Thoughts on design, strategy, and innovation.

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Best Books on Strategy & Innovation: Part 2

This is the second of three parts post on the best books on strategy and innovation. Consider the list taken together as a “101” book set for those passionate about the topics, as a gift list for that special strategist in your life, or the perfect set to make good on that New Year’s resolution to “learn more about strategy and innovation”. Absolutely essential books are noted as *Must Read*.

If you haven’t read the first post on the “Classics of Strategy”, it’s worth giving it a quick review. This part, on Innovation & Business Models, focus on recent books written in our current era of “Continuous Innovation”, post-2000, and illustrate a marked shift in strategic thinking to opportunity identification and iterative development as well as the movement from traditional business “planning” to more organic “modeling”. I’ll be following up later this week with part 3, “Other Books of Note”, which is what it sounds like: a grab bag of other works I’ve found useful that any strategist worth their salt should consider reading.

Post #2: Innovation & Business Modeling
I’ve arranged these works in order of their original date of authorship.

*Must Read* Doblin 10 Types of Innovation by Larry Keeley1 and others at Doblin Group, 1995 (or earlier)
I’m starting off with one work which isn’t a book and which was first devised prior to 2000–two attributes which sort of break the rules I just set up. That said, this work is too important to ignore and just feels like it was created post-2000, even though it wasn’t. There are many typologies of innovation but none are as useful or as complete as Doblin’s model. While most people traditionally thought about innovation as updating products or services, the smart folks at Doblin recognized that innovation could come from anywhere in the value web. By pushing your teams to concept along the 10 Types, you’re sure to come up with better integrated solutions with a much higher hit rate. Doblin just updated their “10 Types of Innovation” and you would be well served to spend some time with them. It’s free!

*Must Read* Strategy Safari: A Guided Tour Through the Wilds of Strategic Management by Henry Mintzberg, Bruce Ahlstrand and Joseph Lampel, 2001
Strategy Safari walks readers through a range–one could say a “safari”–of types of strategy. As probably the most well known proponent of “Evolutionist” strategy, Mintzberg comes from a theoretical standpoint that claims we can’t fully understand a strategy until it’s in our rearview mirror, eg. behind us. Luckily, he and his co-authors have taken the time to look at thousands of companies with the purpose of identifying patterns of useful strategy. It’s a fascinating journey. By reading Porter, Mintzberg and Schwartz, you experience the three schools of Strategy with a capital “S”: rationalist, evolutionist and processual.

Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant by Chan Kim and Renée Mauborgne, 2004
Blue Ocean Strategy sort of took the world by storm with the simplicity of its message: compete in uncontested spaces rather than where competition is intense within an industry. Written by Kim and Mauborgne of the self-titled Blue Ocean Strategy Institute of Insead, reframed Southwest, Cirque du Soleil and Starbuck’s success into one of competing in “Blue”–wide open–rather than “Red”–highly competitive–oceans. It’s one of a few popular business books on this larger list that could be labeled a “one trick pony”. That said, each of the “tricks” from these ponies are worth knowing, including Blue Ocean.

*Must Read* Naked Innovation: Uncovering a Shared Practice for Creating Value by Zachary Jean Paradis and David McGaw, 2007
This book is about innovation—how to create value for people through new or improved services and products. Naked Innovation helps unveil some of the mysteries of the process—stripping it down to reveal structures that multidisciplinary teams can share. The book is organized around the innovation process itself and spans references from the Art of War to the Doblin 10 Types. It’s an attempt at integrating strategy and innovation like it has never been integrated before. Because it’s never been formally “published”, Dave and I sell it through Blurb at cost. Given I’ve written a book on this topic, I better deep it worth recommending.

Wired to Care: How Companies Prosper When They Create Widespread Empathy by Dev Patnaik with Peter Mortensen, 2009
As we’ve come to realize we what little success comes from sitting in isolated conference rooms coming up with “next big thing”, our focus on customers and people has become more pronounced. Unfortunately, the day-to-day reality is that we still spend too much of our time focused internally towards our organizations and not enough time looking outward connected to customers. This is where Wired to Care comes. Dev and Peter, both from Jump Associates, have written an inspiring work built around listening and empathizing with people and how this type of activity can be ingrained in an organization to drive success.

The Design of Business: Why Design Thinking is the Next Competitive Advantage by Roger Martin2, 2009
Roger Martin, Dean of the Rotman School of Business, is one of the world’s greatest thinkers on strategy and innovation. Trained as a classical strategist and someone who helped lead Monitor, the firm founded by Michael Porter (yes, that Porter), Martin spent his career helping companies develop successful strategies when he had an epiphany. He realized that for far too long, businesses were built around the exploitation of a single idea or situation, becoming increasingly efficient through reliable mathematical analysis and optimization. Martin’s epiphany was that running an organization not only required reliability-driven exploitation but also exploration by testing the validity of future businesses through more inductive means of understanding. Bridging this reliability-validity gap is the topic of the book and what Martin convincingly argues is required to be successful in our era of continuous innovation.

*Must Read* Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Pigneur, 2010
Osterwalder and Pigneur worked with hundreds of other brilliant designers, researchers, strategists and others to create Business Model Generation. The book works a lot like giant “concept construction work sheets”. Namely, the book is designed around a business model “Canvas” with the key components needed to iterate through the design of new businesses. It’s a great book and presents a simpler, more graphic approach to breaking the functional parts of a business down. If you’re considering starting a business, I could recommend no two better books than it and the final piece on this list, The Lean Startup.

Disrupt: Think the Unthinkable to Spark Transformation in Your Business by Luke Williams, 2010
Disrupt is a fun read. Luke Williams, former Chief Creative Officer and now Fellow of frog design, helped formalize the firm’s process, “frogThink”, and this book documents it. Disrupt romps through stories of design-led innovation and, similar to my book Naked Innovation, is organized around the process itself. One piece I found particularly valuable is the section where Williams discusses disruptive hypothesis generation. It’s a fun process and absolutely useful. Disrupt is probably the best design-led innovation book I’ve read to date.

*Must Read* The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries, 2011
Don’t know what a “minimum viable product” is? Considering founding a new company? There was everything Drucker wrote about entrepreneurship, a ton of other stuff, and then The Lean Startup. What Drucker outlined is just as important today as when he wrote it. The majority of the other writing on starting a new business between his and The Lean Startup is not very useful. The book is filled with tons of great examples and principles for start-ups. While primarily focused on creating new companies, the book’s many principles also have relevance to entrepreneurs as well. It’s the newest book on this list–just published in September, 2011–and I predict it will be seen as a classic in a decades time.

As I said in part 1 of this post, this list could have easily been edited down or expanded. A few books I’m looking forward to reading but haven’t include Innovation X: Why a Company's Toughest Problems Are Its Greatest Advantage by Adam Richdardson, Designing for Growth: A Design Thinking Toolkit for Managers by Jeanne Liedtka and Tim Ogilvie, and The Leader's Guide to Radical Management: Reinventing the Workplace for the 21st Century by Stephen Denning. Contact me via twitter to make other suggestions and I’ll include major oversights in an update to this post in a week or so. Expect part three late this week, which will outline “Other Books of Note” -- a grab bag of other works I’ve found useful that any strategist worth their salt should consider reading.

1 Disclaimer: Larry Keeley was a professor of mine at the IIT Institute of Design and his thinking continues to be a big impact on me.
2 Disclaimer: Roger Martin, Dean of the Rotman School of Business, wrote the foreword for Naked Innovation. That doesn’t make him any less smart. You should read his books.


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