‘Think Different’ from the Schumpeter Column, Economist, August 6th 2011

As usual, Schumpeter’s column contains more insights than many articles twice as long. It is based around a new book about innovation by Clay Christensen, Harvard’s guru in this area - ‘The Innovator’s DNA - ’ following on from his earlier widely acclaimed work, ‘The Innovator’s Dilemma’.

Christensen’s approach is to look for characteristics that outstanding innovators tend to possess and he quotes these as associating, questioning, observing, experimenting and - perhaps the most surprising - networking. The article also advocates that those wishing to innovate must broaden their experiences and quotes a number of fascinating examples of ideas coming in the most unlikely places - for example when swimming with dolphins or tasting fruit in foreign countries.

The networking skill is not necessarily the ability to interact with people but to hang around in the right places, observing what’s going on and picking up ideas. Combined with this they have to be constantly questioning and challenging the status quo of their own businesses, experimenting with new developments picked up on their travels.

These ideas are transferred from a personal to company context by what Christensen and his co-authors call an ‘Innovation Premium’, calculated by comparing stock market value to the calculated value of current products (there is no detail on the calculation and I plan to follow up on this, maybe a future book review?). The conclusion of their research is that managers from companies with this premium tend to show the above five characteristics more than other companies and this is the reason for their success.

Christensen also expresses the view that these innovation skills can be learned but then qualifies this with evidence that it requires just one more thing - a touch of genius! The bad news for Apple shareholders in the light of Steve Jobs recent illness and resignation, is that their ‘Innovation Premium’ fell significantly when he left the company before, and has nearly doubled since he re-joined. The rather demotivating conclusion is that the innovator’s DNA is ‘impossible to clone’. Maybe I won’t read the book after all!

Click here to read the article in full:

http://www.economist.com/node/21525350