The Little Black Book of Innovation, With a New Preface

How It Works, How to Do It

Scott D. Anthony

• Publisher: Harvard Business Review Press
• Year: 2017
• Print ISBN: 9781633693401
• eBook ISBN: 9781633693418
• Topic: Business
• Subtopic: Business Development
• Index: Business

In The Little Black Book of Innovation, long-time innovation expert Scott D. Anthony draws on stories from his research and field work with companies like Procter & Gamble to demystify innovation. Anthony presents a simple definition of innovation and illuminates its vital role in organizational success and personal growth. Anthony also provides a powerful 28-day program for mastering innovation's key steps: finding insight, generating ideas, building businesses, and strengthening capabilities.

With its wealth of illustrative case studies from around the globe, this engaging and potent playbook is a must-read for anyone seeking to turn themselves or their companies into true innovation powerhouses.

PART ONE

LAYING THE FOUNDATION

CHAPTER 1

THE INNOVATION IMPERATIVE

Innovation—something different that creates value—is both more important and more accessible than ever before.

Innovation. The very word exudes optimism. Innovation gives us new ways to communicate with friends and family. It helps us live happier, healthier lives. But what does the word mean, and how much does it really matter? This chapter provides a simple definition of innovation, describes different types of innovation, explains why innovation is the most pressing challenge of our time, and details why innovation is more accessible than many realize.

Innovation Defined

Over the past few years, I have written several books on innovation, totaling close to a quarter million words. I went back and looked, and in not one of those books do I actually define what innovation is. That’s a glaring oversight. After all, you can’t implore readers to be better at something without telling them what that something is.

For a word that is thrown around so much, innovation lacks a clear and consistent definition. In August 2010, a popular innovation blog posted an article listing twenty-five separate definitions.¹ The author was certainly trying to be helpful by producing the list. But how would twenty-five often contradictory definitions help anyone actually do anything with innovation?

The New Oxford American Dictionary describes innovate as “make changes in something established, especially by introducing new methods.” That’s not a bad starting point. But I go with something even shorter: “Something different that creates value.” Five words. That is the definition of innovation I will use for the rest of this book.

Hidden in that simple statement are a few nuances. For example, it is important to clarify “different” according to whom. Innovation is in the eye of the beholder. The innovation target—whether it be an end customer, a supervisor, a spouse, or a friend—should be the one who considers it different. And what does value mean? In my language, value means some kind of measurable result—whether it be profit, improved performance of a process, a measurable effect on someone’s life, or something else entirely.

Note a few things that are not in my definition. The word technology doesn’t appear; innovation comes in many flavors (I’ll discuss this more later). Note the absence of the word creative or the phrase never been done before. It is always important to separate creativity and invention from innovation. There is a popular conception that innovation is all about a creative idea. Creativity is a piece of the innovation puzzle, for sure. And creativity, of course, can help the innovation process. But innovation is a process that combines discovering an opportunity, blueprinting an idea to seize that opportunity, and implementing that idea to achieve results. Remember—no impact, no innovation.

One way to visualize the difference between innovation and creativity is to compare Leonardo da Vinci and Thomas Alva Edison.² Both men were geniuses. If you read through da Vinci’s notebooks, you can’t help but be blown away by his ability to see the future. He had sketches of devices that look a lot like modern helicopters. He mapped out the human body in remarkable detail. He was a creative genius. Did his ideas meet our definition of innovation? No, because those ideas didn’t create value in da Vinci’s time. And that’s important to remember, because when we set out to innovate, we should make sure we don’t fall into the trap of turning it into an academic exercise where we think, think, think, but never do. The doing is the thing.

Edison did. He is the consummate innovator. The stock ticker-tape symbol, phonograph, incandescent light bulb, and modern motion-picture industry all had their roots in Edison’s labs in New Jersey. They all were different. They all created value. And that, my friends, is an innovator.

Three Innovation Stories

Let me introduce my grandfather: Robert N. Anthony Sr. My grandfather was inducted into the Accounting Hall of Fame in 1986. Such a place exists! The Ohio State University created it in 1950. As of 2010, it had more than eighty members.³

The primary reason my grandfather (who passed away in 2006) resides in the Accounting Hall of Fame is because in his career he wrote close to thirty books on accounting. Most of them were academic and carried titles like Management Control in Non-Profit Organizations. I don’t recommend that book to normal people. My grandfather generally wrote for people seeking deep expertise—people who really wanted to develop mastery over a subject. People who would take a year or two out of their career to enroll in an MBA program and study with an expert like my grandfather.

My grandfather built a nice business model for himself. He taught at an MBA program. He received royalties on his books. And he received fees from companies that wanted to draw upon his expertise.

But in the early 1960s, he had an insight. He was only reaching a very narrow group of customers—the expertise seekers. There was an entirely different—and substantially larger—market he was ignoring. This was the person who wanted to be conversant in accounting. Such a person didn’t need to be an expert, but needed to know the meaning of the words on a financial statement.

My grandfather knew that having an impact on this audience would require something entirely different. In 1962, he introduced a book titled Essentials of Accounting. It differed sharply from his previous work. Instead of dense text to accompany expert instruction, Essentials was a do-it-yourself workbook. Readers could go through, fill in blanks, and learn by doing. By the end, they knew the difference between a debit and a credit. They knew common terms like accounts receivable. And they had a good sense of how to read basic financial statements.

The book, now in its tenth edition, has sold more than a million copies. That’s not Stieg Larsson, of course, but for an accounting book, that’s pretty darn impressive.⁴ My grandfather didn’t sit still, either. Always an eager adopter of new technologies, he introduced in the early 1980s a computer-based version of Essentials. One of the early beta testers was his then eight-year-old grandson (me).

My grandfather made accounting simple, accessible, and affordable. He reaped the benefits of innovation.

So too did Lizzie Jury. I learned about Jury when Innosight was doing work for Turner Broadcasting System, Inc., the cable broadcaster that owns CNN, TNT, TBS, Cartoon Network, and a range of other television channels.⁵ In the mid-2000s, Jury was a senior librarian working for CNN. Her job was generally reactive. As journalists were developing their stories, they would contact her looking to verify specific facts on news topics.

She wondered if there was a better approach. What if she could be more anticipatory? She began assembling preverified facts on important topics in the news. She put these “Fast Facts” on the company intranet, making them instantly accessible to journalists.

Think about how this relatively straightforward move from being reactive to being proactive would help Turner Broadcasting. The improved process allowed journalists to verify facts more quickly, leading to more efficient news production. This could allow CNN to get stories on the air faster—always a critical factor in an industry where the rule of thumb is “faster than anyone better, better than anyone faster.” The overall operational improvement would free up resources to pursue new opportunities, helping the company to create new growth.

Lizzie Jury made it easier for journalists to get the facts they needed. She reaped the benefits of innovation.

The third story turns back to my family and my older sister Michelle, who has a gift with children. She is the proud and doting mother of two girls and a boy, all of whom learned to sleep through the night at very young ages.⁶ Through the years, she has received many requests from other young parents looking to sleep-train their children or, later, to accelerate the pace with which their children learn to read. My sister could easily have just responded to each request individually. But she started collecting and collating individual e-mail conversations. Then when someone e-mailed a new request, not only did the parent get a specific answer, but he or she also received my sister’s “manual” for child rearing.⁷ In business jargon, my sister crowd-sourced a peer-to-peer manual to minimize the frustration of young parents.

My sister has helped hundreds of people more effectively raise their children. She—and her friends and family—reaped the benefits of innovation.

Types of Innovation

These three stories show how innovation comes in many guises. Just like the blogger who identified twenty-five ways to define innovation, there are dozens of ways to categorize innovation and hundreds of stories to tell. If you read the literature, you will see words like incremental, radical, sustaining, disruptive, competency-creating, and many, many more.

I find it helpful to look at innovation in one of two ways. The first is the innovation’s strategic intent. Consider Procter & Gamble, the consumer packaged goods company responsible for Pampers, Pantene, Tide, Fusion, Ariel, and dozens of other megabrands. The company follows four strategic intents in its efforts to grow revenue:

• Find better ways to market and promote existing products. For example, in the mid-2000s, P&G started running a series of commercials about its popular Swiffer line of quick-cleaning products. The commercials, internally called the breakup campaign, showed women “breaking up” with traditional cleaning methods (mops, brooms, and so on) to use Swiffer. The intent was to show consumers that Swiffer wasn’t just for quick cleans between “real” cleans, but a cleaning solution on its own. At the time only about 10 percent of consumers had ever tried Swiffer, and P&G hoped the advertisements would boost that rate. P&G calls this strategy commercial innovation.
• Incrementally improve existing products and services. You might think that one of the most challenging innovation jobs must be to discover new paths to growth for laundry detergent in North America. After all, the product is ubiquitous, and P&G’s flagship Tide brand has dominated the market for years. But during the 2000s, P&G increased sales of Tide significantly by introducing dozens of new varieties of the detergent. Some of the varieties featured new scents; others combined Tide with other popular P&G products like Downy fabric softener. P&G calls this sustaining innovation. In P&G’s language, these are the “-er” innovations (better, faster, cheaper).
• Introduce a breakthrough in performance in existing categories. In 2005, P&G purchased razor king Gillette for $57 billion.⁸ P&G was impressed by Gillette’s soon-to-be-launched Fusion razor and razor blade combination—the world’s first five-blade razor (technically, it has six: five on its face and a sixth on the top for trimming). By offering sharply better performance, Gillette increased its already substantial lead in the category.⁹ The Fusion became the fastest brand in P&G’s history to reach $1 billion in sales. P&G calls this kind of category step-change transformational innovation.
• Create a new category. In the late 1990s, P&G’s household care division launched two new brands—Swiffer and Febreze. Swiffer in essence created the quick-clean category—a range of simple devices with disposable elements that made cleaning quick and easy. Febreze allowed consumers to remove odors in hard-to-clean fabrics such as carpets or couches and created new ways to deodorize and refresh the air in rooms. As of this book’s writing, Swiffer’...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Preface to the Paperback Edition
• Preface to the Original Edition
• Introduction My Innovation Journey
• Part One Laying the Foundation
• Part Two The 28-Day Innovation Program
• Conclusion The Innovator’s Pledge
• Appendix
• Notes
• Index
• Acknowledgments
• About the Author