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Making Innovation Work: How to Manage It, Measure It, and Profit from It by Davila, Epstein, Shelton is a great book. Last year I was working with a client that was trying to incorporate the best practices in this book in his organization.  It was an interesting experience, and I learned a lot from it. This is an excellent resource on how to make innovation become part of your organization and culture.

In the beginning of the book it describes the 7 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

It went through and discussed how to go about implementing and ensuring these rules exist and are followed in your organization. One of the valuable things I got from this book was the discussion on Innovation Strategy and the Innovation Matrix.  It identified 2 major Innovation strategies: Play to Win (PTW) or Play Not to Lose (PNTL). The difference between the two was the different types of innovation that would be targeted from Incremental to Radical. Breaking each new innovation into one of the 4 types that are mentioned in the book makes implementing the strategy much easier. The 4 types are: Incremental, Semi-Radical Business Model Driven, Semi-Radical Technology Driven, and Radical.

Each of the Innovation strategies needs to have a certain mix of each innovation type (portfolio mix). I created a series of dashboards that enabled us to see that mix for each product roadmap and verify that the desired strategy was being implemented. We used a modified Boston Matrix showing Market Share vs. Growth and Revenue for the products in the product portfolio. Based on position in matrix we were able to determine our desired innovation strategy (PTW or PNTL) and based on that we knew our desired innovation type portfolio mix. We implemented the Innovation Matrix that is defined in this book on potential features. Using 6 levers described in the book we were able to identify the innovation type of each potential solution. We also implemented a series of performance scorecards containing a lot of KPIs and metrics identified in this book.

I found the book to be an excellent source for anyone, especially in a management position, who’s trying to become more innovative and create a culture that promotes, measures, and controls innovation, instead of relying upon spontaneous Eurekas. From creating the culture and organization, innovation strategy,  the external innovation network, learning organization, and instilling the proper metrics and rewards, this is a must have reference book. I highly recommend it.

DerickWorkman PM Book Reviews, Product Management