Book SummaryThe Master Guides: Business Innovation, by Shortform

1-Page Summary1-Page Book Summary of The Master Guides: Business Innovation

Innovative products and services can reshape markets and propel companies from obscurity to wild success. In pursuit of such success, organizations continuously release new innovations, recognizing that those who don't innovate risk falling behind, losing market share, and ultimately, becoming obsolete. However, most innovation projects fail: Many don't even make it to market and of those that do, the majority never generate the exponential growth and massive profits their developers were hoping for.

In Shortform’s Master Guide, we’ll synthesize the best answers to the question of why so many innovation projects fail from books by...

The Master Guides: Business Innovation Summary What Is Innovation?

Before we begin comparing perspectives on why innovation projects fail, we need to define what we mean by “innovation,” because not all authors define or use the term quite the same way. Most seem to agree, though, that to qualify as an innovation, a product or service must be noticeably different from other products and services that are currently available or have been available in the past, and the difference must make it noticeably better.

Continuous vs. Disruptive Innovations

Some authors distinguish between “continuous” or “sustaining” innovations and “discontinuous” or “disruptive” innovations. A sustaining innovation is an improvement to an existing product or service that doesn’t appreciably change how it’s used or who it appeals to. A disruptive innovation is a product or service that is either entirely...

The Master Guides: Business Innovation Summary Why Do Innovation Projects Fail?

Now that we’ve defined innovation, let’s return to the issue of why so many innovations fail. Many business consultants and other experts have written books to answer this question,...

The Master Guides: Business Innovation Summary 1. Insufficient Innovation

Some experts argue that the high failure rate of innovation projects is, in essence, largely an illusion, since most of these projects lack true innovation. Recall that to be truly innovative a new product must be both different and better. Not all product developments fit these parameters: A company might produce something that isn’t clearly differentiated from existing alternatives, or a product with differences that don’t offer meaningful advantages to customers. It stands to reason that these new products wouldn’t succeed in the market.

In this section we’ll examine how different authors address the problem of insufficient innovation, focusing mostly on evaluating whether potential ventures are innovative enough to succeed and the different types of innovation to consider.

The Ten Types of Innovation

In Ten Types of Innovation, Larry Keeley, cofounder of the Doblin Innovation Firm, and his Doblin colleagues Ryan Pikkel, Brian Quinn, and Helen Walters assert that all innovations can be classified into 10 standard categories. They observe that most successful disruptive innovations (that is, most of...

The Master Guides: Business Innovation Summary 2. Problematic Market Dynamics

Some experts have sought to explain why so many innovation projects fail by examining market mechanisms that work against innovators. Geoffrey Moore’s Crossing the Chasm and Clayton Christensen’s The Innovator’s Dilemma offer two such explanations.

Crossing the Chasm

Moore primarily addresses the challenges that would face a small startup company that has already made some kind of technological breakthrough and is looking to turn its breakthrough into a commercially viable product. He notes that this is hard to do because of the psychographics (the combination of psychology and demographics that determines customers’ purchasing behavior) of mainstream market customers.

Moore explains that as a new technology matures, different psychographic categories of customers adopt it at different stages of maturity and for different reasons. When you introduce an innovative technology, your first customers buy it either because they just love to try out new technology or...

The Master Guides: Business Innovation Summary 3. Inadequate or Inappropriate Project Management

Finally, some experts argue that the primary reason innovation projects fail is that they aren’t managed correctly. Innovation projects present unique challenges when it comes to project management. After all, innovation involves overturning conventions and doing things that have never been done before. How can you plan, schedule, budget, and manage tasks that don’t follow conventions or past precedents? In this section, we’ll discuss how different authors recommend managing innovation projects.

The Lean Startup

In The Lean Startup, Eric Ries points out that the biggest challenge in managing an innovation project (especially one that takes the form of a new startup company) is the uncertainty involved in doing something new. His strategy for overcoming this challenge is basically an adaptation of the scientific method, which he uses to gather data that eliminates uncertainties as efficiently as possible.

First, formulate a hypothesis. What do you believe about your product or your customers that’s vital to your business? Then, build the minimal product necessary to test your hypothesis. Observe the behavior of...

Shortform Exercise: Examine an Innovation Project for Viability

Statistically speaking, most innovation projects fail, and most experts attribute these failures to either insufficient innovation, problematic market dynamics, or inadequate project management. In this exercise, think through a project and evaluate it against these risks.

Think of an innovation project you’re currently working on, would like to work on, or would like to see succeed even if you're not directly involved. Briefly describe the project below.