June 15, 2006

Staff Picks: 10 Rules for Strategic Innovators reviewed by Paul Scott

By: 800-CEO-READ @ 7:26 PM – Filed under: Management & Workplace Culture

Review of Ten Rules for Strategic Innovators

by Vijay Govindarajan and Chris Trimble, Harvard Business School Press, December 2005

In 10 Rules for Strategic Innovators, Vijay Govindarajan and Chris Trimble discuss what a company needs to do to give strategic innovation the best chance for success. The authors define strategic innovation as the use of strategic experiments high-growth potential new businesses that test the viability of an unproven business model. One of the more recognizable examples of a strategic experiment includes GM and their business unit OnStar.
Overall, the book is very readable given the specialized information presented. The authors illustrate all of their points with practical examples from actual companies who have tried different strategic experiments. In my line of work, environmental consulting, I havent worked at a company that has tried strategic innovation in the manner described by the authors. In environmental consulting, the business model stays the same but the services offered change over time. However, this book was such a good read and I learned so much that I would recommend it to anyone who has even a passing interest in the topic of strategic innovation.
The book itself has a unique structure in that the ten rules arent presented until the last chapter. However, the rest of the book was structured based on the three challenges that confront a strategic experiment: forgetting the parent business organizational model (referred to as CoreCo in the book) and developing a unique organizational structure for the new business (referred to as NewCo in the book); borrowing from CoreCo to have an advantage in the marketplace over other startups in the same area; learning and adapting to the new market of which NewCo is a part. Each of these concepts was illustrated by at least one practical example. This structure worked well. Each challenge was presented and an example showing the solution or illustrating a failure to deal with the challenge was presented afterward. I liked this structure because it helped me remember the core ideas (forgetting, borrowing, and learning) and gave insight into each of the three challenges and possible solutions to them.
After reading the rest of the book, the ten rules were a bit of a let down and seemed contrived given the threefold structure of the rest of the book. This was especially true because each of the ten rules related back to one of the three challenges of strategic innovation outlined by the authors. As I said before, I would highly recommend this book to anyone interested in the topic of strategic innovation.
Reviewed by Paul Scott