like foreign countries. Take time to explore, visit places you’re curious about, and take note of anything that stimulates questions and insights.

Observe with all of your senses. The authors assert that you gather more information by observing with all your senses. Doing this leads to more associative thinking and innovative insights. Take 10 minutes every day to observe something intensely with all your senses and take notes. Then ask yourself: Are any of my observations relevant to a new strategy, product, service, or production process? Capture your experiences in the journal and see if any ideas come to mind.

(Shortform note: Research suggests that being in new environments can make you a keen observer because new surroundings stimulate your senses in a way that familiar environments don’t. As you encounter unfamiliar sights, sounds, smells, tastes, and textures, your brain must work to process the novel information, leading to increased alertness and attention. In turn, heightened alertness enhances your ability to observe and make sense of your surroundings.)

Study other companies. Observe companies you admire—both competitors and companies with innovative business models or products—and find out everything you can about them. Try to understand their technology and processes and discover if their solutions can be applied to different contexts in innovative ways. Take note of their strategies, operations, and products, and look for ways to adapt them to your company's needs.

(Shortform note: The authors suggest observing your competitors, but they aren’t explicit about how to do this when competitors likely won’t let you into their offices. Two ideas for observing competitors are: 1) Attend industry events like conferences where your competitors may be present. Observe their booth displays, presentations, and interactions with attendees. 2) Monitor your competitor’s social media and review sites like Yelp. These platforms can provide valuable information on customer opinions and help you identify areas where you can improve your customer experience.)

Idea Networking

The authors introduce the concept of networking for ideas, which means interacting with people you have little in common with as a way to generate and test new ideas. Networking for ideas is how innovators widen their perspectives, form links between concepts, learn new things about the world, and gain feedback from experts and non-experts about their new ideas. The authors assert that mingling and talking with people from radically different backgrounds, industries, and life experiences increases your ability to think associatively and creatively by expanding your worldview and creating more opportunities for you to network for ideas.

(Shortform note: As you network for ideas, you may interact with business leaders from different cultures. To successfully communicate and collaborate with them, it’s wise to develop your multicultural awareness and competency, which Erin Meyer outlines in The Culture Map. To boost your cross-cultural communication skills, she recommends asking open-ended questions to gain clarity, summarizing what was said at the end of a conversation to ensure you’re on the same page, and paying attention to nonverbal cues.)

Techniques for Building Your Idea Network

Diversify your contacts. Take stock of the circles of people you most frequently find yourself and assess how diverse your list is. Do you have regular contact with people much older or younger than you? How about people from different parts of the world or different political leanings? If your list includes mostly people very similar to you, try to expand and diversify who you network with.

(Shortform note: People’s social circles tend to be composed of those similar to themselves in upbringing, culture, socioeconomic status, race, and gender—a social phenomenon that researchers call homophily. People tend to feel more comfortable with those with similar values, interests, and experiences, and it can seem easier to build trust and rapport with similar people. As you build your networking skills, keep in mind that homophily can be overcome when you understand the value of diversity and work to expand your network to include people from all backgrounds and life experiences.)

Follow your curiosity. Idea networking can happen organically if you regularly engage in an activity that sparks your interest and curiosity. The authors’ research showed that in about half the cases where innovators had new ideas, they stumbled upon them while pursuing their interests (outside of the business context) and connecting to people they didn’t normally rub elbows with.

Make plans to network. It’s essential to intentionally network to find and discuss new ideas with people. You can pinpoint good people to network with by learning who has experience with elements of your idea or the problem you wish to solve. Consider tapping outside experts, attending gatherings that freely exchange ideas from various fields, or even creating networking opportunities within your company.

How to Get Started With Networking (Especially if You Think You Don’t Need To)

Some business professionals may have difficulty committing to networking because they believe they can succeed without anyone else’s input or help. The following steps can help you put yourself out there and become an effective networker for ideas:

• Reframe networking. Many professionals who prefer working alone may view networking as unscrupulous, but this is a stereotype of networking. Reframe networking as a way to indulge your curiosity and discover and validate new ideas.

• Pinpoint who you respect and create a "wishlist" of people you'd like to connect with.

• Figure out your ideal networking environment. There are various ways to network, like by hosting networking dinners, inviting colleagues to coffee, or interviewing people for your blog or podcast. Form your networking plans around the environments and activities that you’re the most drawn to.

Experimenting

The final Innovation Skill is to experiment with potential solutions to business problems. Experimenting leads to innovative business ideas because when innovators take things apart and test their ideas with prototypes and pilot projects, they discover new possibilities for products and services. In essence, experimenting is searching for answers to your Defining Questions—it’s best for gathering data about ideas that might work in the future, while questioning, observing, and networking provide data about the present and the past.

The authors highlight Jeff Bezos, the founder of Amazon, as an innovator who uses experimentation to drive creativity and success. He embraces risk-taking and experimenting with new ideas, even if they initially seem unconventional or unlikely to succeed. The company itself was an experiment that Bezos conducted to test what products people would buy online. Amazon expanded exponentially by testing the limits of online retailer markets. Today, it continues to experiment with launching new products and services, such as Kindle, which are often met with initial skepticism but later became major contributors to the company's success.

(Shortform note: Bezos’s propensity for experimentation fits within the character profile of successful business leaders Collins and Hansen outline in Great By Choice. Their research shows leaders of successful companies are generally devoted to their long-term goals and take actions based on experimentation and observations. However, based on their research, Collin and Hansen argue that risk-taking (one of Bezos’ other primary characteristics) is not required for business leaders’ success—you can take careful and calculated action based on your experimentation and observations.)

Techniques for Experimenting With Business Ideas

Keep an open mind. Fearlessly entertain new ideas, hold off on drawing premature conclusions, and test hypotheses as you go. As you do so, it’s important to remain open to being proven wrong and to plan for failed experiments—you’ll gather invaluable information no matter the outcome.

(Shortform note: Keeping an open mind is crucial for everyone who experiments. In Think Like a Rocket Scientist, Ozan Varol explains that scientists, the ultimate experimenters, benefit from keeping open minds because then they can consider all possible outcomes and hypotheses, even those that may seem unlikely or counterintuitive. In this way, they avoid confirmation bias and remain objective as they interpret results, leading to discoveries, breakthroughs, and more accurate and reliable conclusions.)

Take things apart. Disassemble a product, map out processes, or deconstruct an idea. Taking things apart provides opportunities for new insights, ideas, and questions about how things might work better.

(Shortform note: The hands-on approach of taking things apart can be beneficial if you are a visual or kinesthetic learner. Visual learners benefit from seeing how things work by taking objects apart, allowing them to create mental images that help with understanding and retention. Kinesthetic learners benefit from the physical activity of taking objects apart, as using their hands reinforces their understanding and memory and helps them develop problem-solving and critical thinking skills.)

Experiment with ideas by building prototypes. Find something you would like to improve and ask yourself what it would look like if you changed it. Then, construct a prototype by hand, in digital design, or using 3D printing.

Test your ideas with pilot projects. Pilot new services and products by launching new ventures before they’re perfect. Don’t be afraid to fail—you don’t have to have it exactly right on the first try. In fact, the authors emphasize that successful products and companies rarely get it right the first time. Launch, learn from the market response, modify, and relaunch.

How To Make Prototypes and Test Your New Ideas

The authors don’t offer explicit details about building prototypes or launching pilot projects, but in Inspired, Marty Cagan elaborates on prototypes and different ways to test product ideas. Although he focuses on product development, you can also experiment with applying these ideas to new services and process ideas.

Cagan outlines four kinds of prototypes—feasibility, user experience, live-data, and hybrid—each appropriate for different testing stages and products. After developing prototypes, he recommends conducting tests, like launching pilot projects, as they can help you assess the four risks to product success: value, usability, feasibility, and business viability. You can perform several kinds of tests to assess each of these risks, including allowing users to interact with prototypes and give you feedback about their experiences with the product.

Develop Innovative Organizations and Teams

Now that we’ve looked at the skills you must develop to become an innovator, let’s see how you can apply those skills to build and sustain innovative organizations and teams.

The leaders and founders of innovative companies shouldn't expect their employees to innovate on their own but instead help them innovate by embedding innovation into every level of their organizations—through team structures, workflows, and company mindset. Developing innovative capabilities at each level of your business is important because innovation leads to growth opportunities.

(Shortform note: Some business experts agree that investing time and thoughtful effort into your organization’s teams is important and argue further that an organization’s collective skills, abilities, and expertise—the human elements behind the scenes—are even more important to long-term success than more publicly valued aspects of a business, like its innovation reputation or technology. Collective organizational skills and capabilities are more stable, unique, and harder to imitate than other business aspects (like access to the financial markets), which provides investors with confidence in future earnings.)

Team Structures

Optimize innovation in your organization by building and structuring your teams so that members have diverse perspectives and complementary Innovation Skills. To do this, you must hire the right people—look for potential hires with a track record of strong Innovation Skills and a passion for making big changes in the world. Prioritize candidates with expertise in different disciplines. Diverse perspectives from fields like sociology, psychology, engineering, and science foster associative thinking within an organization and contribute valuable insights into new products, services, and processes.

Once you have the right people, structure teams so that members’ Innovation Skills balance and complement each other. Find out who has strengths in which skills and make sure each Innovation Skill is represented in equal measure within a team. Paying attention to the balance of Innovation Skills in a team can make the difference between a consistently innovative team and one that struggles to think creatively and bring viable ideas to market.

Collective Capabilities Are Key to Organizational Success

Thoughtfully structuring your teams based on members’ diverse strengths and perspectives is an approach supported by the same business experts who advocate for investing in your organization’s collective abilities. In addition to innovation skills and creativity, they outline other collective capabilities that well-managed companies typically exhibit within their teams, including the following:

• Shared brand image: This ensures that team members have a cohesive understanding of who and what the organization is, which could help individuals feel collectively aligned with the company.

• Partnership: Encourage and facilitate different departments or teams working with one another to maximize efficiency and resources.

• Integration: Embed high-quality leadership throughout the organization to foster alignment and coherence among individuals within teams, between teams, and within the larger organization.

Workflows

To implement workflows that encourage innovation, you must first model innovative behaviors to your team by frequently and visibly making associations, questioning, observing, networking, and experimenting. Then, develop processes that require or at least make it easy for people to use their skills. The authors outline various ideas for ways to systematize the use of Innovation Skills in your company:

Institute the 5 Whys questioning system. Ask “why” about a problem or situation at least five times to get to the root cause. In other words, when you ask the initial question, ask why about the answer, then ask why about that answer, and so forth. This method, developed by a former Toyota engineer, is widely used by many successfully innovative companies.

(Shortform note: The 5 Whys technique was first developed by Sakichi Toyoda and used in the Toyota Motor Corporation's manufacturing methodologies. It is a critical part of problem-solving training in the Toyota Production System, and it's used to identify the root cause of problems.)

Develop formal and informal networking opportunities to facilitate knowledge-sharing inside and outside the organization. For example, the authors suggest you encourage employees to eat lunch together or create a company competition for the most innovative idea and fund the winner.

(Shortform note: With hybrid and remote work arrangements increasing for many companies, the opportunities for informal networking and knowledge sharing (like eating lunch together) are becoming less viable. One idea for virtual networking opportunities is to recreate the experience of an office setting by encouraging your teams to work alongside one another virtually. To do this, open video calls during work sessions so coworkers can ask questions and trade ideas easily in real time, as they would if they were working in person. As the authors recommend, idea sharing through company innovation competitions will translate well to virtual settings.)

Institutionalize experimentation through product testing, pilot projects, and “beta” product releases (which allow the public to try out new offerings and gather valuable feedback in the process).

(Shortform note: Feedback is valuable to you if the information is clear and insightful. To ensure you receive valuable feedback, some business experts recommend you consider gathering feedback from customers who have never used a product or service like the one you’re testing because they often will interact with the product or service in unanticipated ways. Additionally, you can collect feedback from clients by sending them a feedback form via email. Make the form easy for clients to fill out to help them provide comprehensive accounts of their experience.)

Company Mindset

Innovative leaders must infuse their organizations and teams with a commitment to innovation. Company mindsets are most effective when they’re shared among everyone and believed in. The authors outline three core tenets you can adopt to support your employees in having the courage and ability to innovate:

Prioritize funding for disruptive innovation. Allocate a portion of your human and financial resources to innovation projects. Spend more money on research and development and initiate more disruptive innovation projects rather than projects that merely improve on established markets.

(Shortform note: Christensen recommends that established companies budget for multiple attempts at marketing disruptive innovations and create a separate, independent unit within the company. Separate and semi-autonomous innovation units can explore disruptive innovation without being limited by the constraints of the current business model. With a separate budget, new initiatives do not have to compete with existing projects for resources.)

Promote the belief that innovation is everyone’s job. You can encourage everyone in your organization to be disruptive innovators by creating a work atmosphere that doesn't penalize people for experimenting and making mistakes. Acknowledge and praise people for using Innovation skills, actively solicit ideas from your team, and make it easy for them to spend time developing breakthrough ideas.

Embrace risk and expect mistakes. Innovative companies must be willing to take risks and make mistakes because disruptive innovation requires experimentation and, often, failure. The authors explain that you can take risks confidently by hiring the right people and developing innovation skills in your employees—putting the right people in front of problems reduces the chances of failure.

(Shortform note: Welcoming experimentation and encouraging people to take risks are examples of building what experts call psychological safety in the workplace. When employees fear penalization for making mistakes or failing, it’s biologically more difficult for them to think critically and creatively, problem-solve, and innovate. Additional ways to foster psychological safety in an organization include encouraging collaboration, building up employees' confidence with positive feedback, and requesting feedback from them for ways you can improve.)