The book: The Game-Changer: How
You Can Drive Revenue and Profit Growth With Innovation. Crown Business;
April 2008.
The big idea: Eureka moments are the stuff of entrepreneurial legend. But as A.G. Lafley and Ram Charan observe, you can't build a growth plan on them. Innovation -- the seed of organic growth -- is a matter of process and culture and business strategy. The real payoff comes from people getting comfortable together and sparking off one another; innovation is chiefly a product of social interaction. You've got to manage people before you can manage their ideas.
The backstory: Lafley is the chairman
and CEO of new-product dynamo Procter
& Gamble. Starting in 2000, he revived
the fortunes and morale at this aging
behemoth by systematically applying innovation techniques to product lines young and old. P&G now makes innovation the basis for budgets, compensation plans, and even risk management. Lafley's co-author, Charan, an adviser to corporate titans, adds stories from Honeywell, Nokia, and DuPont to the mix.
Intriguing subplot: Lafley starts sweating if more than 60 percent of new ideas
succeed, because it means he's playing
too safe. The Game-Changer even provides a chart of P&G's greatest flops. (Remember Fit Fruit & Vegetable Wash? Anyone?)
Does it scale? P&G is the Disney World of innovation, of course, with assorted in-house think tanks and labs. But Lafley describes
a few humble tools that any business can
afford, such as science-fair-style innovation
reviews. Teams gather in a room, outline their new-product ideas on simple posters, and present them to managers who walk from station to station.
Rigor rating: 9 (1=Who Moved My Cheese?; 10=Good to Great). Lafley
knows P&G and is generous with details of his career. Charan gets the skinny on other
corporations straight from their leaders.
If you read nothing else: "The Customer
Is Boss" (Chapter Three) sounds like a
yawner. In fact, it is a powerful argument
for research through immersion in customers' lives. Also worthwhile is "Integrating Innovation Into Your Routine" (Chapter Seven), which limns an innovation program as
though it were a manufacturing process,
from inputs to outputs and all the stages
in between.
