www.josseybass.com

INNOVATION is not just a creative

approach or new

idea. Innovation is about success. If you are

only marginally better off than when you started,

you have not achieved innovation. To count as

successful innovation, your new ideas have to

generate measurable gains in the marketplace,

for both your customers and your organization’s

bottom line. How can leaders focus on develop-

ing those products and services that can achieve

genuine traction and growth?

Getting Innovation Right provides real-world

strategies for uncovering—and capitalizing

on—the infl ection points that drive potential. A

positive infl ection point is a decisive, favorable

shift in your organization’s relationship to the

market. When you identify an infl ection point,

it means that your fi rm is poised to supply a

unique solution to an unmet need. Expert inno-

vators are able to sense the potential of positive

infl ection points and drive activity to stimulate or

take advantage of them. When harnessed, they

propel you forward, growing your base, generat-

ing loyalty, and moving you up-market.

To help you uncover and take advantage of

these opportunities, Seth Kahan has distilled

seven key activities that produce results-driven

innovation. These activities make the difference

between leaders who are haphazardly shoot-

ing in the dark with good ideas and those who

consistently and systematically uncover

potential, capitalize on opportunity, and generate

traction that drives success in the marketplace.

By focusing your efforts around these strategies,

you will leverage best techniques and ultimately

secure a foothold in a lucrative new space. Most

importantly, you will move past the idea that

innovation is a culture or mindset, recalibrating

your defi nition so that it depends solely

on outcomes.

Based on Seth Kahan’s extensive consult-

ing work bringing new products and services

successfully to market across a wide range of

organizations, this tactical approach will help

any leader guide innovation efforts, from initial

information gathering to optimal execution.

Getting Innovation Right is a real-world practi-

tioner’s guide and an indispensable resource

for driving better results.

Praise for Getting Innovation Right “Everybody knows you have to innovate to be a success, but it’s easier said than done. Getting Innovation Right is a master class in mastering the current business landscape. Reading this book will give you real-world examples of innovation at work, along with tested templates for action, so you can take your creativity and drive and use them to create exciting products and services your customers will clamor for.”

—DANIEL H. PINK, author, Drive and A Whole New Mind

“In this dynamic and challenging global economy, those that succeed will be those who innovate. Seth Kahan’s new book outlines the step-by-step keys to suc-cessful innovation and a brighter future. Getting Innovation Right is a must-read roadmap to success.”

—STEVE NEIBERGALL, president, Safeway Eastern Division

“It is important to get some practical advice in a world fi lled with innovation theory. That’s exactly what Seth offers in Getting Innovation Right.”

—JOHN H. GRAHAM, IV, CAE,  president & CEO, American Society ofAssociation Executives

“Getting Innovation Right is one of the most compelling business books to come around in a long time. The tools and techniques Seth Kahan has outlined are clear, direct, and easy to apply to any business situation. His well-reasoned approach will allow all leaders to engage in key activities that will drive success in the mar-ketplace for their innovations.”

—MARY E. POWER, CAE, CMP; executive director, HR Certifi cation Institute

“Getting Innovation Right is, most of all, a pragmatic read. Imagine if you had a systematic approach to improving your thinking. This is it.”

—ALAN WEISS, PhD, author, Million Dollar Consulting and The Innovation Formula

Jacket design by Adrian MorganAuthor photo by Oxana Minchenko

$27.95 USA | $33.95 Canada

BUSINESS/MANAGEMENT

GettingInnovation RightGetting Innovation Right

SETH KAHANAUTHOR OF GETTING CHANGE RIGHT

Author of Getting Change Right

KA

HA

N

HOW LEADERS

LEVERAGE INFLECTION POINTS

TO DRIVE SUCCESS

( C O N T I N U E D O N B A C K F L A P )

( C O N T I N U E D F R O M F R O N T F L A P )

SETH KAHAN is an executive strategy consul-

tant and author. He works directly with CEOs on

change and innovation initiatives and teaches

over 25,000 professionals every year in confer-

ences and professional seminars. He has worked

with Royal Dutch Shell, World Bank, the Peace

Corps, and many other organizations. His fi rst

book, Getting Change Right, was a Washington

Post bestseller, and he writes regularly for

Fast Company’s website. He lives in Bethesda,

Maryland, with his wife, daughter, and son.

For more information, please visit

VisionaryLeadership.com, or

facebook.com/GettingInnovationRight.

INK OUTPUT CMYK + 2 PANTONE

Reading SampleBuy the Book!

Click Here to Buy The Book

Kahan ftoc.tex V1 - 12/26/2012 6:19pm Page vii

Contents

List of Figures and Tables ixIntroduction xi

1 Pursue and Leverage Inflection Points 1Expert Input: Cindy Hallberlin of Good360.org on Getting

Ahead of an Inflection Point 31

2 Build Innovation Capacity 37Expert Input: Jeanne Tisinger of the Central Intelligence

Agency on Building Capacity 44Expert Input: Paul Pluschkell of Spigit on Idea Management 59

3 Collect Intelligence 65Expert Input: Ken Garrison of Strategic and Competitive

Intelligence Professionals on Competitive Intelligence 86

4 Shift Perspective 93Expert Input: Roger Martin of the University of Toronto’s

Joseph L. Rotman School of Management on ThinkingDifferently 104

vii

Click Here to Buy The Book

Kahan ftoc.tex V1 - 12/26/2012 6:19pm Page viii

viii Contents

5 Exploit Disruption 109Expert Input: William D. Eggers of Deloitte’s Public

Leadership Institute on Disruption and Government 124

6 Generate Value 147Expert Input: Mark Katz of Arent Fox LLP on Generating

Value 158

7 Drive Innovation Uptake 183Expert Input: Mark Hurst of Creative Good on Getting

Close to Customers 201

Appendix A: Sample Business Intelligence Contract 219

Appendix B: High-Level Outline of a TypicalBusiness Plan 223

Appendix C: Simplified Business Plan Financial Model 225

Notes 227Acknowledgments 233About the Author 235Index 237

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xi

Introduction

Innovation is about success. It is not innovation if you come upwith something new and it cripples or kills you. If you pour in youreffort and are only marginally better off than when you started, you

have not achieved innovation.Innovation is the successful introduction of a market offering that

profits everybody involved, both you and your customers. Innovationhappens when a new product or service creates a return in the marketthat far exceeds the time and money it takes to develop and execute.When anewoffering is accepted and embraced, generating the resourcesthat make it possible to support and grow its place in the market—thatis innovation. That’s a positive inflection point. That is what you mustaim for.

I once worked on an initiative that was destined for greatness. Myteam at the World Bank was building a cutting edge internal networkand our timing could not have been better. We called it knowledgemanagement; it was a new term that highlighted the value of knowledge.It was our intention to bring knowledge management to life throughthe private internal communications network we were developing.

Our staff members around the world were clamoring for greaterconnectivity. We brought in the best of the best to design our intranet,

xi

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xii

xii Introduction

the face of our internal network. We had highly paid, well-recognized,and experienced experts applying their best efforts.

We recruited content providers from within our ranks througha careful winnowing process that ensured we had relevant topicswith excellent intellectual property. We enrolled technically savvyprofessionals to help us build a network that everyone would be able toput to good use. We had high hopes of forever changing the way ourorganization worked, uniting our people, and providing them with theknowledge they needed exactly when they needed it through themiracleof technology.

And yet it flopped. It failed in a big way.We built it and they did notcome. We had created a comprehensive taxonomy—it looked like theindex of the Encyclopedia Britannica.We hadmapped everymajor topicarea in the organization and all the corresponding nooks and crannies.The problem was they were mostly empty because the taxonomy was solarge and initial participation was small. As a result when people wentlooking for content they came up empty-handed most of the time. Thisturned them off and they stopped using the system.

Even though we had a very cool system—the geeks loved it—eventhough we had made major progress in creating the taxonomy thatwould eventually catalog the Bank’s internal knowledge, it was not aninnovation. It did not succeed with our customers. It did not generatethe value we needed to justify support and growth.

We had done a poor job of engaging our customers, the peoplewe built the system for. There were about 12,000 people inside ourorganization who we hoped would be active and engaged in the newsystem. We had less than a hundred who understood what we weredoing and only a fraction of themparticipating heavily.Our engagementtactics had beenweak at best. As a resultwewere unsuccessful at creatingsomething new that people used. Instead we had a well-developed,cutting-edge service that sat mostly dormant.

Meanwhile just down the hall in the same building where we wereworking, another, less dramatic effort was going on. A single man, SteveDenning, with no budget was cobbling together bits and pieces of other

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xiii

Introduction xiii

people’s efforts with some unique ideas of his own to create a differentway of doing business for the World Bank.

Steve was putting together what would become the Bank’s firstsuccessful knowledge management initiative. He was playing with afundamental innovation in the way our $20 billion a year organizationcarried out its core activities by leveraging knowledge as our primaryasset rather than relying onwhatwas in the vault. Thiswas a change froma traditional bank model that relied on the forecasting of investmentreturns to guide the process of loaning money. Instead of focusing onthe World Bank as loan processor, Steve was looking at the Bank as aglobal poverty alleviator. It was a radical, far-reaching idea. It was alsoin line with the organization’s true mission in a way that traditionalbanking was not.

Steve’s innovation was not high tech. It was social. Because it wasbuilt around the experience and expertise of people, it was realizedin communities of professionals we called Thematic Groups. When itbecame clear to me that the new intranet was going nowhere, I left thateffort and ended up down the hall on Steve’s team.

It was 1997 when we realized that Thematic Groups were keyto our success. This is where the action was: informal groups ofpeople working together, sharing what they know, and applying it tothe toughest problems they were facing. It was a major innovation fortheWorld Bank—these groups were practically nonexistent at the time.In fact, I would say the organization was toxic to them, putting themout of business wherever and whenever they began to form.

When we initially went looking for them we had a hard timefinding them because they were off the grid. We discovered them in thecafeteria or the bar across the street, but they were extremely rare inconference rooms. We had to invent new ways of working, create newjobs that didn’t exist before (like community builder and knowledgeanalyst), confront entrenched systems and business processes that wereantithetical to our goals, drive uptake (the absorption of new ways ofworking), help people get and demonstrate results, and convince hostile

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xiv

xiv Introduction

senior managers that the new ways of working were better than theexisting state of affairs. It wasn’t easy work.

Butwedid it and it paid off quickly. By the summerof 1998 therewereover one hundred Thematic Groups up and running across the planet.Their work was producing dramatic results in line with the Bank’smission of poverty alleviation. We were experiencing major success—the returns on our hard work was overwhelming. We had created apositive inflection point.

We collected the stories and used them to convey the ThematicGroups’ successes. It became clear that these communities were excep-tionally effective at pushing the Bank’s mission forward. Collectivelythey were a global force advancing our cause. From environmentalsustainability to nutrition and health care, from infrastructure develop-ment to disaster response, these Thematic Groups were getting resultson the ground.

By outside accounts the effort was a success also. Stories uponstories were being told about victories this new way of working wasmaking possible. For example, we had leaders in Central and SouthAmerica, Africa, and Asia working together to share and implementsuccessful innovations in urban renewal, serving the urban poor. Thiswas an area that had been extremely challenged in the past. Casestudies about successes like this were being spread far and wide byother organizations. We received international recognition and praise.A panel of outside experts studied our efforts in 1999 and concludedthat the Thematic Groups were ‘‘the heart and soul’’1 of our successfulknowledge management program. The success we experienced resultedin $60 million of annual allocation.

More important, our success persisted after we left.A study was conducted twelve years later. This was eight years

after the team I was on disbanded. It also happened after institutionalbudgets had swung back and forthmore than once, after the glow of ournovelty had worn off, after two presidents of our organization had comeand gone, and after knowledge management had swung out of favor,back in, and out again. After all this turmoil—the dramatic changing of

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xv

Introduction xv

the guards at the top of the organization, and the regular reallocation offunding to other activity—an assessment was done to learn what hadhappened to these groups. The study showed that ninety-six ThematicGroups remained and said ‘‘much good work is being done.’’2

This was my first big lesson in what it takes to get innovation right.It is not enough to bring in experts, strike at the ripe time, encouragecreativity and freewheeling experiments, hold a tolerance for mistakesand failures, play, and cultivate intuition and curiosity. To succeedyou must master the activities required to create the kind of productsand services that get traction and grow, bringing you significant andmeasurable success in your market.

Some will tell you innovation is about good ideas. In my experiencethere are plenty of great ideas floating around, untested, untried, andunimplemented. A great idea is simply not enough to get you throughthe obstacles that new notions, products, and services inevitably raise orconfront. The real trick is building something people are compelled touse or acquire, getting it into their hands in a form they can put to use,all the while moving ever more firmly into the black. I define innovationas the creation and successful delivery of new products and services.

I work with leaders all the time who have ideas they know willimprove their customers’ experience. But it seems they fall short whenit comes to important details. They don’t invest in the internal capacityrequired to successfully develop new products and services. They don’tdo market research to ensure circumstances are conducive to their newoffering. They don’t take advantage of disruption and use it to besteffect. They don’t think through the value from the customers’ point ofview. They don’t drive the required uptake to increase and acceleratemarket acceptance. These are all things I will show you how to do in thepages ahead.

The truth is that, as a result of misguided effort, intentions oftencome to naught, or worse, waste precious resources. That’s why I wrotethis book, to highlight the activities you must engage in to drive successin the marketplace for your innovations.

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xvi

xvi Introduction

Seven Key Activities for Getting Innovation Right

Inmy experience since 1998 working hand-in-hand with over a hundredleaders and their organizations, I have distilled seven key activitiesthat lead to successful innovation. Leaders who carry them out putthemselves ahead of their peers and the competition. The vast majorityof executives do not practice any one of these with discipline oremotional intensity. Yet it is these activities that make the differencebetween those who are haphazardly shooting in the dark with goodideas and those who consistently and systematically uncover potential,capitalize on opportunity, and generate traction that drives success inthe marketplace. By simply taking just one and putting it into practiceyou are putting the odds on your side. When you combine them,bringing them all to bear on your efforts, the result is an advantage thatstacks many variables in your favor.

The Seven Key Activities to Getting Innovation Right are

1. Pursue Inflection Points. A positive inflection point is a decisive,favorable shift in your relationship to the market. Expert innovatorsare able to sense the potential of a positive inflection point anddrive activity to stimulate or take advantage of these dramaticevents.When harnessed they are like waves that propel you forward,growing your base, increasing the offerings your customers buy,generating loyalty, and moving you up-market.

2. Build Innovation Capacity. The systematic development of newproducts and services generates inherent stress. Strong innovationleaders recognize this and intentionally build the capacity to containand channel these pressures. They do this by building the necessaryfoundation of internal leadership, talent, and idea management.

3. Collect Intelligence. The best innovation rises from a sea ofproducts, services, customers, competitors, market conditions, andinternal capabilities. To play to advantage youmust consistently col-lect and apply pertinent information, thus systematically enhancingthe quality of your strategic decisions.

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xvii

Introduction xvii

4. Shift Perspective. In order to see new opportunity you must beable to get out of your own box. There are proven techniques andtactics capable innovators use to question their own assumptions.This allows them to see the world through alternative and helpfulpoints of view. Learning to apply these techniques and tactics toyour business will help you find new areas for innovation.

5. Exploit Disruption. Disruption is part of business life today. Suc-cessful leaders know how to identify the opportunity embedded inadverse conditions and exploit it. They systematically and consis-tently turn turmoil to their advantage.

6. Generate Value. Value is what causes people to separate from theirhard-earned cash. It is what drives investors to invest, shoppers toshop, and people to fly around the world just to trade with eachother. Skillful innovators understandwhat drives value, what it lookslike to customers and all their stakeholders, and how to generate itby delivering something more, better, or new.

7. Drive Innovation Uptake. Every stage of the innovation processholds opportunity to introduce new ideas into the market andengage the community of people who will bemost interested in yourofferings. Uptake, or market acceptance, occurs through the well-tended generation of mutual value. Innovation leaders intentionallydrive uptake, seeking to control adoption for maximum effect.

In the chapters ahead I will explore each of these seven activities oneby one. Along the way I will provide tools and techniques you can putto use immediately. Follow the templates, guidelines, and step-by-stepinstructions and you will be best prepared to successfully innovate; thatis, drive success in your market. That is where the gold is, not in mywords but in your application.

Since 1997 I have worked with leaders in over sixty organizations,including Shell, World Bank, NASA, Prudential Retirement, ArentFox, American Geophysical Union, American College of Cardiology,National Apartment Association, Johns Hopkins University Applied

Click Here to Buy The Book

Kahan flast.tex V1 - 12/24/2012 10:32pm Page xviii

xviii Introduction

Physics Laboratory, Peace Corps, and the HR Certification Institute.The techniques I present are based on real-life experience with CEOs,executive directors, and senior managers of these world-class organiza-tions and others developing new products and services and deliveringsuccessfully to market.

My work is about getting results for my clients. I have written thisbook for them so they can learn from each other and for you so you cantake what is here and put it to good use. It is designed to provide youwith the explanations and devices you need to make the best possibleimpact.

I know that humanity occasionally rises to potential and achievesmiracles worthy of the human spirit. We can innovate and changethings for the better. Our collective efforts in that regard give me hope.For that reason I wrote what I think is a practical book, not one filledwith suppositions and hypotheses. Instead I want it to be full ofmethodsyou can put to work and stories that recount direct experience so youcan figure out how best to apply the material to your situation. Takewhat you can. Adapt it to your situation. Find satisfaction in the processand results.

Imagine what your tomorrow will be like when your ideas come tolife as sustained successes. Let me help you make that a reality.

Seth KahanWashington, DC

www.josseybass.com

INNOVATION is not just a creative

approach or new

idea. Innovation is about success. If you are

only marginally better off than when you started,

you have not achieved innovation. To count as

successful innovation, your new ideas have to

generate measurable gains in the marketplace,

for both your customers and your organization’s

bottom line. How can leaders focus on develop-

ing those products and services that can achieve

genuine traction and growth?

Getting Innovation Right provides real-world

strategies for uncovering—and capitalizing

on—the infl ection points that drive potential. A

positive infl ection point is a decisive, favorable

shift in your organization’s relationship to the

market. When you identify an infl ection point,

it means that your fi rm is poised to supply a

unique solution to an unmet need. Expert inno-

vators are able to sense the potential of positive

infl ection points and drive activity to stimulate or

take advantage of them. When harnessed, they

propel you forward, growing your base, generat-

ing loyalty, and moving you up-market.

To help you uncover and take advantage of

these opportunities, Seth Kahan has distilled

seven key activities that produce results-driven

innovation. These activities make the difference

between leaders who are haphazardly shoot-

ing in the dark with good ideas and those who

consistently and systematically uncover

potential, capitalize on opportunity, and generate

traction that drives success in the marketplace.

By focusing your efforts around these strategies,

you will leverage best techniques and ultimately

secure a foothold in a lucrative new space. Most

importantly, you will move past the idea that

innovation is a culture or mindset, recalibrating

your defi nition so that it depends solely

on outcomes.

Based on Seth Kahan’s extensive consult-

ing work bringing new products and services

successfully to market across a wide range of

organizations, this tactical approach will help

any leader guide innovation efforts, from initial

information gathering to optimal execution.

Getting Innovation Right is a real-world practi-

tioner’s guide and an indispensable resource

for driving better results.

Praise for Getting Innovation Right “Everybody knows you have to innovate to be a success, but it’s easier said than done. Getting Innovation Right is a master class in mastering the current business landscape. Reading this book will give you real-world examples of innovation at work, along with tested templates for action, so you can take your creativity and drive and use them to create exciting products and services your customers will clamor for.”

—DANIEL H. PINK, author, Drive and A Whole New Mind

“In this dynamic and challenging global economy, those that succeed will be those who innovate. Seth Kahan’s new book outlines the step-by-step keys to suc-cessful innovation and a brighter future. Getting Innovation Right is a must-read roadmap to success.”

—STEVE NEIBERGALL, president, Safeway Eastern Division

“It is important to get some practical advice in a world fi lled with innovation theory. That’s exactly what Seth offers in Getting Innovation Right.”

—JOHN H. GRAHAM, IV, CAE,  president & CEO, American Society ofAssociation Executives

“Getting Innovation Right is one of the most compelling business books to come around in a long time. The tools and techniques Seth Kahan has outlined are clear, direct, and easy to apply to any business situation. His well-reasoned approach will allow all leaders to engage in key activities that will drive success in the mar-ketplace for their innovations.”

—MARY E. POWER, CAE, CMP; executive director, HR Certifi cation Institute

“Getting Innovation Right is, most of all, a pragmatic read. Imagine if you had a systematic approach to improving your thinking. This is it.”

—ALAN WEISS, PhD, author, Million Dollar Consulting and The Innovation Formula

Jacket design by Adrian MorganAuthor photo by Oxana Minchenko

$27.95 USA | $33.95 Canada

BUSINESS/MANAGEMENT

GettingInnovation Right

Getting Innovation Right

SETH KAHANAUTHOR OF GETTING CHANGE RIGHT

Author of Getting Change Right

KA

HA

N

HOW LEADERS

LEVERAGE INFLECTION POINTS

TO DRIVE SUCCESS

( C O N T I N U E D O N B A C K F L A P )

( C O N T I N U E D F R O M F R O N T F L A P )

SETH KAHAN is an executive strategy consul-

tant and author. He works directly with CEOs on

change and innovation initiatives and teaches

over 25,000 professionals every year in confer-

ences and professional seminars. He has worked

with Royal Dutch Shell, World Bank, the Peace

Corps, and many other organizations. His fi rst

book, Getting Change Right, was a Washington

Post bestseller, and he writes regularly for

Fast Company’s website. He lives in Bethesda,

Maryland, with his wife, daughter, and son.

For more information, please visit

VisionaryLeadership.com, or

facebook.com/GettingInnovationRight.

INK OUTPUT CMYK + 2 PANTONE

ReadingSample–Buy theBook!