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A CSC White PaperEuropean Office of

Technology and Innovation

HOW COMPANIES DEVELOP OPERATING SYSTEMS FOR INNOVATION

What Innovation Is

The goal of innovation is to create business value by developing ideas frommind to market.And it is, for most companies, tremendously difficult toachieve. Innovation isn’t difficult because employees don’t have good ideas.The world is awash with creativity and technological breakthroughs.Rather, myriad obstacles in the idea-to-cash process limit a company’s abilityto innovate. Rigour and training are required to overcome these obstacles.Seen as the creator of new value, innovation isn’t hit-or-miss, trial-and-errorlateral thinking, but a repeatable process.

What is innovative about innovation today is the realisation that it can beachieved systematically, and that the innovator is an obsessive problem solver.

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Please contact the author of this paper,Howard Smith, at [email protected] holds the position of ChiefTechnology Officer, Computer SciencesCorporation, European Group. He is theauthor of two books about businessprocesses, Business Process Management:The Third Wave and IT Doesn’t Matter:Business Processes Do.

WHAT INNOVATION ISHOW COMPANIES DEVELOP OPERATING SYSTEMS FOR INNOVATION

The Innovation Imperative 1

A Systems Framework For Innovation 3

Caveat Emptor Amid Growing Innovation Chic 3

The Myth Of Disruptive Innovations 4

Innovation As Design Process 6

Beyond Design 8

Herding And Hearing Flocks Of Brains 9

An Age Of Time,Talent And Intangibles 11

A Short Cut Via Experimentation 15

And Suddenly The Inventor Appeared 16

The Message Of TRIZ: Innovation Can Be Codified 17

A Father For Invention 19

Creativity Can Be Taught 21

Mumbo Jumbo? 22

The Developing TRIZ 23

The Urgent Need To Expand Intellectual Property 24

Creativity Really May Grow On TRIZ 25

The Broadening Agenda To Renovate Innovation 26

Innovation Fuses Methodology Validated At The Customer Interface 27

The Innovator Is An Obsessive Problem Solver 29

Postscript: Innovation And The CIO Organisation 31

Appendix A: Innovation Resources 32

Appendix B:An Innovation Reading List 34

THE INNOVATION IMPERATIVEThere isn’t a business that doesn’t want to be morecreative in its thinking. According to one study, 75per cent of CEOs of the fastest growing companiesclaim their strongest competitive advantage is uniqueproducts and services and the distinct businessprocesses that power them to market – innovation byanother name. In another survey, Boston ConsultingGroup reported that 90 per cent of organisationsbelieve innovation is a strategic priority for 2004 andbeyond. The trend was also confirmed by researchundertaken by consulting firm Strategos. Their con-clusion: the importance of innovation in all sectors isgrowing, and growing significantly.

In today’s ever-changing economic landscape, inven-tiveness has become a key factor influencing strategicplanning. IT guru Kevin Kelly once said, “Wealthflows directly from innovation... not optimization...wealth is not gained by perfecting the known”.Efficiency, while a necessary condition for businesssuccess, is insufficient to sustain growth over decades.While new levels of efficiency and productivityrequire inventive solutions, the goal of efficiency isnot the same as the goal of innovation.

Chip Holt, inventor of the hugely successful XeroxDocuTech publishing systems, initially an obscureskunk-works effort almost killed at birth by the Xeroxcorporate immune system, is quoted as saying that “Icharacterise a lot of my efforts as the pursuit of pro-ductivity. I’m amazed at how many perspectives can bebrought to bear in the pursuit of that one word. In itssimplest form, productivity is the measure of the out-put divided by the input. The output management,which is associated with growing revenue, is an excitingone. But many times corporations get overly excited

about the ease by which investment can be reducedand therefore the productivity equation increased. Asan engineer and scientist, I come down squarely andstrongly on the side of making investments in innova-tion which increase the output part of the equation”.

If innovation and the balance sheet are inextricablylinked, companies cannot afford to rely upon flashesof brilliance by individual inventors working alone.Hoping that what is cooking in the lab will turn uptrumps is not a reasonable approach for a custodianof stockholder value. Very often, innovation resultsfrom the planned and deliberate recombination ofideas, people, and objects from the past that sparknew technological revolutions, sought after serviceconcepts and effective business models. Yet to stand asvaluable innovations, new products and services mustbe sufficiently robust to progress efficiently throughthe end-to-end commercialisation process and intothe hands of customers. How does this happen?

Leading companies continuously seek out and insti-tutionalise the insights and tools they will need ifthey are to stay at the leading edge and be top-ratedstars in their sector. Some companies build enduringcapacities for breakthrough innovation. They findways to circumvent the years, if not decades, it cantake to move from invention to commercial exploita-tion of a new technology. They manage theassociated risks and continuously enhance their abili-ty to solve the complex engineering and businessprocess design problems that would otherwise placelimits on their ability to envisage, and then createsustainable value from, the next generation in theirindustry. Far from a sporadic creative event, leadingorganisations, whether product or service centric,treat innovation as a systemic and systematic process.

WHAT INNOVATION IS | 1

Table 1:According to innovation theorists, a company should think about improving its operating system for innovation if any of the following apply:

You feel you are nearing the end of a long and expensive development race and your competitors are about to pass you by and win a valuable brand name and profitable chunks of the market before you are able to act.

The value in your industry is shifting from perfecting the old, toward inventing the new, in processes, products and services.

Even when you take on significant new contracts, vast amounts of new work or hundreds of new orders, your share price won’t budge.

It seems that the innovation efforts in your Organisation are not systematic enough and are based on chance flashes of genius or ad hoc ideas raised by individuals in skunk-works projects.

You sense that your R&D staff members are sated and have settled into complacency, and the flow of ideas is not what it was.

Your company has an excellent product that, ‘if we could only solve that problem,’ would conquer the world.

You are certain that reducing development time, production costs, and product price by 15 per cent would make your firm and your product a winner.

Despite all the consultants, ISO standards and best practices you deploy, the cancer of ‘it’ll be okay,’ and of undirected improvisation, has taken a grip on your firm, and this is something you are unwilling to accept.

2 | WHAT INNOVATION IS

Economist and management consultant PeterDrucker once said, “An established company which, inan age demanding innovation, is not capable of inno-vation, is doomed to decline and extinction”. Today,many companies are taking steps to strengthen theirability to innovate – innovating to renovate the inno-vation process itself. In short, such companies aredeveloping a reliable operating system for innovation,a key indicator of corporate sustainability.

A SYSTEMS FRAMEWORK FOR INNOVATIONIn his landmark book, The Fifth Discipline, PeterSenge taught us that the most successful organisationsare those that are learning organisations. Openingthat work he wrote, “From a very early age, we aretaught to break apart problems, to segment the world.This apparently makes complex tasks and subjectsmore manageable, but we pay a hidden price. We canno longer see the consequences of our actions; we loseour intrinsic sense of connection to a larger whole”.For Senge, the answer lay in systems thinking, theantidote to reductionism.

Systems thinking helps creative individuals to seewholes, perceive relationships, uncover connections,expose root causes and master complexity. Systemsthinking, Senge argued, integrates what might other-wise be separate management disciplines, preventingthem from becoming “gimmicks or the latestOrganisation change fads”. Some companies certainlytook on that message. Jack Welch, ex-CEO of most-admired company GE, once said that “Anorganisation’s ability to learn, and to translate thatlearning into action rapidly, is the ultimate competi-tive business advantage”.

Do you believe that innovation and creativity arelearning skills; that they can be developed and improvedif only one knew how? In short, does a systems think-ing framework for innovation exist? Edward de Bonothinks so. Inventor of methods to foster lateral think-ing and a prolific author of textbooks on creativity,his work has been taught in the boardrooms of someof the world’s largest corporations and to four-year-olds in school. There is nothing more wasteful than aroomful of intelligent and highly paid people waitingfor inspiration. ABB used to spend 30 days on theirmultinational project team discussions. Applying DeBono’s “Six Thinking Hats”, discussion now takes aslittle as two days. This experience is not unusual.

Using an applied creativity system developed byauthor and consultant, Min Basadur, snack foods pur-veyor Frito-Lay involved employees at every level incost-improvement teams and achieved its goal ofreducing costs by $500 million one year ahead ofschedule. Some at the firm claim a bigger bonus: apermanent shift to a creative problem solving culture.Retired president and CEO, Jim O’Neal, is quoted assaying that “Creativity methods provide senior management with a unique tool to tap into a massiveorganisational resource. Learning to leverage the creative thinking skills of every individual, regardlessof their level, creates the sustainable competitiveadvantage every corporation is striving for”.

Basadur, creator of the Simplex creativity processwho honed his methods at Procter & Gamble (P&G),often tells a story about a green-striped soap barcalled Irish Spring. Manufactured by Colgate and oneof the most successful new product introductions inhistory, the soap posed a problem for P&G. Afterdeveloping several unsuccessful copycat bars, P&Gfinally used creativity methods to shift focus fromcompeting on market share to competing on experi-ence. The result: P&G’s new soap bar, Coast. Usingblue swirls, not green stripes, Coast “out-refreshed”Colgate’s customers with a new advertising conceptthat linked its bar design not to Irish spring water, butto the illusion of an invigorating swim in the ocean.

Whatever we feel about such apocryphal marketingstories, psychological methods of enhancing creativi-ty, whilst effective, are unlikely by themselves to yieldinventive companies that dominate markets. Althoughmankind has tried to understand the human mind forcenturies, and questions about “how we get ideas” goback to antiquity, one can hardly imagine the CEO ofa major corporation reassuring stockholders aboutcompany strategy on the basis of facile instructionssuch as “Let your mind roam free”. When Peter Sengewrote about systems thinking, we can be sure he wasreferring to something beyond creativity tools andmarketing renovations. Companies need more thancreativity; they need a reliable innovation process, justas they have processes governing all other aspects oftheir business. Can innovation be codified? And if so,should companies make the effort? Help is at hand,but the buyer must beware.

CAVEAT EMPTOR AMID GROWING INNOVATION CHICTo those business leaders who are sitting on the inno-vation fence, Gary Hamel has a dire prediction: “Outthere in some garage is an entrepreneur who’s forginga bullet with your company’s name on it. You’ve gotone option now – to shoot first. You’ve got to out-innovate the innovators....Conventional thinking saysget back to basics. Conventional wisdom says to cutcosts. Conventional wisdom is doomed”. CaveatEmptor. Writing in 1976, George Downs andLawrence Mohr observed that “Innovation hasemerged over the last decade as possibly the mostfashionable of social science areas”. Are we set foranother round of innovation chic? Should we viewHamel’s pronouncements with caution?

Innovation has become a mantra: Innovate or Die.Innovate or Die. Writing in the Harvard BusinessReview, Hamel tells us that “A company can’t out-grow its competitors unless it can out-innovatethem... Innovation is the fuel for growth. When acompany runs out of innovation, it runs out ofgrowth”. Surely everyone knows that corporate growth– true growth, not just agglomeration – springs frominnovation and that it implies more freedom for theR&D lab? How then did Southwest, Cemex and ShellChemicals reap the benefits of innovation withoutspending lavishly on R&D?

According to marketing expert Sergio Zyman, manycompanies rely too heavily on expensive productinnovation to solve their problems. Whenever a brandor business gets old and tired, the impulse is to scrapit and start over with something fresh. It soundsgreat, but more often than not innovation simplydoesn’t work. Zyman, author of Renovate Before YouInnovate, knows this first hand – he was the chiefmarketing officer at Coca-Cola during the disastrouslaunch of New Coke. He reminds us that “many com-panies mistakenly focus on innovation to drivegrowth. They look to create new products and lines ofbusiness instead of the more promising alternative ofmarketing renovation. Renovation may be a better betbecause it involves doing a drastically better job ofleveraging your existing assets and competencies”.Convinced? Is marketing the answer to innovationdoldrums?

At Coca-Cola, renovation might have been a betterbet than risking the company’s heritage with a newdrink formula, but surely renovation is not limited tothe marketing process only? Isn’t there more to mar-keting soap than green stripes and blue swirls? Whatabout innovations in soap chemistry such as moistur-isation for an aging population, built-in deodorants,antibacterial agents and other ingredients that pro-mote an all-over healthy skin?

Companies that wish to move beyond marketing-ledrenovations quickly discover that there are as manydefinitions of innovation as there are innovation pun-dits. A superficial search of the Internet orAmazon.com reveals numerous sources of advice onhow to generate new ideas, recognise innovationopportunities, remove mental blocks to creativity, fos-ter creative conflict, create an innovation-friendlyculture and move innovations to market. Has innova-tion become the new knowledge management? As Thomas Davenport points out in his book What’sthe Big Idea?, “Knowledge management did haveproblems as a new business idea. One issue was thattoo many people – particularly IT vendors – conflatedthe use of knowledge technologies with the successfulmanagement of knowledge. Sometimes this was donein rather obvious ways. One of us, for example,remembers speaking at a KM conference in Florida.At the beginning of the conference, each attendee’sseat was graced with a new publication, KM World.How nice, we thought – KM now has its own littlenewspaper. On examination, however, we discoveredthat the paper was chock-full of press releases fromimaging and document management technology ven-dors, with only a thin veneer of KM articles on thefront page. Only the previous week it had been knownas Imaging World”. Is innovation suffering a similarfate? If we replaced the word ‘innovation’ with theword ‘knowledge’ in many popular books and articlesthat offer innovation advice, would it make any differ-ence? In ‘e-business’ we found it was the business thatmattered. What’s the real beef in innovation?



THE MYTH OF DISRUPTIVEINNOVATIONS A recurring meme of what some call the “innovationindustry”, is how business leaders get blindsided bydisruptive innovations because they focus too closelyon their most profitable customers and businesses.The idea became popular following the publication ofClayton Christensen’s influential 1997 book TheInnovator’s Dilemma. Since then, the work of theHarvard Business School professor and founder ofstrategy consulting firm Innosight, has spawned ahundred imitations. These beguiling ideas dominatepopular thinking about innovation. In the IT industrythey are interpreted as the search for so-called “KillerApps”, entirely unrealistic expectations for new, holygrail, software solutions. In IT or any other industrialsector, these ideas appeal to senior managers becausethey speak of the potential of specific innovations in amarket system, and they imply that silver bullets existto take markets by storm. Yet by reading these theo-ries we learn little about the process of innovation.Even when, as in Christensen’s 2003 book TheInnovator’s Solution, things are switched around toshow how companies get to the other side of theinnovation dilemma, creating disruptions ratherthan being destroyed by them, we find no solutionfor the innovator.

Sony releases 5,000 new products per year. A laptop’sexpected life is now only two years. Drug developmentis down from ten years to four years. Professional serv-ices firms are in a race to find ways to retain valuablecustomer accounts. There has never been a time whenmore products and services were being launched orwhen new technologies were being introduced to themarket ever more rapidly. To cope in this environment,companies need more than big ideas about disruptivemarket innovations – they need new stuff, the stuffwith which they can disrupt markets.

To win the next battle in the unending market wars,companies must be able to spot important trends anddeliver compliant products, in soap products or any-thing else. Only by solving problems inherent in thecurrent generation of a product or service, does inno-vation progress. Companies achieve this through the

talent of their employees and the work environmentsprovided for them by their employers. Creativity,inventiveness and the thoughtful application of sys-tematic, scientific, and predictable methods allow theinnovator to move beyond the current state of the art.

When Christensen and like-minded managementconsultants write about “innovators” they are reallyreferring to the mega-corporations that seek to dom-inate markets. The individual inventor, scientist,engineer or problem-solver is never discussed. Theirday-to-day, month-to-month and year-on-yearefforts to solve the hard problems in engineering,organisational design, service concept or process arenever acknowledged. Yet it is precisely these activitiesthat lead to new or improved products, services,processes and business models.

Management books about innovation are importantin so far as they help business leaders determine if anidea has disruptive “market” potential – which com-petitive situations favour incumbents, which favournew entrants and which customer segments are readyprimed to embrace new offerings – but they won’thelp us to be more creative or to solve the problemsthat innovators will inevitably face as new conceptsare commercialised with the objective of bringing innew business. Management books start where inno-vation leaves off. They assume innovation has alreadytaken place, and that all problems limiting commer-cial success, across the value chain and in all businessprocesses, will be solved in the future. Drawn as theyare from management theory, as opposed to engi-neering science, the ideas in such books have noimpact on the number of innovations companies areable to generate or commercialise. Neither will read-ing such works enhance the creative and problemsolving skills of employees. Management frameworkshave value in screening out bad ideas before toomuch time and resource is invested in the wrongplace, but they do not describe the sources of innova-tion, despite the catchy book titles. Whetherdeveloping a mass-market product or delivering inti-mate services one customer at a time, managementframeworks won’t turn dullards into innovators.

In Christensen’s latest book, Seeing What’s Next –Using The Theories Of Innovation To PredictIndustry Change, he provides a powerful synthesis ofthe many management frameworks he has writtenabout over the years, including disruptive innovationtheory, resources, processes and values (RPV) theory,jobs-to-be-done theory, value chain theory, schools ofexperience theory, emergent strategy theory andmotivational/ability frameworks. Yet the truth is,many of the disruptions he is concerned with do notoccur, or are the results of normal business logic.Southwest grew in the airline business becauseemployees were not unionised. The company boughtup cheap slots at airports when the established playerswere cutting back. It similarly bought cheap aircraftfrom Boeing when the major players could not affordthem. Then Southwest had to develop an online ortelesales presence because the airlines owned thebooking systems. Often, it is brutal business logic, notmethodology, which drives innovation. The innovatoris a problem solver and uses intelligence and instinctto knock down barriers one by one that, unless over-come, would prevent the growth of the business.Yet problem solvers, and the methods they use, nevereven get a mention in the index to Christensen’swork. Companies must look deeper to find the sourceof innovation and of competitive advantage.

At the MIT Emerging Technology Symposium 2003,GE CEO, Jeff Immelt, set out his beliefs about inno-vation, stating that “We are all just a moment ofcomplacency away from an abyss called commodityhell, where you compete only on price, where sharegoes to the least common denominator, and whereyou’re working for your customers instead of yourinvestors and you cannot build a business for thefuture”. Immelt identified four factors driving com-panies to “commodity damnation”.

First, lower growth and higher risk. There’s moreexcess capacity today than at any time since the 1970s.There’s more volatility in geopolitical risk than at anytime in the last 20 years. “The toughest thing that anycompany has to get today is an order”, he said.

Second, we’re facing the strongest competitors thatwe’ve faced in our lifetime in China, India and otheremerging economies. Thomas Friedman, writing inthe New York Times in an article entitled “Oops. ITold the Truth”, points out that “The Chinese and theIndians are not racing us to the bottom. They are rac-ing us to the top. Young Indian and Chineseentrepreneurs are not content just to build ourdesigns. They aspire to design the next wave of inno-vations and dominate those markets. Good jobs arebeing outsourced to them not simply because they’llwork for less, but because they are better educated inthe math and science skills required for 21st-centurywork”. Have no doubt; these societies have a strongtechnical foundation, and both human and materialresources. Immelt told the MIT audience that “Thetrick is not low cost labour; it’s the fact that we canhire two to three PhDs in India for the same amountwe pay one hourly worker in Louisville, and we haveto compete in that world”.

Third is the Internet. Re-stating GE’s oft-reportedbelief in “digitisation”, Immelt stated that “TheInternet has had a profound impact on how theworld works. It’s primarily profound in terms of theworld of perfect information. GE every year does fif-teen billion dollars of purchasing online via auction,saving 20 per cent to 30 per cent. The ability to getvalue for your product is fleeting and the tendency isto go to the lowest price everywhere in the world”.

Lastly, the dominant business models today are dis-tribution oriented, consolidating channels.Companies like Wal-Mart and Dell tend to dominatethe industries they’re in. They take value from themanufacturers and more value has gone to distribu-tion. Immelt’s conclusion? With utter certainty hetold the assembled business leaders that “The onlysource of profit, the only reason to invest in compa-nies in the future is their ability to innovate and theirability to differentiate”. If innovation is so important,what is innovative about innovation today?


INNOVATION AS DESIGNPROCESSTom Kelley, general manager leading design consultancyIDEO, describes how innovative teams immerse them-selves in every possible aspect of a proposal for a newproduct or service. For IDEO, research from the perspec-tive of clients, consumers and other critical audiences iscentral to innovation. IDEO has institutionalised a processfor innovation – from creating hot teams, pioneeringways to see through the customer’s eyes, unique brain-storming methods and rapid prototyping.

For cool and fast IDEO, whose mottos include “oneconversation at a time”, “stay focused on the topic”,“encourage wild ideas”, “defer judgment”, and “buildon the ideas of others”, the innovation process is ablend of methodology, work practice, culture andinfrastructure. Shadowing, behavioural mapping, con-sumer journey, extreme interviews, storytelling, deepdives and body storming are a few of the terms IDEOpersonnel use to describe what they do. Sam Hall, vicepresident for mMode at AT&T Wireless Services Inc.,turned to IDEO to redesign its mMode service. He wasquoted in Business Week as being “Thrilled with theresults. We talked to Frog Design, Razorfish, and otherdesign firms, and they thought this was a Web projectthat needed flashy graphics. IDEO knew it was aboutmaking the cell phone experience better”.

In the roaring ‘90s, IDEO’s niche was designing user-friendly computers, PDAs like the Palm V. IDEO alsodesigned the first no-squeeze, stand-up toothpaste tubefor Procter & Gamble. Now IDEO personnel are trans-ferring their ability to create consumer products intodesigning consumer experiences in services, fromshopping and banking, to healthcare and wireless com-munication. Is IDEO’s eclectic mix of out-of-the-boxthinking, structured exploration of design alternativesand creative flair enough? Not for IDEO.

Domain experience is an essential component ofinnovation. The members of IDEO’s creative team arefar from generalists – they are scientists, engineers,artists and management theorists. Although IDEO isquick to point out they are not experts in any onefield and that their core expertise lies in the process ofdesign, the majority of their employees have advanceddegrees in many different kinds of engineering:mechanical, electrical, biomedical, software, aero-space, and manufacturing. This background andformal training covers materials science, computer-aided design, robotics, computer science, moviespecial effects, moulding, industrial interaction,graphics, fashion, the automobile business, finance,

communications, linguistics, sociology, ergonomics,cognitive psychology, arts, therapy, ethnology, man-agement consulting, statistics, medicine and zoology.As a result of these qualifications and experience, theIDEO project portfolio reads like a design encyclope-dia. Closer examination of individual projects revealsthe power of cross-fertilisation from diverse domains.

IDEO’s clients have carried them far beyond the tra-ditional high-tech product categories that might havedefined the firm a decade ago when their reputationwas established by association with early successes forApple and Palm. Today, IDEO projects include aninsulin delivery device, eyewear that exploits thedesign potential of new materials such as cellulosicplastics, the architectural design of a public learninglaboratory, a new type of cap for recreational drinkbottles, hospital environments and associated process-es, office furniture, luminescent bathroom tiles,aircraft interiors, the passenger train experience, novelexhibition concepts, a radio data system and a com-municator for soul-mates. A quick skim throughIDEO – Masters of Innovation, a coffee table bookthat describes the story and features many gorgeousimages of their design work, and it is easy to forgetthat IDEO is not just a frothy concept companywhose work rarely gets further than a 3D digitalmock-up or Photoshop image. Far from it: IDEO staffconstruct real prototypes of the products they designand IDEO’s engineers design for manufacturability.

Manufacturing specialists are on IDEO’s projectteams from the earliest phases. Material specialists areemployed for all types of products, whether low-vol-ume or mass-produced consumer devices. IDEO’sexperience extends to hardcore topics such as: leanmanufacturing; supply-chain; purchasing strategy;electrical, mechanical and assembly DFM; yield pro-duction; factory assessment; injection, transfer,multi-shot and many other kinds of moulding, as wellas processes for cast, net-shape, finishing, printed-cir-cuit design and production and packaging.

At IDEO, as in the R&D labs of major corporations,innovation is predicated on current experience and adeep understanding of what worked in the past. Andto speed up learning, the design firm often turns to“real” experts, often end users, via an observationmethodology they dub “design anthropology” andwhich draws from ethnographic methods.Psychologist Jane Fulton Suri, who leads IDEO’shuman factors projects, has been called a “bird watch-er with attitude”, except the birds she specialises in arehumans. Nearly all IDEO projects now include an ele-ment of “bird watching”.


In an exotic setting one might learn how to build acanoe, weave a hammock, make rain, or deliver ababy. In the industrial workplace one gets insightsinto the intricacies of returning customers’ phonecalls, adjusting a piece of machinery, smelling a vat ofchemicals, or negotiating with co-workers about auseful strategy. IDEO anthropologists observe con-sumers and workers as they use, make or repair theproducts, services or spaces that the firm are broughtin to improve. A Ford engineer once noted that“When people look at a car in the showroom, the firstthing they do is open and close the doors. They maynot realise it, but if they don’t like the sound, they’lljust walk away from the car”. Knowing this, Ford andits competitors now engineer the sounds a car makes,including doors, latches, and of course engines.Design anthropology is what turns up this type ofknowledge. And IDEO is smart about the way it cap-tures design expertise from one project to providecreative design-seeds for others.

One of IDEO’s most useful creativity tools is the TechBox, a combination library, database, Web site, andorganisational memory of parts, mechanisms, andmaterials. As IDEO’s innovators discover new tech-nologies in one industry, the Tech Box allows theirknowledge to be distributed throughout the companyso that it can be applied on projects in other indus-tries. The Tech Box really is in daily use. It’s acreativity amplifier for IDEO and customers. AndIDEO has created specialised Tech Boxes for their

clients as they become aware of the central role ofknowledge management in innovation.

For many corporations the experience of workingwith IDEO is a wake-up call. The usual pattern is this:IDEO’s staff are engaged on a specific project, seniormanagers hear of the results on the grapevine and alarger problem is revealed – culture. Interviewed forABC News Nightline as part of a programme inwhich the firm was challenged to design and manu-facture a more innovative shopping trolley in just fivedays, David Kelley, IDEO founder and creative engi-neer, observed that “If you go into a culture and thereare a bunch of steps going around, I guarantee theyare not likely to invent anything”.

Is IDEO inventing? Sometimes. Whoever came up withthe idea for dental floss is an inventor, but the personwho created the little plastic box that lets you tear offjust the right amount is a designer. It’s not so easy tounderstand the boundary between invention and designinnovation, yet a specialist at the Patent Office can, withdue diligence, determine what is genuinely new in aproduct or process and what is just new spin. Lookingacross the IDEO portfolio, it is clear that the value theybring is far more than spin and marketing renovations,irrespective of whether or not individual projects createpatents. What IDEO do is a significant step up on theinnovation ladder, and far more than a room full of cre-ative generalists with no domain knowledge.


Table 2: IDEO Method Cards inspire great design

Method cards are one tool IDEO use to help explore new approaches in design.They are used to take a new view, enhance creativ-ity, communicate among a team, avoid a roadblock or turn a corner. IDEO have hundreds of techniques they employ during theirtotal immersion “Deep Dives”. Here are four:

CARD SORTHOW: On separate cards, name possible features, functions, or design attributes.Ask people to organise the cards spatially, in waysthat make sense to them.WHY:This helps to expose people’s mental models of a device or system.Their Organisation revealsexpectations and priorities about the intended functions. EXAMPLE: In a project to design a new digital phone service, a card-sort-ing exercise enabled potential users to influence the final menu structure and naming.

SCENARIOSHOW: Illustrate a character-rich story line describing the context of use for a product or service.WHY:This process helps to com-municate and test the essence of a design idea within its probable context of use. It is essentially useful for evaluation of serviceconcepts. EXAMPLE: Designing a website, the IDEO team drew up scenarios to highlight the ways particular design ideas served dif-ferent user needs.

STILL-PHOTO SURVEYHOW: Follow a planned shooting script and capture pictures of specific objects, activities, etc.WHY:The team can use this visualevidence to uncover patterns of behaviour and perceptions related to a particular product or context. EXAMPLE: For a tap design,the team documented all the situations in which people accessed water.

CHARACTER PROFILESHOW: Based on observations of a real process, develop character profiles to represent archetypes and the details of their behav-iour or lifestyles.WHY:This is a useful way to bring a typical customer to life and to communicate the value of different conceptsto various target groups. EXAMPLE: In order to understand different types of customers and how to target them, IDEO developedfour characters for a pharmacy wanting to reach the male-beauty-product market.


BEYOND DESIGNOver the past decade IDEO has steadily risen to thetop of the international design consultancy prestigetable, picking up over 200 clients including Nike,Amtrak, BMW, Canon and Pepsi. IDEO may repre-sent the cutting edge of design innovation today, butthe problem they are addressing is a century old. In1867, German chemical giant BASF established thefirst industrial R&D laboratory to develop dye tech-nology. Soon afterwards, Thomas Edison, the founderof GE and an individual who filed an average of 25patents a year for his entire adult life, created the firstorganised and systematic corporate-research modelfor product innovation with a predictable return oninvestment at his Central Laboratory in Menlo Parkin 1876. His work formed the prototype for corporateinnovation and development in the industrial era. Forexample, DuPont created one of the most successfulof the first generation R&D labs, in which a project bychemist Wallace Carothers led to the invention ofnylon in 1939. During the next 50 years, nylon earnedthe company between $20 and $25 billion in profits.These early labs were managed by scientists, but asthe complexity of products and services grew by athousand-fold over the next few decades, other disci-plines, such as finance and governance, were added tothe mix.

Mastery of the R&D process remains critical to sur-vival today whether in products or services. It involvesyears of patient (and impatient) investigation, punc-tuated by moments of inspiration. It requiresuncontrollable creativity side by side with disciplinedbusiness practice. And it is, for most companies,tremendously difficult to achieve. Many top managersacknowledge that their corporations are failing atinnovation, and particularly at making the substantialleaps that are required to create products or serviceconcepts that lead to market-changing breakthroughs.Some have lost confidence in the ability of theirorganisations to innovate effectively. No wonder thenthat some larger, and no doubt older, corporations areturning to external sources – firms such as Innosight,Strategos, Doblin and IDEO – for help. What is it thatthey are seeking? Many managers wish to understandthe steps they can take to foster a genuine culture ofinnovation and, just as importantly, to institutionalisean ability to continuously create and shape new prod-ucts and services for today’s ever-changing global

markets. Companies have learned that they need tomanage the innovation process so as to serve thebusiness objectives. Today, R&D is an intensely com-mercial activity, governed by numerous businessprocesses, such as competitive advantage analysis,risk, life-cycle aging, timing of technology in thepipeline, fit with core business strategies and the com-mitment of resources.

Creativity, invention, design and innovation are oftenconfused. Innovation is a holistic process involvingthe entire Organisation of a commercial enterprise,whereas invention is a discrete event, typically per-formed by specialist individuals or very small teams.Innovation requires multi-disciplinary teams and is acomplete lifecycle process. Creativity and design arenecessary, but insufficient. In this sense, IDEO’sdesign innovations are, like every other element in theoperating system for innovation, just a part of themix. Yet in a world of product abundance, mass-cus-tomisation and extraordinarily high expectationswhen consumers interact with public or private serv-ices or business people deal with suppliers, IDEO’score competence is no doubt a vital ingredient. Theirdesign process turns genuine inventions into useable,interesting and beautiful products and services, ren-dering them fit for commercialisation. What IDEOproduce must be relevant to the target markets, andthe timing of the release of those innovations to thosemarkets is critical, as Christensen has taught us. Yetjust as we must move beyond Christensen’s manage-ment frameworks if we are to understand the sourcesof innovation and the critical role of problem solving,so too must we move beyond IDEO’s design innova-tion if we are to understand the full extent of whatinnovation is.

Senge, De Bono, Basadur, IDEO, Christenson’sStrategos and Hamel’s Innosight, each supplies a dis-tinct component of the operating system forinnovation. Thinking tools, work practices, culture,market analysis, strategy, education, training andknowledge management – what’s missing? What liesbeneath the surface of the innovation iceberg?

HERDING AND HEARINGFLOCKS OF BRAINSAccording to Jonas Ridderstråle and KjelleNordström, researchers at the Institute ofInternational Business at the Stockholm School ofEconomics, “Business success is a matter of herdingflocks of brains”. In their book Funky Business –Talent Makes Capital Dance, they observe that in amodern company, 70-80 per cent of what people do isnow done by way of their intellects... and the humanbrain is overpowering the traditional means of pro-duction. Hal Sirkin, leader of Boston ConsultingGroup’s Operations Practice, observes that “Mostpeople think of innovation only in terms of R&D ornew product development – but taking an idea andturning it into cash is an effort that involves almostevery part of a company. The challenge is thinkingabout and managing this extremely broad set of inter-related activity as a unified process”. To meet thechallenge, some companies are turning to a conceptcalled idea management.

If the phrase brings to mind the proverbial company“suggestions box”, think again. Idea managementfocuses the creativity of employees on critical busi-ness problems and increases their participation insolving both line-of-business and “big picture”, mar-ket and revenue related issues. Some call it the“Innovation to Cash” process.

In the past, innovation was defined largely by creativ-ity and the development of new ideas. Today theterm encompasses coordinated projects directedtoward honing these ideas and converting them intodevelopments that boost the bottom line. A newevent, fact or idea emerges, and is sent for evaluationby those able to make the appropriate judgements,and guide the development of the idea. Does the ideaembody the possibility for a new dominant design,service or platform? Can a project be constituted tomanage the development of this initial “seed”?Marsha McArthur, innovation manager at Bristol-Myers Squibb, one of America’s largestpharmaceutical companies, used an idea manage-ment solution to help the company through a periodof industry consolidation and widespread patentexpiration on many “blockbuster” drugs.

When a patent expires and an alternative generic drugenters the market, it is possible to lose 80 per cent ofrevenue in the patented drug line within six months.

In 2001, Bristol-Myers Squibb had four such drugs,each with more than US$1 billion in annual sales.Following an audit of innovation activities in late 2000involving over 400 managers and executives, the com-pany decided it needed to build a pipeline of revenuegenerating ideas to grow its pharmaceuticals and med-ical products businesses. Bristol-Myers Squibbdeployed an idea management hub from idea innova-tor Imaginatik. This software application, accessible onthe company intranet, captured, structured, assem-bled, organised, evaluated and ranked suggestionscollected from the field. It provided essential featuressuch as workflow, idea reviews and security. Ratherthan just collecting random ideas through a tradition-al electronic suggestion box, the system was structuredto maintain employee interest levels and participationrates, aligned to corporate innovation objectives.Workflow-based peer review weeded out bad ideasand promoted good ideas to become mature concepts.Related items were grouped and expanded throughfurther input. Project-specific review teams evaluatedideas against weighted scorecards customised to com-pany-significant events.

The idea management application at Bristol-MyersSquibb was first offered to brand teams supportingspecific products, and was subsequently used to man-age ideas generated around line extensions, marketingtactics and direct communications with doctors andconsumers. By 2003, more than 5,000 ideas had beencollected. One project was the “War on Diabetes”, inwhich Bristol-Myers Squibb introduced a range ofdiabetes management tools that help improve thequality of life for patients, achieving one of the fastestconversion rates for a patented drug in the history ofthe pharmaceutical industry. Over 3,000 individualsfrom sales and marketing worldwide contributed tothe “ideation” process, generating 400 ideas in fourweeks. In 2002, sales of Glucophage XR extended-release tablets grew 29 per cent to $297 million.

Sometimes referred to as the “fuzzy front end” toproduct development, idea management may ulti-mately provide the knowledge management industrywith the validation it’s been seeking, says JonathanSpira, an analyst with research firm Basex. “Peoplehave been waiting for five or six years for a reason tolatch onto knowledge management”, he says. “Ideamanagement could rescue knowledge managementfrom oblivion”.



Bristol-Myers Squibb’s marketing research group con-ducted an extensive post-ideation audit of around 1,000ideas collected in their system to validate the quality ofthe concepts and the eventual business value. The ‘Idea-thon’ study found that 10 per cent of the ideas hadsignificant business value, 2.5 per cent were truly excep-tional and even a single ‘small’ idea could pay for theentire company-wide implementation effort of theassociated software. No wonder that the idea of ideamanagement is growing in popularity. Advocatesdescribe different kinds of “idea-flow” meeting theneeds of different kinds of organisations. Some speak ofextended ‘idea-chains’, designed to manage the collec-tion and development of ideas from external partnerssuch as suppliers, customers and research partners.Such systems include additional features to manageaccess rights, rewards, and intellectual property rights.Idea management structures the collaboration processbetween business partners.

Designed with sensitivity to fit the culture of anorganisation, idea management can help ensure thatthe voices of employees are properly heard within,and focused upon, important corporate objectives.The aim is the identification and evaluation of thoseideas that present the most substantial benefits, allow-ing the development of a fruitful idea pipeline alignedto top down objectives. The by-product may beincreased buy-in to new management initiatives andpositive support for the associated organisational andprocess changes that will inevitably result from theimplementation of those ideas. A form of coordinatedinnovation, idea management solutions supply astarter pack of processes that act as the tipping pointfor a sustainable innovation programme. Theapproach can generate a long-term corporate memo-ry bank, a central and accessible location to organise,categorise and harvest the constant influx of ideas.

Idea management processes close the loop betweenemployees with ideas and senior managers who havethe authority, budgets and motivation to make themhappen. Senior managers, business unit heads, prod-uct/service development leaders or process ownersestablish each campaign, and ideas generated in thefield and throughout the business are directed to quali-fied experts in the business who can evaluate each idea.These ideas might be promoted, demoted, or aggregat-ed with related ideas and further developed, oftenthrough collaboration with the individual that createdthe seed. Idea management helps in other ways too. Itplays a key role in helping to ensure that time and

resources are not wasted on ideas that have been reject-ed in the past. Conversely, it can be used to revive ideasthat were inappropriate before but now have increasedrelevance. In all these senses, idea management helpsfocus resources and further thinking on ideas with highpotential.

Typical software systems for idea management issuereminders to evaluators of upcoming deadlines andunevaluated inputs. Lacking such features, simplerelectronic suggestions boxes tend to fill up with largenumbers of low-quality ideas that are not focusedon business goals. Without automated support,employees are unable to follow up on what hap-pened to their thoughts and tend to become cynical,no longer sharing their insights with their employer.

Sceptics of idea management point to depressing sta-tistics. The Economist reckons that an enterprise hasto start with around 3,000 bright ideas if it is to comeup with 100 worthwhile projects, which, in turn, willbe winnowed down to four development programmesfor new products. William Miller and LangdonMorris, authors of a sweeping and insightful analysisof innovation in the knowledge economy, FourthGeneration R&D, observe that “During the 1980s,American corporations wasted billions of dollars onfailed attempts to innovate, which demonstrates thatjust spending more money doesn’t help if assump-tions are incorrect and the process is flawed...Measuring downstream, it seems that, of four projectsthat enter the development stage, only one becomescommercially successful”. Yet such figures should notbe used to dismiss idea management so lightly.

Case studies have shown that idea management is acollaboration tool, linking top management withinnovative employees with domain expertise via thoseable to interpret, develop and guide those ideas tofruition. Perhaps idea management should berenamed solution development. The intelligent users ofidea management are doing far more than idea-fish-ing; they are focussing the talent of employees bychallenging them to solve hard problems, in engineer-ing, in development, in operations and in marketing.Here is where the real value of idea management lies,not only in the trawl for ideas at the outskirts of theOrganisation, but also in the continued and sustainedinvolvement of all employees throughout the com-mercialisation process. This contribution is necessarybecause companies often underestimate the costsinvolved in driving adoption of a new product or

service. The Economist’s figures refer only to newproduct development, and this accounts for just 15per cent, or less, of the innovation activities a compa-ny should be doing. Reflecting on the invention of theAlto personal office computer, author, consultant andex-Director at Xerox PARC labs, John Seely Brownobserves that “as much, if not more, creativity goesinto the implementation part of the innovation asinto the invention itself”. In this respect, Xerox, theinventor, failed as an innovator, leaving billions inprofits for Apple and Microsoft.

In turbulent times it is easy to give up on innovation.The uncertainty associated with success rates for newideas and the difficulty of commercialising any indi-vidual new idea, leaves many with the sense thatinnovation – the creation of new value – is mysteri-ous, unpredictable and apparently, unmanageable.Searching for breakthroughs is expensive and timeconsuming, and many managers fall back on incre-mental improvements to existing products andservices. After all, line extensions help the bottom lineimmediately. Some companies seek solid ground byeradicating all activities that are not requested by thecustomer, a focus on the consumption chain. Othersmake up for innovation gaps and new product fail-ures by pursuing parallel efforts such as increasingvolume in existing markets through market sharewarfare, reducing costs through downsizing, processimprovements, quality improvements and outsourc-ing, using methods and tools to enhance productivityor customer loyalty, making acquisitions or exitingmarginal businesses. But as Miller and Langdonobserve, “None of these strategies addresses the fun-damental need to increase the value that is providedto customers. Only innovation is competent to dothis”. Where does innovation come from?

AN AGE OF TIME, TALENT AND INTANGIBLESTo keep up with all the new product launches,Procter & Gamble has more scientists on its payrollthan Harvard, Berkeley and MIT combined. Physicalassets and means of production, even those upgradedand installed last year, hardly help companies keeppace and compete in the future. Sure you needplumbing; otherwise things get very messy. But it isno longer enough. In a world of contract manufac-turing and outsourcing overcapacity, “Use all theforce you want. Bludgeon down walls; threaten andcajole. It won’t get you anywhere if you are dealingwith someone who is smarter, quicker and hungrier...

the new competitive battlefield is not the engine orthe air conditioner – it is the design, the warranty,the service deal, the image and the finance package”,claim Ridderstråle and Nordström. In this environ-ment, typified by General Motors’ advertising slogan,“a car full of ideas”, it is more accurate to talk aboutprovices and serducts than products and services, asyou can hardly separate the two. And this is especiallytrue in service-based businesses.

Companies seeking new wealth need to look towardsintelligence, and intangibles; and of course, people.Innovation and competence are locked in an insepa-rable embrace. According to Ridderstråle andNordström, “This is the age of time and talent, wherewe are selling time and talent, exploiting time and tal-ent, organising time and talent, hiring time and talentand packaging time and talent. The most criticalresource wears shoes and walks out the door aroundfive o’clock every day”. They mean innovative people.At design firm IDEO for example, those who have thebest ideas define what it means to be more senior.Little else matters.

Stanford Research Institute’s Paul Romer, speakingabout the 300 largest multinational companies thatcontrol 25 per cent of all the productive assets onearth, states that “the ones with the best recipes willwin”. The individual, team, Organisation or econom-ic region that excels in developing innovativeconcepts and ideas about how to combine and re-combine the ingredients of business will be mostsuccessful. The recipe must be unique enough to cap-ture the attention of oversupplied and demandingcustomers, a recipe that adds real value and a recipethat is extremely difficult to copy. Preferably it shouldbe protected in law. Over the next decade, dealers inand of atoms alone are in for some pretty toughtimes. Unfortunately, atoms are easier to count.

“The financial balance sheet is probably the only500-year-old super-model still capable of arousing afew people”, observe Ridderstråle and Nordström.Yet despite its long-lasting allure, it often only man-ages to capture around 15-20 per cent of the realvalue of many modern companies. Pfizer’s $270 bil-lion market cap is supported more by the patents itowns on innovative drugs such as Zoloft (depres-sion), Zyrtec (allergies) and Norvasc (hypertension)– which have no value on its balance sheet – than byits machinery, land and buildings, which have abook value of $20 billion.



Douglas Graham and Thomas Bachman, in theirbook Ideation: The Birth and Death of Ideas, pointout that recently there has been a sea change inaccounting, driven by the Financial AccountingStandards Board (FASB) 141 and 142 Statements, aswell as the Securities and Exchange Commission(SEC) S-X ruling. The former requires companiesthat have acquired other companies to identify andvalue all the intangible assets in the acquired compa-ny. Soon this rule will extend to all intangibles,whether acquired or developed in-house. “These arenot mere arcane accounting rules”, claim Graham andBachman. “The regulatory bodies are recognising thatthe world has changed and most of the value of com-panies is tied up in their intangibles”. As AlanGreenspan put it, “We are entering the era of‘Ideanomics’.” Yet the FASB is the first to admit thatthe CFO is ill equipped to handle these new require-ments. Their view: “Companies’ inability to identifyand inventory intangible assets may be the most sig-nificant obstacle to any comprehensive recognition ofintangible assets. Managers cannot measure assetsthey do not, today, identify and manage as assets”.

Is innovation an operating expense or an investment?Cecily Fluke and Lesley Kump, writing in Forbes, sug-gest that accounting bias penalises earnings ofcompanies with strong R&D efforts1. So they came upwith a novel approach to deal with this conundrum:adjust earning by adding back R&D expenses, arrivingat what they call innovation-adjusted earnings. ChrisMallon took the idea one stage further in an article inthe Motley Fool. Assuming R&D is an investment,why not add it back to operating cash flow, leading towhat could be called innovation-adjusted-free-cash-flow2. Mallon calculated how this might affect thevaluation of some leading technology companies. Infiscal year 2004, Microsoft generated $14.6 billion inoperating cash, had $7.8 billion in R&D expenses, and$1.1 billion in capital expenditures. Under the strictdefinition, free cash flow was $13.5 billion, or about$1.24 per share. Using the adjusted formula theanswer would be $21.3 billion or $1.95 per share. Thismay be a good idea for shareholders, but it hardlycounts as innovation.

Financial jiggery-pokery alone is not enough. Today,the input of ideas and human imagination make all

the difference. We live and work in a competenceeconomy. Digitisation, globalisation, overcapacity andderegulation are altering the balance between thosewho sell and those who buy on the one hand, andbetween capital investors and competence investors,on the other. It’s a tricky balancing act. ClaytonChristensen questions the status quo, stating,“Financial markets relentlessly pressure executives togrow and keep growing faster and faster. Is it possibleto succeed with this mandate? Don’t the innovationsthat can satisfy investors’ demands for growth requiretaking risks that are unacceptable to those sameinvestors? Is there a way out of this dilemma?”

According to the Economist, the new acid test forglobal firms is whether or not it hurts when youdrop your competitive advantage on your toes, lead-ing to the imperative to manage intellectual property(IP) and intangibles as never before. In the real-time, globally linked, surplus society, competitorswill steal your ideas in two to three weeks.“Knowledge is perishable. Treat it like milk. Date it”,urge Ridderstråle and Nordström. Are they right? Ifso, it is hardly surprising that, alongside tried andtested business strategies such as continuous productevolution, channel expansion, globalisation andmargin growth, leading firms are now placing moreemphasis on the management of intangibles.

Research by academics such as Baruch Lev at the NewYork Stern School of Management has led some com-panies to note a correlation between the successfulbusinesses that emerged from the last 100 years, thecompanies that hold the most patents in the last 100years and those who have been the most innovative inthe last 100 years. No wonder then that IP and otherforms of intangible assets have become a major focusof U.S. businesses, with many other nations seeking tofollow the U.S. lead. Germany is legislating new IPownership laws for universities and encouraging pub-lic-private research partnerships to more closelyfollow the U.S. model. Japanese companies are beingrequired by government-led initiatives to improvetheir intellectual property competitiveness. In thegrowing IP wars, the process by which companiesmanage IP is nothing less than a strategic market-ledbusiness process.

1 http://www.forbes.com/business/forbes/2004/0705/142.html 2 Adjusting For Innovation [Motley Fool Take], July 30, 2004

Bill Gates recently pointed to Microsoft’s R&D as adifferentiator. For fiscal year 2004, R&D spending atMicrosoft represented about 17.8 per cent of revenue.Gates noted that, according to some measures (forexample, “current impact”), its patent portfolio out-paces those of Oracle, Sun, Apple and IBM. Thecompany is on something of a patent tear, filing for2,135 patents in fiscal year 2004 versus 519 in fiscalyear 1998. It’s the same story in many other industrialsectors. Aerospace leader BAE Systems places empha-sis on IP and educates employees about the danger ofallowing IP to leak into the public domain. Once thathappens, ideas can’t be patented and can’t be protect-ed. The company believes it is never too early to startthinking about the patent filing process and theystress that an idea doesn’t have to be a major techno-logical change to warrant a patent, it can be a ‘new,improved’ version of an existing technology. It’s aview also held by the majority of CEOs who adoptthe general stance that innovation, inventions andtechnical know-how are the lifeblood of the companyand, that to leave them unprotected and let intellectu-al property drain away, is reckless.

Patents are a legal proxy for innovation. A patentexcludes others from making, using, offering for sale, orselling inventions. Granting a U.S. patent is a transfer ofthe competence of an inventor from the realm of ideasinto the realm of binding property rights. And it isn’tjust engineering solutions that can be patented. Utilitypatents may be granted to anyone who invents or dis-covers any new and useful process, machine, article ofmanufacture, composition of matter, or any new usefulimprovement thereof.

By not patenting, companies risk losing importantfuture technical advances and the revenue that canresult from licensing. And the principle extends toprocess design, although legal practice in this area is farless developed. But not everyone is convinced about asole and direct link between IP, the size of a company’spatent portfolio, and future earnings potential.

Not all companies are avid patent-filers, and manybelieve that the significance of patent ownership canbe over-stated. It is relatively easy to point to success-ful firms with reliable returns to stockholders whohave rarely sought legal protection for their intangi-bles: knowledge, competence, methodologies andprocesses. While patent-filing may be an indirect indi-cator of innovation activity for high-tech firms, thevast majority of individual patents have little com-mercial value, and the process of obtaining, andenforcing, patents is complex, expensive and timeconsuming. Plus, there are indicators that the patentsystem itself is under stress.

Adam Jaffe and Josh Lerner believe that the UnitedStates patent system has become sand rather thanlubricant in the wheels of American progress. Such isthe premise behind their new book, Innovation andIts Discontents: How Our Broken Patent System isEndangering Innovation and Progress, and What toDo About It. It tells the story of how recent changesin patenting have wreaked havoc on innovators, busi-nesses, and economic productivity. First, new lawshave made it easier for businesses and inventors tosecure patents on products of all kinds, and second,the laws have tilted the table to favour patent holders,no matter how tenuous their claims. Jaffe and Lerner,who have spent the past two decades studying thepatent system, show how legal changes initiated in the1980s converted the system from a stimulator ofinnovation to a creator of litigation and uncertaintythat threatens the innovation process itself.

On the other hand, patents do provide one way todemonstrate value to the marketplace. Numerousempirical studies (e.g. Lev and Sougiannis 1996) haveestablished an economically meaningful and statisti-cally significant relationship between R&D outlaysand subsequent benefits, in the form of increasedproductivity, earnings and shareholder value. In theU.S., knowledge assets account for six of every sevendollars of corporate market value. For high-tech companies this ratio is larger. At the same time, theintangible assets arising from this investment areunder-valued on the balance sheet. Obviously, theuncertainty about intangibles (e.g. products, servicesand processes under development) in respect of theirfuture value-generating potential is substantially larg-er for outsiders than for corporate insiders.

Lev Barach has observed that “Investors react touncertainty by demanding a compensating return pre-mium, which translates to a higher cost of capital tothe company. Indeed, research shows that increasedinvestment in knowledge assets increases both the costof equity capital and debt of corporations”. Hisresearch points to the methods companies can use tostrengthen the way in which their intangibles are pre-sented to the market. Barach believes that “A credibleand coherent disclosure strategy can alleviate theundervaluation problem” and he urges companies to“elaborate on the major knowledge-related items rele-vant to investors – product pipeline, technological andcommercialisation capabilities – and on the effectivemeans of disclosing them, while minimising thepotential competitive and legal harms of disclosure”.



The link between intangibles and the balance sheetleads many companies to envelop innovators with aplethora of legal, compliance and other structuredprocedures to maximise the downstream value oftheir creativity. R&D programmes are structured tocollect, assess and foster the development of insight.Collaborative research is dominated by the languageof contracts, subcontracts, patent filing, licensing,insurances, indemnification, acquisition processes,teaming agreements, cooperative research and devel-opment agreements, memorandums ofunderstanding, non-disclosure agreements, perform-ance-based contracting, grants and costreimbursement. In effect, companies are building bal-ance-sheet amplifiers around their people as theywork to think, create, invent and improve.

Companies are playing a tightrope-balancing act. Infiscally cautious times, where every line item in everybudget is under intense scrutiny, organisations aresubjecting nascent product and service developmentto rigorous screening. R&D personnel and innovatorsin other business units are being trained to think inbusiness terms. The hope is that companies will be ina better position to decide whether an idea is worthpursuing in the first place. One company reportedthat “Our biggest barrier to success is balancing rigor-ous examination of ideas while not eroding ourpeople’s motivation to keep coming up with them”.

At Rohm and Haas (a company that makes specialtymaterials that enhance the performance of paints andcoatings, computers and electronic devices, householdgoods, and more) IP strategy is integrated into alltechnology generation and subsequent commerciali-sation. Patent attorneys sit in development teams asnew technologies emerge. Under the leadership ofDavid Bonner, who until July 2002 was the GlobalDirector of Technology, together with Marc Adler,Chief Patent Counsel, the processes governing researchand intellectual property management became a holis-tic business process, focused on growth markets. Atthe IP Summit in Japan in July 2002, Bonnerexplained that as a result of this approach, “Investmentby Rohm and Haas in R&D has grown and stayedconsistently robust for its industry. Our resolve neverwavered because our senior business management hadconfidence in a holistic, transparent process”. A prop-erly constituted R&D programme avoids swampingbusiness units with an uncontrolled, and rapid, flow ofnew ideas into their commercial operations, often withlittle connection to the existing business strategies.

Resource constraints lead companies to structure theinnovation process so as to focus limited resources onthe most promising ideas. They seek to increase learn-ing though small, low-risk proof of concept projects.Development efforts are funnelled through an inno-vation pipeline, from ideas to experiments, venturesand new businesses. At one end of the pipe, projectsare many and resources are few. At the other end,projects are few and resources are many. Idea man-agement focuses creativity on the few ideas that arerelevant. Product development identifies viable ideasand expands them to generate the most value.Everyone benefits in the end. By managing resourcesand projects against the portfolio of relevant initia-tives, a company develops a capability for continuedrenovation. Intellectual property flows through thepipeline, from mind to market.

Companies are building their operating systems forinnovation, step-by-step and brick-by-brick. They arebonding their R&D process to their commercialisa-tion process. Reducing the friction is a majorchallenge. While it is natural to hide high-potentialsecrets and protect valuable insights that could be thebasis of profitable future products, the widespreaddistribution of useful knowledge enabled by theInternet and other media can make such controlsunfeasible. In the face of pressure to collaborate withpartners and customers in the real-time economy, arewe worrying unnecessarily?

While the key to successful innovation once lay in thecontrolled environment of the corporate laboratory,Eric von Hippel, author of the influential book TheSources of Innovation, shows us that the manufactur-er-as-sole-innovator assumption is wrong. In a globaleconomy, one in which companies focus on core com-petencies – outsourcing all else and in-sourcingmyriad services and competencies from numerouspartners – the innovation process is predictably dis-tributed, across users, manufacturers, suppliers andother collaborators. Yet while external ideas help createvalue, it takes internal R&D to claim a portion of thatvalue (legally and with legal protection).

No innovation holds value until a viable businessmodel successfully commercialises it. HenryChesbrough points out that “If you don’t unlock thisvalue, someone else will”. Companies must recognisethat not all the smart people work for them.

Others are equally able to innovate or exploit some-one else’s promising ideas. Chesbrough advisescompanies to profit from use of their own IP, but alsoto buy IP from others whenever it advances their ownbusiness model. Companies, he says, should expandthe role of R&D to include not only knowledge gener-ation, but also knowledge brokering. Other voicesecho similar sentiments.

In his book Resolving the Innovation Paradox,George Haour encourages the “mobilisation of sub-stantial external inputs into the innovation process,requiring companies to excel as entrepreneurial archi-tects of innovation”. Quoting examples fromGenerics, Intel, Nokia and Samsung, his ideas aboutdistributed innovation “help companies to raise rev-enue by using channels such as licensing and sellinginnovation projects”.

Alph Bingham, former VP of R&D at Eli Lilly, wasfrustrated that the company was spending billions ofdollars on R&D yet the rate at which it was develop-ing drugs had not changed. In 1999 he proposedusing freelancers to supplement internal resources. EliLilly decided to test the idea with the creation of anexternal commercial enterprise, InnoCentive, foundedin 2001. Today, InnoCentive is a Web-based commu-nity that matches top scientists to relevant R&Dchallenges facing leading companies around theglobe, allowing them to reward scientific innovationthrough financial incentives. InnoCentive’s clientsinclude Procter & Gamble, Dow Chemical and BASF,and the research brokerage is reported to have savedEli Lilly millions on R&D expenses. 53 per cent ofInnoCentive’s best freelance researchers are based inChina and India, and North American corporationshave created divisions just to create and overseeInnoCentive-hosted projects.

One company, Dial Corporation, advertises directlyon the site and offers cash prizes for inventions thatimprove their bottom line. Other companies treatInnoCentive as a source of additional resources thatcan be targeted at well-defined fragments of internalR&D efforts.

A SHORT CUT VIA EXPERIMENTATIONBusiness managers who speak only of intangiblesmanagement and the protection of intellectual prop-erty may have got it wrong. Perhaps the focus shouldbe on managing the innovators, as much as it is onmanaging the innovations? While it is essential toupgrade product-development systems, deploy stage-gate processes, structure judgements about risky

projects, bring in collaborators and add in timely dataabout real and projected market demand into thecommercialisation process, a focus on methods isequally important.

“Rather than knowledge management, the key toincreasing internal knowledge is knowledgeable man-agement”, so say Ridderstråle and Nordström. Theydescribe the process of turning core components intocore competencies: gas is what we have in our minds;fluid knowledge comes about when we discuss thingswith others, and solid knowledge is the stuff that isembodied in customers’ offerings, routines and sys-tems. “A car, a PC, a software programme, anice-cream or whatever is, in reality, nothing more andnothing less than frozen creativity. We get an idea(gas), start discussing it with others (fluid); and final-ly develop a customer offering (solid). We rely on ourability to develop processes that enable us to deep-freeze new pieces of knowledge faster than others –decreasing the duration of the insight-output cycle”.

It was competence-based leverage, linked to an insa-tiable drive to experiment, that let Honda, whichoriginally focused on engines, to nevertheless utilisetheir knowledge to make cars, motorcycles, water-craft, pumps, snow blowers and now robots such asPOLAR II, the most advanced pedestrian test dummyin the world. The same is true for service-centricfirms. It is competence-based knowledge, honed atthe customer interface, which ultimately gives rise toenduring service businesses. Competence-transfer-ence, coupled to experimentation, seems to have legsin the innovation race.

Stefan Thomke, author of Experimentation Matters,believes that every company’s ability to innovatedepends upon a process of experimentation wherebynew products and services are created and existing onesimproved. Citing the availability of computer simula-tion and modelling that promise to lift the economicbarriers to being allowed to fail, Thomke reminds usthat “Never before has it been so economically feasibleto ask ‘what if ’ questions, generate preliminary answersand guide the innovation process... Put concretely, with-out experimentation, we might all still be living in cavesand using rocks as tools”.

According to Thomke, all organisations need a systemof experimentation and, of course, the more rapidand efficient the system is, the quicker researchers canfind solutions. Thomke urges companies to organisefor rapid experimentation; fail early and often; antici-pate and exploit early information; and combine newand old technologies.



When Edison noted that inventive genius is “99 percent perspiration and 1 per cent inspiration”, he waswell aware of the importance of an organisation’scapability and capacity to experiment. Edisondesigned his labs, including personnel, equipment andlibraries, to allow for efficient and rapid iteration. Astoday’s digital technologies for product, service andprocess modelling and simulation offer more value forless money, they provoke fundamental challenges tothe innovation Organisation, culture and design.

Michael Schrage, author of Serious Play: How TheWorld’s Best Companies Simulate To Innovate,argues that the future of modelling, simulation andprototyping is the future of innovation. Drawing onthe experience of companies including Walt Disney,Boeing, Merrill Lynch, GE, Sony, IBM, IDEO,Microsoft, Royal Dutch Shell, DaimlerChrysler andAmerican Airlines, Schrage shows us that serious playis not an oxymoron; it is the essence of innovation.The challenge and thrill of confronting uncertaintyrequires a healthy dose of improvisation. Whetherthese uncertainties are obstacles, or allies, depends onhow you play. His central message: “Any tools, tech-nologies, techniques, or toys that let people improvehow they play seriously with uncertainty are guaran-teed to improve the quality of innovation. The abilityto align those improvements cost-effectively with theneeds of customers, clients, and markets dramaticallyboosts the odds for competitive success”.

Experimentation, simulation, discovering options,evaluating alternatives and problem solving, these alllie at the heart of innovation in virtually every disci-pline. When the IDEO creative team files a newtechnology in the Tech Box, they are storing knowl-edge about a past problem and a future creativesolution option. The same idea is inherent in everylegal patent. All inventions embody solutions to pre-viously unsolved problems. Leibniz once observed: “Itpays to study the discoveries of others so that we alsofind a new source for inventions”. Perhaps managinginnovators is, in itself, not enough? Should we studythe methods used by those we employ to innovate:engineers and scientists? They may be locked in a laband cloistered by legal processes, but their experimen-tal methods are universally applicable.

AND SUDDENLY THE INVENTOR APPEAREDAll significant innovations embody solutions to com-plex problems. While ideas sometimes take the form ofa technical insight with no apparent commercial appli-cation, in most cases, a problem or opportunity

inspires the insight. As Imaginatik have found throughpractice, there is always a reason to solve a complexproblem, otherwise nobody would bother. This is whythe most effective idea management campaigns arethose where a serious challenge is put to employees. Allwho innovate are required to eradicate obstacles andfind approaches that move them closer to the ideal sys-tems they seek to build.

Opportunity recognition occurs when someone says,“This material we’ve invented might be of value tocustomers”, or “If we could solve this problem, wecould create value for our customers and our share-holders”, or “This might produce a huge costadvantage”. Every product, service and process pro-ceeds through generations of design and evolution inits market and, at every stage, the innovator faces formidable barriers for which inventive solutions arerequired. These solutions may be technological, orthey may require a business innovation, such asprocess redesign or market alignment. For example,it’s one thing to create an innovative product or service, but it’s quite another to create a process capable of manufacturing the product or deliveringthe service at a price the target market will accept.

Often, a complex cocktail of problems limits a compa-ny’s ability to innovate. Innovation in the product,service and process realm is connected; some innova-tive ideas must await process innovation before theycan achieve market traction. At every stage – from con-ception of a new idea, through development tocommercialisation and eventually to marketing andbusiness coming in – hundreds of problems must beresolved. The innovation process is littered with hur-dles, both high and low, from new science to creativemeans of delivery to detailed product architecture, toservice concept, to business model. These problems arewhat innovation is, and it is up to the individual andthe teams they work within to solve them.

Problem solving lies at the heart of a new methodolo-gy for innovation that, at its core, is a study ofcontradiction. A contradiction exists in a system when,in attempting to improve one parameter of the sys-tem, another parameter you care about deteriorates.For example, if we attempt to make a productstronger by making it thicker, it also gets heavier. Ifwe use better materials, the cost goes up, and so on.Stan Kaplan, engineer and applied mathematician, anexpert on Quantitative Risk Assessment (QRA) andthe founder of Bayesian Systems, points out that “thetypical engineering approach to dealing with suchcontradictions is to trade-off, in other words, to com-promise”. While compromise may be useful in some

situations, and may itself contribute to minorimprovements, compromise cannot be considered tobe innovation and is unlikely to help solve furtherproblems down the line that prevent or limit theproduct, service or process from being successfullydeveloped, commercialised and improved in ways thatprovide value to customers. By contrast, Kaplanbelieves that “an invention is an idea that surmountsthe contradiction, moving both parameters in afavourable direction”. If true, the patent literatureshould be littered with useful solutions, and inven-tions must be inherent to all commercially successfulproducts, services and organisations.

Innovators solve problems by focussing upon theuseful parameters of a system that, if increased,would enhance it substantially, but also, the harmfulaspects that, if left unchecked, would lead to a con-tradiction. Contradictions are significant, for iferadicated or reduced, directly or indirectly, theycontribute to the development of a breakthroughsolution. Avoiding compromise is central to innova-tion. Tradeoffs – strength versus weight, reliabilityversus cost, service quality versus resource and out-put versus input – are not the same as an inventivesolution that creates new value. Inventive solutionsemerge by exploiting useful effects and eliminatingharmful effects. The subject can even be taught as adiscipline, with the effect of increasing the overall“inventiveness” of employees. Problem solving is ageneric skill and can be applied across many differentdomains. Make someone more effective in onedomain, and they will be more effective in others.

The suggestion that innovation can be taught liesuneasily with those who believe it arises from psycho-logical factors and that great ideas come from a specialplace in the mind. Yet we happily teach Six Sigma tocreate “blackbelts”, experts who are able, using reliablestatistical methods, to substantially improve processreliability, even in fields where they have no domainknowledge. By applying the Six Method discipline, ablack belt is able to identify process instances that falloutside of the specification, root out the cause ofprocess failure and suggest avenues for redesign. Isthere a reliable innovation algorithm that, simply bybeing applied, identifies contradictions and finds solu-tions by avoiding compromise?

Experiments are guided by science. Teams solve prob-lems that lead to valuable innovations usingsystematic methodologies. Examples include theTheory of Constraints (TOC), Critical Chain, DesignFor Six Sigma (DFSS), Quality Function Deployment(QFD) and the Taguchi Method.

DFSS led GE to deliver record financial results in 1999,with revenue and earnings growth exceeding 25 percent. In that year, GE introduced seven products usingSix Sigma methods, and more than 20 were released in2000. Jeffrey Immelt said at the time, “These productsare different – they capture customer needs better andcan be brought to market faster than ever before. Wewill see more than $2 billion worth of DFSS productsby the end of 2000”.

QFD enabled 3M, AT&T, Boeing, DaimlerChrysler,Ford, GM, Hewlett-Packard, Hughes, Kodak, Lockheed-Martin, Pratt & Whitney, Motorola, NASA, Nokia,Raytheon, Texas Instrument, United Technologies,Visteon, Xerox and other Fortune 500 companies toreformulate products without sacrificing customer sat-isfaction. Their objectives were to open the path toforeign markets, to differentiate services where therewas customer value, engineer common elements thatwere invisible to the user, see opportunities in advanceof market demand and develop hybrid products fromtwo or more best selling lines.

The Taguchi Method (robust design) enabled Kodak’scopy machine manufacturing division to improve thereliability of its paper feeder from mean time betweenfailures of 2500 sheets to 40,000 sheets.

But if you thought you had heard about all the bestpractice acronyms and trends out there, think again.To the current plethora of strategies for adaptationand survival is now added something that may be away of thinking, a set of tools, a methodology, aprocess, a theory or even possibly a deep science, butwhich may be gradually shaping up as ‘the next bigthing.’ It’s called TRIZ, pronounced ‘trees’ and is anacronym for the Russian words that translate as “TheTheory of Inventive Problem Solving”.

THE MESSAGE OF TRIZ: INNOVATION CAN BE CODIFIED Remember how surprised you were when Googlefound the Web site you needed and ranked it #1?Some TRIZ users experience a similar epiphany.Don Masingale, retired senior engineer at BoeingCorporation, will tell you that TRIZ holds the answerto just about any engineering problem you can imag-ine. Quoted in PlaneTalk, Boeing’s internalnewsletter, he said, “When you see something thisgood, you just can’t walk away from it. I use TRIZeveryday in my thinking and processes. It’s an inno-vative way of solving problems and meeting all thecriteria our customers want us to have, whether com-mercial or military”.



Practical training sowed the seeds of TRIZ at Boeing.More than 700 people attended Masingale’s five-daysessions. The impact was profound. Boeing’s executiveengineering council set up a senior technical team toinvestigate the claims being made. They have since rec-ommended increasing the visibility of TRIZ amongtechnical and managerial ranks.

TRIZ helped Boeing solve a slow-burn issue that hadbeen keeping a team of aeronautical engineersscratching their heads for nearly three years. Althoughthe attendees at one of Masingale’s internal trainingclasses didn’t know it at the time, the solution theydeveloped under the guidance of TRIZ expert ZinovyRoyzen would result in US$1.5 billion worth of cus-tomer orders. As reported in Business 2.0, Masingalecredits TRIZ-inspired designs with selling Boeing’snew 767 air-to-air refueling jet to the governments ofItaly and Japan. For engineers like John Higgs, 767Tanker Transport chief project engineer, it was a firststep out of the “psychological inertia” that hamperscreativity. The results, according to Higgs, “put usahead in our race to reconfigure the 767 into a com-bined tanker and transport for military use”.

The Tanker Transport programme at Boeing present-ed what Higgs and Masingale refer to as a “classicengineering conflict”. The 767, dubbed the world’smost efficient airplane, is a two-engined aircraft and,by design, has no excess hydraulic power. Yet it needsto be capable of pumping fuel at 900 gallons a minuteat the boom-nozzle interface – while flying 300 knotsat 15,000 feet altitude. No easy feat. Higgs says that“By applying TRIZ principles, the class came up withtwo complete solutions and two supportive solutionsthat my team had never thought of. These solutionshave many useful auxiliary solutions”. As with manybreakthroughs inspired by TRIZ, “the solutions mustremain under wraps because they are highly competi-tion sensitive”, claims Higgs.

Surprising as it may sound, TRIZ pulls rabbits fromhats, find needles in haystacks and generates intellec-tual property. Its systematic approach to innovation isthe antithesis of unreliable, hit and miss, trial anderror, psychological means of lateral thinking. Its sci-entific, repeatable, procedural and algorithmicprocesses surprise all who first encounter them.Sounds like magic?

After just one TRIZ workshop, engineers at NationalSemiconductor modified a machine that tests inte-grated circuits (ICs) that had gobbled up $76,000 inthe previous five months of trial and error. Within aweek, TRIZ-based software responded with 40 direc-tions in which to investigate a solution. The mostpromising idea was the replacement of frail IC con-tacts with an elastomer, reducing the physical impactto IC leads during insertion. The consensus amongthe engineers working on the problem at the time wasthat, without guidance from TRIZ, the project wouldstill be hunting for a solution. Other companies havehad similar experiences.

At Rohm and Haas, and later at Cabot Corporation,David Bonner was “surprised by the impact of TRIZon colleagues”. Senior scientists became very con-cerned, even agitated, when the use of TRIZ, inconjunction with company domain experts, was ableto solve problems that had eluded resolution foryears. “Had these problems been side issues no onewould have paid much attention. In fact, they centredon areas of research directly related to the company’score competence in specialty materials”.

Early adopters of TRIZ in a given industry sector ormarket niche claim that use of the methodology canprovide a strong competitive advantage. One suchstory relates to a major Midwestern consumer pack-aged-goods company who trained more than 2,000engineers in TRIZ which led to a series of break-through product-innovation efforts. One of theseinitiatives resulted in a new product that generated$200 million in sales in its first year. The adoption of astructured process for innovation – a heretical belieffor some more “creative” individuals – is claimed to bea major component of the company’s recent 300 percent increase in patent production, and the fact thatthe company is now recognised as an innovation leaderby competitors, channel partners, and Wall Street.

Stories such as these are leading some academics toexamine TRIZ in detail. Vanderbilt University, in con-junction with Carnegie Mellon, is consideringestablishing an industry benchmark to demonstratethat a graduate equipped with modern TRIZ toolscan overcome technological challenges faster than anengineer with five to ten years of experience but wholacks this knowledge.

A FATHER FOR INVENTIONTRIZ is the brainchild of Russian scientist and engi-neer Genrich Altshuller. Born in 1926, he made hisfirst invention at the age of fourteen and was latereducated as a mechanical engineer. While employedin the patent department of the Soviet navy, hebecame intrigued by the question of how an innova-tion happens. Was it a mysterious, capricious andrandom event, highly dependent on the individual inwhom it occurs – a matter of luck bounded by thepersonal experience of the inventor – or could inno-vation be understood as the result of systematicpatterns in the evolution of systems? Altshuller adopt-ed an empirical approach to finding out. He began byreading patents.

Patents represent the best definition we have of whatconstitutes “invention”. Patents necessarily contain adetailed description of a new solution to an old ornew problem. If this knowledge can be tapped, greatvalue can be unlocked. According to the WorldIntellectual Property Organisation (WIPO), the patentbase covers 90 to 95 per cent of worldwide researchresults; and further, making good use of the patentswould reduce research time by 60 per cent andresearch costs by 40 per cent.

Grounded in the patent base, but stripped of the tech-nical subject matter, Altshuller found that the sameabstract problem types appeared time and time again,together with corresponding generic solutions. Afteryears of study he found that only a small number ofengineering analogies and abstractions were necessaryto explain the vast majority of inventions. He gradual-ly became convinced that inventive problems could beclassified, and solved methodologically, just like otherengineering problems. Once these principles had beendiscovered and codified, they could be applied to anyproblem situation, yielding many innovative (andoften patentable) ideas. Those that took an interest inhis work felt that the principles he had uncovered inthe patent literature were sufficiently generic that theycould be written down, taught and reapplied acrossdisparate, far-flung, fields of human endeavour. And asthey worked, more and more patents were being filed.Two million patents later, Altshuller’s original abstrac-tions have grown into an impressive and useful bodyof work that is now being applied by leading organisa-tions in North America, Europe and Asia. As withmost technical topics, TRIZ can be self-taught, butformal training helps focus the mind.

Henry Ford once said, “I have heard it said…that wehave taken skill out of work. We have not. We haveput a higher skill into management, planning and toolbuilding, and the results of that skill are enjoyed bythe man who is not skilled”. Before the car assemblyline, labour cost to manufacture just one car was 160hours. By 1908, that had fallen to 12 hours and by1916 to 1.5 hours. The result: Ford’s labour cost in1916 was $52.73 per car, against $190.87 for competi-tors not using the assembly-line innovation. Thisincrease in productivity translated into lower pricesfor consumers. Pre-Ford, a car cost $3000. By 1908the price had dropped to $950, and 1916 to $280. As aresult, Ford’s market share rose sharply, from zero in1907, to 56 per cent in 1916. And Ford’s investorswere very happy. Profitability rose from nothing in1907, to $30M in 1914 and to $60M in 1916.

Ford had eradicated what TRIZ methodologists call acontradiction, in Ford’s case between labour cost andproductivity. Ford achieved this using an inventiveprinciple, the conveyor belt metaphor. It exists inTRIZ today, and can be observed in numerous inno-vations across many industrial sectors. TRIZ containsthousands of such insights, many of which are inher-ent to the modern production line and numerousother products, services and processes.

Modern versions of TRIZ are the result of decades ofanalysis, by hundreds of scientists and inventors, ofmillions of worldwide patents and related sources ofknowledge, across all engineering disciplines.Hundreds of patterns of invention and technologicalevolution have been extracted and codified. Thisknowledge has been incorporated into proceduresthat guide innovators toward breakthrough solu-tions, direct the evolutionary path of developmentand help anticipate future limitations or roadblocks.Today, TRIZ practitioners report that dipping intothis knowledge base encourages thinking and prod-ding at technical systems until solutions todeep-seated roadblocks are identified, problems thatlimit a product from developing along a desirableline of evolution in a market.



Despite the fact that there is little commercial valuewithin the vast majority of individually filed patents,the rigorous criteria applied by patent officers helpsensure that the overall body of knowledge representedby the patent base continues to grow in value – atleast to inventors. This feeds directly into the develop-ment of TRIZ. Since TRIZ looks across the patentbase as a whole to uncover abstract principles, thelack of commercial value in any single patent does notlimit the value of TRIZ. In any case, individualpatents rarely represent a complete solution. Often,multiple patented inventions, often from very differ-ent disciplines, form the basis for commercially viableproducts and services.

TRIZ has been around since the late 1940s, but thecomputer revolution has made the method practical,taking the grunt work out of exploring numeroustrees of alternative solutions. Software programmes tosupport TRIZ are available from several companies.Some are little more than e-books that guide engineers in the use of classicalTRIZ. Others could be dubbed computer-aided inno-vation (CAI). One company offers a simple, yetpowerful, problem formulator. Useful and harmfulfunctions of a system can be modelled usingeffect/counter-effect graphs. From these, an exhaus-tive set of sub-problems can be generated each ofwhich, if solved, would contribute to improving theoverall system without compromise. Other packagesoffer links to extensive patent databases. ResearchGroup AMR has reported that innovation software isin use by many commercial firms and can reduce theidea-to-concept time from two months to two hours.

A word processing application will not teach you howto write a novel, just as a shovel will not dig a hole.However, both tools will help you achieve your goalsfaster and more efficiently; assuming that the basisupon which the tool works is sound. Where inventorsand inventions are concerned, beware. Quacks aboundand, no doubt, charlatans exist who peddle beguiling

descriptions of simplistic software that, if only you buyit now, will make you rich beyond your dreams. Naïveindividuals can be led to believe that finding an inven-tion semi-automatically and then filing it as a patentwill create lucrative future licensing options. Scientistsknow life is not so simple. Nevertheless, software toolswill no doubt play an increased role in innovation inthe near future.

Dr. Elena Averboukh, a professor at Germany’sUniversity of Kassel IMAT-Institute for Measuring andAutomation Technologies, is positive about the use ofcomputer tools to support innovation. Quoted in TheManufacturer, Averboukh claims that “Tools-basedtraining allows one to master the TRIZ methodologyin a shorter time and to use it efficiently across diverseproblem-solving in marketing, business development,product design, and business process improvement”.Perhaps this is why MIT, renowned for its commitmentto innovation and technological advances, has madeinnovation software widely available to students. Thesoftware provides pre-configured and customisableworkflows that guide students through proven, easy-to-follow innovation processes such as root-causeanalysis, problem determination, patent analysis andsemantic knowledge retrieval providing fast, pinpoint,access to relevant scientific and engineering content.Via this programme, MIT students also have access toover 15 million patents from worldwide patent collec-tions, and access to more than 9,000 scientific effectsand 2,000 scientific websites.

To maximise the value of software tools, the best soft-ware engine working with the most complete TRIZknowledge base is needed. Unfortunately, driven bycommercial realities, the TRIZ community is partlyfragmented and split into competing camps. The bestsoftware does not necessarily include the latestmethodological developments. Conversely, the bestmethodologists are not the best software developers.Nevertheless, over time, better software will becomeavailable.

Table 3:Altshuller defined five levels of invention by studying the patent base

1.APPARENT OR CONVENTIONAL SOLUTIONS: 32%

2. SMALL INVENTION INSIDE PARADIGM: 45%Improvement of an existing system, usually with some compromise

3. SUBSTANTIAL INVENTION INSIDE TECHNOLOGY PLATFORM: 18%Essential improvement of existing system

4. INVENTION OUTSIDE TECHNOLOGY PLATFORM: 4%New generation of design using science, not technology

5. DISCOVERY: 1%Major discovery, new science, basis for new technology platforms


CREATIVITY CAN BE TAUGHTSome companies that have tried TRIZ have been dis-appointed by the results achieved. Lack of training isthe reason for TRIZ failures. Companies believe,incorrectly, that books alone will help. They won’t.Professional training is required, preferably, by apply-ing TRIZ to a practical problem at hand. In TRIZ,learning on the job is a good thing, not a shortcut.TRIZ cannot be studied in any meaningful way unlessit is applied to solving problems. Yet few firms enlist aprofessional coach during initial projects. And not allfirms offering TRIZ training are well versed in TRIZor have access to modern TRIZ methods and soft-ware. On the other hand, not all companies need themost advanced form of TRIZ, and much can doneusing basic TRIZ concepts to enhance the creativity ofemployees, from CEO to janitor.

Some firms have dismissed TRIZ as a strategic tool,despite employees’ enthusiasm for the method. Thereason is simple. The methodology comes in differ-ent variants, some more powerful than others.Companies that look no further than “classicalTRIZ”, imagining they have found a strategic tool, arecertain to develop a jaded view. Unfortunately, thevast majority of published information describesTRIZ at this early stage in its development. Wellknown TRIZ tools, such as the classical “contradic-tion matrix”, a simple table that lets an inventor lookup potential solutions that bypass the need for com-promise (enhancing one product feature woulddegrade another etc.) are simplistic and controver-sial. Can the table ever be complete? Are the genericsolutions the table describes so abstract that mappingthem back to specifics is either impossible or unreli-able? How large does the table have to be toguarantee a solution? Are the solutions only relevantin engineering?

If you are tempted to dip into TRIZ looking for sim-ple answers to complex problems, think again. Yet forthose who go further, and who learn the basis for howTRIZ works, a quick look under the hood at a com-prehensive modern version of TRIZ will leave manystunned by its depth, applicability, and potential.

If you have read the works of Eliyahu Goldratt, origi-nator of the theory of constraints (TOC), you mayalready have an intuitive understanding of how TRIZworks. In the business novel, The Goal, Goldratt tellsthe story of Alex Rogo, a harried plant managerworking ever more desperately to improve perform-ance. His factory is rapidly heading for disaster. So is

his marriage. He has ninety days to save his plant orit will be closed by corporate HQ – with hundreds ofjob losses. It takes a chance meeting with a colleaguefrom student days – Jonah – to help him break out ofconventional ways of thinking to see what needs tobe done. Like a chain with its weakest link, in anycomplex system at any point in time, there is usuallyonly one aspect of that system that limits its ability toachieve more of its goal. For the system to attain anysignificant improvement the constraint must be iden-tified and the whole system must be managed with itin mind.

During their first meeting, Jonah asks Alex a simplequestion: “Just between us: Was your plant able toship even one more product per day as a result ofwhat happened in the department where you installedthe robots?” Alex, unable to respond with convincingfigures, pushes Jonah to explain. “Check your figuresif you like... but if your inventories haven’t gonedown... and your employee expense was notreduced...and if your company isn’t selling moreproducts – which obviously it can’t, if you’re not ship-ping more of them – then you can’t tell me theserobots increased your plant’s productivity”.Over the course of the novel, Jonah teaches Alex howto redefine his goals, see the whole problem and erad-icate constraints. Through Jonah, Alex learns how toremove obstacles that block the Organisation fromworking together as an integrated system. The resultis significant and sustainable improvement in eachand every problem area.

The theory of constraints (TOC) is used by thousandsof companies. It is taught in hundreds of colleges,universities and business schools. TOC allowedSeaGate Technology and AGI to bring the first ‘15,000rpm’ disc to customers ahead of the market, causingall other companies to pull out. Lockheed Martin andthe Boeing Corporation used TOC to build the mostsophisticated jet fighter in the world. LucentTechnologies’ Fibre Optic Cable Division used TOCto halve its product introduction cycle, improve on-time delivery and increase the Organisation’s capacityto develop products. Balfour Beatty plans civil engi-neering projects using TOC. The US Air ForceHealthcare System used TOC to deal with downsizingand cost cutting without compromising quality ofservice or meeting patient’s needs.

To get a sense of TRIZ, think of the theory of con-straints but taken to the extreme. Visteon, a FordMotor Company spin-off and a tier one supplier in

the automobile industry, had a simple objective:develop at least three new and innovative concepts,each with the potential of generating $150 million inrevenue. Visteon turned to TRIZ experts, IdeationInternational, for help. Ten subject matter expertsfrom varying automotive disciplines worked withIdeation scientists to develop new concepts, roadmapsand business plans for automotive security and con-venience systems. Three months of work resulted in194 new ideas, 60 new concepts, 27 scenarios forproduct evolution and the filing of several patents.

TRIZ allowed a car manufacturer to reduce theweight of the car door while preserving the lateralprotection it provides to passengers during impact.TRIZ allowed a manufacturer of jet engines to reducethe weight of a particularly heavy engine part by over30 per cent, and thus increase the engine efficiencyand decrease the energy loss of the aircraft. TRIZ hasbeen applied in the solution of thousands of suchproblems, from improving truck fenders at Ford tooptimal planning of complex production lines andprocesses in the oil and fuel industry at AMOCO.TRIZ helped Johnson & Johnson develop an innova-tion in feminine personal hygiene.

It is even possible that the world’s most famous inven-tion, the incandescent bulb, may have occurred earlierhad TRIZ existed at the time. Electric current passingthrough metal filaments produced light as early as1801, but the filaments burned themselves out tooquickly to be of use. For TRIZ experts this is a contra-diction: The filaments must burn hot enough toproduce light but not so hot as to consume them-selves. It was not until the late 1870s that Sir JosephWilson Swan and Thomas Alva Edison resolved theproblem. Placing the filaments in a vacuum allowedthem to produce light without burning themselves outtoo quickly.

TRIZ solves these types of engineering contradictionswith ease. For example, there is the principle ofdynamicity, where the characteristic of a system mustbe altered to provide optimal performance at eachstage of an operation. It’s desirable for an umbrella tobe broad so that it will shield you from rain and alsofor it be compact so that it is portable. Applying theprinciple of dynamicity makes an umbrella that’sbroad when it’s raining, but folds into a compactshape when it’s not.

MUMBO JUMBO?Many household name Fortune 500 firms use TRIZtoday, but the methodology is far from a householdname. Engineers at Dow Chemical are developingnew polymers with TRIZ. Otis Elevator used TRIZ toprevent escalator belts from wearing. TRIZ solvedautomotive transmission problems at Peugeot. AlliedSignal used TRIZ to reduce the weight of contain-ment rings for aircraft engines reducing theassociated costs of FAA tests. LG Electronics, the thirdlargest company in Korea, eradicated noise problemsin air conditioners using TRIZ. Samsung, a majorKorean company, recently flew four Altshuller disci-ples to South Korea to teach its scientists about TRIZas part of a programme to strengthen its innovationcapabilities. The global director of innovation atProcter & Gamble is reported to be skilled in TRIZ.Using TRIZ, companies are teaching their core com-ponents how to invent.

Perhaps because of the secrecy that surrounds individ-ual TRIZ projects, stories that would otherwise attractattention to the methodology are suppressed and thevast majority of people in business have never heardof it. Yet TRIZ may be about to go mainstream. Will ittake its place alongside more widely known and prac-ticed methods such as Six Sigma, QFD and Taguchi?Some claim that’s already happened. SubirChowdhury, executive vice president at the AmericanSupplier Institute, a consulting and training firm onSix Sigma and robust engineering, cites TRIZ in hisbook Design For Six Sigma.

Chowdhury, previously a quality consultant to GM,claims that “Innovation can be made more manage-able through TRIZ. Systematic innovation may seeman oxymoron, like jumbo shrimp, but with TRIZ,individuals can generate amazingly creative solutionswithout threatening the stability of the company”.Chowdhury views TRIZ as part of Design For SixSigma and makes reference to the acronym “DFSS-TRIZ”. He claims that the reason DFSS-TRIZ worksso effectively is, “The simple fact that over 90 percent of the underlying generic problems product andprocess designers face today at a given company havealready been solved at another company or even in acompletely different industry – perhaps even forentirely unrelated situations”.


For the close-knit community of TRIZ masters, manyof them Russian intellectuals like Boris Zlotin andAlla Zusman who worked with Altshuller until hisdeath in 1998, TRIZ is the study of the evolution ofartificial systems: products, services, processes, organ-isations, society. At Ideation International, thesescientists see themselves as furthering the develop-ment of a new discipline, and providing practicaltools, applications and processes around the ever-deepening TRIZ theory. Are these people justultra-bright and, by bringing rigour to a problem sit-uation, illuminate solution options that others cannotsee because they are paradigm bound within theirown experience? How much is due to TRIZ and howmuch to their intellect? Has the striking nature of theproblems they have solved led some observers toimbue TRIZ with almost mythical qualities? Or is itthe case, as some academics are beginning to con-clude, that modern TRIZ represents, if not “the truth”,then perhaps the most complete approach we have forstudying the evolution of technical systems and solv-ing problems limiting their development?

The bottom line is that no one really knows if TRIZ ismumbo-jumbo, pseudo-science or a seminal break-through. While case studies, and the personal storiesof advocates, speak of the effectiveness of TRIZ, andwhile there are numerous academic papers thatattempt to explain how TRIZ works in specificinstances, the method has not been studied academi-cally. Whatever TRIZ is, it is impressive. Examinationof its databases and processes reveals the deep insightof those who developed them. And echoes of TRIZcan be found in many age-old business stories.

Without realising it, engineer and social scientistAndrew Hargadon has published research that givescredence to the claims of those who advocate TRIZ.Did you know that Henry Ford’s revolutionary carassembly line came from an unlikely blend of obser-vations from Singer sewing machines, meatpackingand Campbell’s soup? Or that the engineering inno-vation firm Design Continuum pulled together ideasfrom various medical devices to develop the ReebokPump shoe? That’s how TRIZ works. In his book,How Breakthroughs Happen, Hargadon cites pastinnovations and demonstrates that many are the result

of synthesising, or “bridging”, ideas from differentfields. Innovation, he argues, is the result of simultane-ous thinking in multiple boxes, not of theoft-prescribed “thinking outside of the box”. Why doIDEO bring domain experts from different fieldstogether in every project? Cross-fertilisation. Writingin the foreword to Hargadon’s book, KathleenEisenhardt observes that the concept of “bridging” canbe counter-intuitive, “Whereas it may be appealing [toinnovators] to focus on the future, break-throughinnovation depends on exploiting the past. Often,combining well-known insights from diverse settingscreates novel ideas that can, in turn, evolve into inno-vations. This kind of evolutionary approach is howbiology works... organising structure can dominateindividual creativity”.

THE DEVELOPING TRIZMethodologies develop over years and decades. Forexample, Six Sigma has evolved from reducing prod-uct defects to reducing variation around business goalaccomplishment. Likewise, TRIZ is expanding and,while its newest applications are far from common,their impact is beginning to be felt.

DaimlerChrysler looked into the future of steering col-umn technology using a modern TRIZ process calledDirected Evolution (DE)3. The same idea was used atAmerican Northern Telecom for studying the future ofvoice recognition. Similar projects are being conductedtoday for the petrochemical industry and in the field ofwireless communication. Another TRIZ process,Anticipatory Failure Determination (AFD)3, has beenused to analyse mechanical failure in helicopter rotors.AFD was also used to anticipate and determine ways inwhich terrorists could use information overload as apotential “weapon of the weak” in future informationwarfare. At a high level, TRIZ is even being used to mapthe possible future of entire industries.

Take the automotive industry as an example. With theadvent of global warming and the worsening of urban air pollution, many in the auto industrybelieve that electric or hybrid cars are inevitable andare working on discontinuous innovations to makethem a reality. For automotive systems, examples of


Table 4: Companies known to be using TRIZ to varying degrees

Allied Signal,Amoco, BAE Systems, Boeing Corporation, Brunswick-Life Fitness, Cabot Corporation, Chrysler, DaimlerChrysler,Dana, Dow Chemical, Dura Automotive, Eastman Chemical, Ford, GM, Hewlett-Packard, Hitachi, Honeywell, IBM, Intel, Johnson &Johnson, LG Electronics, Lockheed Martin, Motorola, Kimberly-Clark, Kodak, McDonnell Douglas, NASA, National Semiconductor,Navistar Nortel, Otis Elevator Panasonic, Parsons, Peugeot, Procter & Gamble (P&G), Samsung, Rockwell, Shell, Rohm and Haas,Rolls Royce,Teck Cominco,Toyota,TRW, UNISYS, United Technologies,Visteon, Xerox

3 A trademark has been registered by Ideation International


useful functions include transportation with informa-tion, style, entertainment, climate control, comfort,speed, tow or carrying capacity, movement over deepsnow or off-road, and so on. Examples of harmfulfunctions include pollution or poor exterior air quali-ty, poor interior air quality, safety and crash concerns,operating cost, use of fuel and energy, quality issues(especially items associated with vehicle dependabili-ty), vehicle concerns with reliability and robustnessover time, dependability concerns, and recyclability orreuse of materials and parts at the end of the vehicle’slife. The problem was analysed using TRIZ directedevolution. The insights gained went further thanrequiring a new type of fuel cell, and suggested thatthe next generation in the auto industry wouldrequire a transition, from making vehicles less harm-ful to the environment to making vehicles that, whendriven and upgraded, positively improve the environ-ment. Then the more cars, the better!

The analysis coincided with the ideas of WilliamMcDonough and Michael Braungart as set out in theirbook Cradle to Cradle. A key idea that emerged fromthe TRIZ analysis was a new concept in manufacturing:the disassembly line. In this futuristic manufacturingscenario, vehicles are modularly designed for rapid dis-assembly and replacement/refurbishment of keycomponents. The transportation provider owns thevehicle and takes responsibility for maintenance, repair,recycling, refurbishment, and freshening of style, fea-tures, performance, and function. The consumer entersinto contracts for vehicle use and reuse, with options toupgrade features on demand.

THE URGENT NEED TO EXPANDINTELLECTUAL PROPERTYGiven the effectiveness of TRIZ to generate new solu-tions, it is perhaps not surprising that themethodology has become thoroughly mixed up withthe debate over the value of intellectual property andpatents. While TRIZ is primarily used to solve com-plex problems that limit the future development ofsystems such as products, services, processes andorganisations, could it be used to help structure thesearch for IP itself?

At Rohm and Haas and at Cabot Corporation similarevents occurred. Venture business was doing well, buta major competitor blocked growth in certain sectors.TRIZ directed evolution was employed to understandhow to leapfrog competition in the industry.

The analysis yielded future product scenarios thatallowed for the prophetic filing of provisional patents,a term used to refer to a patent that describes a con-cept that has not yet been reduced to practice.Early-stage patents were filed on the basis of the TRIZresults. In consequence, R&D investments could, withincreased certainty, be focused on the new areasuncovered with the aim of subsequently reducingthem to practice. Final (true) patents were filed a yearor more later.

What these companies had achieved using TRIZdirected evolution was a patent wall that affordedthem legal protection and a strong position fromwhich to capture growth during the next phase ofdevelopment of the technology. In effect, competitorswere frozen out of the market. “We achieved substan-tial incremental market share”, claims David Bonnerwho, as a result of these positive experiences, decidedto leave the world of corporate America to join theTRIZ startup, Ideation International. Whilst rare,Bonner’s experience is echoed by others.

Some advocates position TRIZ as ‘high speed R&D’,generating ideas at least 20 times faster than normalR&D groups. Can all the ideas generated be patented?Clearly not, but no doubt some companies will try.Patent fences will not be published as a trap for com-petitors. Broader ideas, meanwhile, on which thepublished concepts depend, could be pushed throughthe patent process. One TRIZ user quipped, “even ifwe don’t get market share, we’re going to pick up onroyalties”. Technology forecasting can help organisa-tions control the competition.

Intellectual Property Business International (IPBI), aspin off of Ideation International, specialises in pro-viding asset growth solutions to intellectual propertymanagement departments. Their services include theapplication of proprietary, and patented, computer-assisted processes for the evaluation, opinionformation, and forecasting of inventions and patents.They believe their methods can have a major impacton increasing the value of an IP portfolio. Using TRIZdirected evolution (DE) and anticipatory failuredetermination (AFD), IPBI predicts the likely evolu-tionary development of technologies, quantifiesstrengths and weaknesses in patents through propri-etary deconstruction techniques, and formulatesstrategies to assure optimum value from IP. The com-pany claims to be able to quantitatively assess thelogical correctness of patents, discover additional

innovations that lie dormant in technologies taughtby patents, and provide highly credible expectationsof the future evolution of patented technologies.

The claims of IPBI and other TRIZ advocates are ambi-tious. No amount of dispassionate desk-bound study islikely to uncover the extent of the power of TRIZ. TRIZrequires full-on engagement applied to a concrete prob-lem area if sceptics are to gain insight as to its validity. IfTRIZ can be used to expand intellectual property anddo so comprehensively, cost-effectively and in com-merce-time, it can safely be predicted that Altshuller’slegacy, and its modern variants, will be adopted as apermanent feature of corporate innovation practice.

CREATIVITY REALLY MAY GROWON TRIZThere is a commonly held, but fundamentally flawed,view of research and development: that innovation isjust a matter of engineering improvements in prod-ucts and the application of a new technology – nutsand bolts. Invention and creativity have never been thesole preserve of scientists and engineers. On the otherhand, if the experience of IDEO’s domain experts,insiders at the R&D labs of major corporations andthe TRIZ community are anything to go by, it may bethe PhD-qualified scientists and engineers, and not thebusiness generalists and management consultants,who have opened the innovation-kimono, so that allcan now learn to innovate.

Can systematic and scientific methods of innovation,such as TRIZ, be applied more widely and within typ-ical business processes? According to David Levy,whose portfolio includes work on the functional lay-out of the Apple PowerBook, “TRIZ is tremendous”.Although he does not use TRIZ formally, Levy wasquoted in Salon.com as saying that his practices “nat-urally echo those found in the discipline”. “The mostexciting part about TRIZ is, it’s not limited to how tomake a widget”, says Levy. Illustrating how TRIZ canbe used at many levels, from daily thinking to deepengineering, he observes correctly that “It’s how toapproach problem solving, it’s how to approach rela-tionships, and it’s how to approach societal problems.It’s really how to be creative and to observe the worldand solve problems”.

Many observe an extreme degree of generality inTRIZ. Perhaps this is not so surprising. The world-wide patent base now covers far more thanengineering solutions and some believe its content,including the scientific and engineering content, to bea broad reflection of the commercial activity that gen-erated the economic need to file for legal protection.So while TRIZ originated in engineering, the TRIZknowledge base is expanding, and with it, the applica-tions of TRIZ.

David Bonner tells the story of how TRIZ was usedto entirely redesign his technical research and devel-opment Organisation and the processes by which itinteracted with other business functions. Using TRIZhe resolved a fundamental contradiction in the R&Dprocess: senior management want enhanced innova-tion and new product generation, yet business unitsare rarely willing to pay for it. It’s a common prob-lem, plaguing even those companies with excellentinnovation credentials. At the MIT EmergingTechnologies Symposium in 2003, Jeff Immelt wasquoted as saying that “If I were to give you a chapterof my business book, it would be called, ‘Two MillionDollars from Greatness.’ I can’t tell you how manyGE leaders give me the excuse, ‘I could fund newinnovations but I can’t afford it. I can’t fit it into mybudget.’ These are from leaders that have a billiondollar base cost budget”.

TRIZ has also been inserted into other businessprocesses. It has been used to enhance stage-gateprocesses, which aim to reduce expenditure on unvi-able product concepts, for example, anticipatingconsumer safety issues. Cross-organisational decision-making, detailed investigations and coordination withexternal regulators and advisors mean the requiredprocedures are typically cumbersome and slow.Bonner claims that TRIZ has proved useful at severalpoints in the stage-gate process by de-bottleneckingdecision making. A benchmark at Rohm and Haas,taken across 12 projects, demonstrated a cycle timereduction of 30 per cent to commercialisation and avastly increased idea flow. Process redesign, usingcodified inventive methods, may be the next frontierfor the corporate world.


THE BROADENING AGENDA TORENOVATE INNOVATIONThe potential for a reliable and general-purpose inno-vation methodology has never been greater. ErkkiLiikanen, EU Commissioner for enterprise and theinformation society, wrote recently that “Innovationis... a multi-dimensional concept, which goes beyondtechnological innovation to encompass... new meansof distribution, marketing or design. Innovation isthus not only limited to high tech sectors of the econ-omy, but is rather an omnipresent driver for growth”.Recognising this, companies will not define innova-tion as owned by one part of the Organisation orapplying only to those working in leading-edge R&D.Rather, they will pursue innovation as a broad busi-ness-led approach furthering commercial goals.

Every aspect of how an Organisation operates is subject to innovation – administrative innovations,marketing innovations, financial innovations, designinnovations, manufacturing innovations, service con-cept innovations and human resource managementinnovations. These process innovations are nothingless than the re-engineering mantra of the early 90s.Today, those creative process redesign concepts havebeen given new life and a new path to execution inthe form of business process management (BPM) sys-tems; IT tools that bring work processes to life in theenterprise.

In the 1960s, manufacturing and distribution werethe dominant activities in many large firms.Marketing and management, product and businessdevelopment, research and systems development,together accounted for just 30 per cent of the firm’sactivities. Over the following three decades, the

percentage of those knowledge-based activitiesincreased. Today, the per centage is approximately 75per cent of what a firm does. That is to say, 75 percent of us work with processes or in processes, direct-ly or indirectly, and knowledge worker costs are morethan 50 per cent of all corporate costs.

Knowledge workers spend a sizable proportion of eachworking day using electronic tools, including e-mail,word processing, spreadsheets, and databases. But theprocess tools available to most knowledge workers arelacking. It’s obvious to even the casual observer thatthere is a glaring need for process tools if companiesare to take the next step in productivity. For manyfirms, particularly in the service sectors, professionalservices and in industries in which complex productsrequire a high-touch interface with the customer, suchas aerospace and IT solutions, process improvement isan inherent part of the innovation programme.

Customers ask companies to innovate, create, design,deliver, integrate, maintain, optimise and improve. Yetto do these things, the knowledge worker has to man-age processes back inside the company: coordinating,negotiating, collaborating, planning, delegating, mon-itoring, approving and evaluating – all forms ofprocess-related work that involves many participants.The customer asked for 25 per cent of our work, andonly expects to pay for 25 per cent of it. That is, thecustomer wants to pay for the innovative products orservices, not the 75 per cent that is the underlyingprocess-related work. For many firms, the eradicationof the underlying non-value-adding tasks associatedwith customer-facing processes is where investmentin innovation is crucial. For example, a Europeanfinancial services firm used process tools from ActionTechnologies to increase the productivity of relation-


Table 5: Nine factors point to a belief in TRIZ as an effective and transformational methodology

1.TRIZ is general purpose.

2.TRIZ generates exhaustive and comprehensive solution scenarios.

3.TRIZ is grounded in a reliable body of knowledge, the growing patent base.

4.TRIZ generated scenarios bypass both the psychological inertia of team members and their paradigm-bound experiences.

5.TRIZ can be inserted into other processes.

6.TRIZ reduces the resources required to generate a solution set.

7.TRIZ is rapid, relative to other methods.

8.TRIZ can be taught, and applied, at any level of education, from school children, to management consultants, to PhD scientists.

9.TRIZ helps people migrate their problem-solving skills from one domain to another, even into areas that would otherwiserequire them to study for years in order to gain expertise.

ship managers serving high-net-worth individuals,while simultaneously reducing the number of staff inthe business unit, allowing them to be reassigned toother departments and to new products and services.A total of 1,720 employees were reassigned. Before theprocess innovation, there were 1,800 relationshipmanagers, 1,000 assistants and 350 mid-office experts.After the innovation there were 1,150 relationshipmanagers (doing twice as much work by maintainingrelationships with twice the number of customers),no assistants (most administrative tasks were auto-mated) and 280 mid-office experts.

It has been said about processes that they are, “Whatworks around here”. Processes are unique in anyOrganisation, and process improvement managersseek unique solutions to the very specific businessissues they face. Examples include reductions inelapsed cycle time, higher productivity per person,improved quality, reduced errors, higher employeesatisfaction, coordination across departments/geogra-phies, automation of administrative tasks, reducedcost per transactions, enabling external users access tointernal processes, improved regulatory/legal compli-ance, flexibility/business agility or customisation atthe customer interface.

Processes come in all shapes and sizes, and processtools provide business people with computer-assistedsupport for the processes they manage or fulfil.Process tools can automate, inform, accelerate,sequence, track, distribute, parallel up, analyse, inte-grate, capture, disseminate, instruct, compute,process, correlate, direct, sense, respond, monitor,predict, secure, delegate, record, expose, measure,agree, follow up, promote and illuminate. Such toolsare Swiss Army Knives for process improvements,and, as well as improving processes such as humanresources, procurement, logistics, operations, sales,marketing and service, they can be applied to defineand execute processes in the operating system forinnovation. Examples might be: new idea assessment,research and collaboration, patent filing, project exe-cution, new product development/ introduction,

stage-gate, licensing and contract life cycle. Theseprocesses are fragments of the overarching objective,new revenues. Bill Welty, CEO of ActionTechnologies, says, “Turning ideas into new profitsrequires the management of end-to-end processes.Specific innovation processes can stand alone, butwhen people’s work within the whole chain is coordi-nated, speed, productivity and quality alldramatically improve”.

While process improvement efforts go under manynames – industrial engineering, ISO certification, SixSigma, Sarbanes Oxley, enterprise business architec-ture (EBA), business process re-engineering (BPR),Audit and Compliance, Rummler-Brache, IntegratedDefinition Function Modelling (IDFM) and LeanThinking, to name a few – it’s all process work under-neath. Thus, multi-purpose process tools aredesirable, for all process work is connected. Processtools now available can unleash the creative improve-ment potential in everyone.

INNOVATION FUSES METHODOLOGY VALIDATED AT THE CUSTOMER INTERFACEHistorically, innovation has been embedded inorganisational structure as the responsibility ofthe R&D department, focused almost exclusively onthe development of technology in supply-drivenmarkets. What is now required, however, is a businessprocess focused on innovation, rather than a businessstructure focused on R&D. Critical to success is theselection of appropriate targets in which to innovate.

Recognising that innovation touches many processes,innovation strategy firm Doblin has mapped the business domains in which they believe the greatestbenefits lie, across sectors, in business models, valuenetworks, enabling and core processes, product performance, systems and service, channel, brand and customer experience.


Table 6: Unique processes, subject to improvement

Handling of insurance claims in cases of disaster; Maintenance of health records as individuals interact with myriad health services;Finding lost parcels across a logistics supply chain;Tracking the support process using trouble tickets; Managing the goals associatedwith projects; Organising emergency response during a severe incident; Clarifying, negotiating, agreeing to and tracking work associ-ated with service requests; Processing procurement orders in complex industries; Initiating and progressing a management-ledinitiative; Implementing farm animal certification and the associated tags; Equipping customers to provision and configure their ownservices; Employee on-boarding; Publishing books on demand; Managing change, and change requests, across a multi-tier suppliernetwork; Executing a public health campaign; Sharing information to create a case file in criminal investigations; Issuing of land per-mits in high growth-rate cities.


Doblin’s inspiration is from a Pareto analysis thatrecognises that less then 2 per cent of innovationprojects generate more than 90 per cent of the value.Using metrics that cut across industry innovation pat-terns, organisational capability analysis, partner linksand corporate performance assessments, Doblin per-sonnel claim that they are able to measure the impactof innovation in different areas of the business.Exploiting data gathered from leading firms in differ-ent vertical industries, Doblin showed wherecompanies have innovated in the past, which helpsguide decisions for future innovation investmentemphasis. For example, in passenger air travel overthe period 1988 to 1998, innovation was consistentlyfocused on enabling processes, customer service andchannel distribution. In pharmaceuticals, by contrast,investment concentrated upon enhancing productperformance, but may soon shift to other areas.Corporate innovation practice is quickly moving tointegrate this kind of analysis.

Using best practices, such as the Fourth GenerationR&D model of William Miller and Langdon Morris,companies like 3M develop a definition of the nextgeneration of their technology platforms. These plat-forms, once realised and reduced to practice, form thespringboard for the reliable development of numer-ous new products and services. They represent adescription of the architecture of the industry, mar-kets, competitors, products, services and processes:the context within which innovation can occur.

Failure to develop such a platform description, whichapplies equally to service firms dependent on infra-structure and to product firms dependent ontechnology patents, often leads to a large-scale failure.One such failure occurred at GM at the end of the1980s when new robots worth $500 million had to bescrapped because their rigid design was inadequate tocompete with the more flexible manufacturing sys-tems of the Japanese. As William Miller and LangdonMorris observe, “nearly every field has some form ofarchitecture at its highest level of abstraction, includ-ing law, medicine, physics, engineering, andbusiness... Defining an architecture requires study andobservation, for inevitably some parts of the systemare readily evident, whereas others remain hiddenfrom all but the most studious”.

It is now commonplace for companies to drawdetailed maps of the past generations of their prod-ucts and services in terms of the constituent

technologies and processes. For example, 3M’s “Non-wovens” map, covering the period 1950 to 2000,shows the complexity and richness evident within themyriad products they sell today under the broad cate-gories of Tape Backings, Low Density Abrasives,Medical Products, Insulations and Filters. The mapillustrates the evolution of 3M’s current product port-folio from its roots in the Decorative Ribbons andScotch Brite Pads of the 1950s.

The success or otherwise of a new technology plat-form, the springboard for all new products andservices, depends upon an understanding of the mar-kets within which the platform will compete. Hereinlies the value of modern TRIZ. By positioning a tech-nology platform on, literally, hundreds of lines oftechnological evolution, many paths to future valuecan be foreseen and evaluated. Although a minorexample, a global consumer products company usedthis technique to evaluate TRIZ. In a matter of weeksthey identified numerous candidate designs for a newrange of cleaning products. Once such future possibil-ities are revealed, the strategy frameworks ofmanagement consultants such as Christensen orDoblin can be used to evaluate market impact.

Techniques that fuse industry maps, TRIZ and marketanalysis may represent the next frontier in corporateinnovation, but few firms will rely only on models andsome may never attempt such an analysis. There arealso other, less theoretical methods, available to inno-vators. By identifying stakeholder requirementsthroughout the current and future anticipated valuechains, innovation can be targeted. Mutually depend-ent learning involving all relevant groups, includingR&D, suppliers, and customers, plus distribution part-ners and other internal functional departments such asmarketing, manufacturing and finance, can be veryeffective.

Many companies work with lead users, believing thatthe customer will guide them towards those innova-tions that customers will value most. In someindustries, 50 per cent of all innovations are sparkedby customer need, and the lead customer is pivotal toproviding a solution. The idea that only employees ofthe producer can solve innovation problems isdefunct. While the producer has core competence inthe technology, the technology itself is often not thedriver of value; the driver comes rather from how thetechnology is used.

Clearly, no single department, including R&D, has thefull knowledge needed to carry out the responsibilityfor innovation. Internal and external stakeholderslearn together through iteration in design and testing.Each gains the understanding of capabilities that willsatisfy existing needs and many believe that theapproach stands the best chance of uncovering latent,unmet needs among existing and potential customersand in markets that do not presently exist. FumioKodama, author of Analysing Japanese HighTechnologies: The Techno-Paradigm Shift, calls thisform of innovation forecasting, “demand articulation”.

THE INNOVATOR IS AN OBSESSIVE PROBLEM SOLVERAs globalisation advances and companies see feweropportunities for growth, the clamour for inventionand innovation – proxies for “economic value” – willrise inexorably. Innovation poster-child GErevamped a 23 year old slogan, “We bring goodthings to life”, and replaced it with, “Imagination atwork”. GE include a creative drawing tool on theirweb home page. By contrast, FedEx are almost dull.Their core competence in logistics implies supply-chain efficiency and reliability. Those qualities definethe FedEx ‘identity’ business process.

Is FedEx less innovative than GE? Not necessarily.What do GE and FedEx have in common? Both areobsessive problem solvers.

Companies do more than perfect the known and opti-mise for efficiency. Glib use of the terms ‘creativity’ or‘innovation’ means little if relevant problems are notbeing solved. Innovative firms develop an ability tosolve problems that remove barriers to greater eco-nomic value. Whether an engineer is figuring out whyan industrial process won’t start, or a call centre oper-ator is redesigning support processes to avoidanswering similar problems over and over again, bothare solving problems and each requires methodologyand in-context expertise. At the macro level, numerouselements are involved: a learning environment, cre-ative thinking tools, design flair, engineering skill,scientific method, enabling work practices, anamenable culture, specific organisational structures,supportive management frameworks, numerous busi-ness processes, information systems, market strategy,inventive and predictive algorithms. At the micro levelit comes down to the individual employees, their tal-ent, qualifications and knowledge.

Being talent-limited, every company finds innovationhard to do, but not because employees don’t havebright ideas, or that new concepts are impossible todevelop. The world is awash with creativity and tech-nological breakthroughs. Rather, in the idea-to-cashprocess, there are myriad obstacles that hinder theinnovator, right across the value chain and coveringevery conceivable business and technical discipline.

No Organisation can be world-class in everything.Companies focus on their customers and allow special-ists to contribute. In innovation, as in procurement,companies have a duty to shareholders to take steps tostrengthen their capabilities. Paradoxical as it mayseem, the success of IDEO demonstrates that innova-tion can be sourced, like other raw materials. Everysupplier or business partner should innovate in itsofferings. Yet while external experts can solve manyproblems in an Organisation’s core competence, prob-lem solving is everyone’s problem.

It is no longer appropriate to speak of discontinuous(radical, disruptive) innovation and continuous(incremental) innovation. To do so implies than onecomes out of thin-air and the other has less value.Disruptive innovation is an oxymoron. Innovation isalways continuous, a never-ending sequence of prob-lems to be solved. Unless individuals, teams orcompanies are solving problems, they are not innova-tive and they are not innovating. The solution, notthe invention, is what allows all processes to progress.Innovation is a systematic and systemic search, sup-ported by predictable and scientific methods, toreach solutions beyond the current state-of-the-art inan industry. Along the way, the solutions reached orthe inventions discovered are the activities that gen-erate value for customers.

As Altshuller has demonstrated, solutions to contra-dictions exist at five levels (see table 3, page 20). Someare apparent or conventional. Some are small inven-tions inside an existing paradigm. Others aresubstantial inventions, within the current technologyplatform, or based on new science. Some are new dis-coveries. Like the modern production line, to stand asa valuable innovation any new product or servicemust be sufficiently robust, in terms of its constituentinventions, to progress efficiently through the end-to-end commercialisation process and into the hands ofcustomers. Innovation is the aggregate of problemssolved in any situation.



The idea-to-cash process is complex, so complex infact that it requires the contribution of all employeesand those of suppliers, partners and distributorsacross all of the business processes involved, to besuccessful. Just as the ambitious CEO gathers an ableCxO team, organisations seek relationships withsmart, problem-solving partners. The extent of thevalue generated by innovation, and the value placedon the solutions a business partner is able to provide,depend only upon whether the innovator is solvinginventive problems that, in aggregate, createproduct/service improvements (incremental or newgeneration) aligned to the needs of the customer’scustomers. In this endeavour, the most effective inno-vators will employ methods that lie beyond theconventional and apparent, and will no doubt looktowards numerous systematic methods for help,including TRIZ.

John Hamilton of Computer Sciences Corporationobserves that “The very brightest employees canalways solve problems. Yet the majority of employeesare often out of their depth given the complexity oftoday’s business environment. Rather than enablingthe brightest to shine even more brightly, can weenhance the problem solving capabilities of themajority? If so, we can unleash the value that thosewho are not used to innovating can contribute”.

Can innovation be taught? GE believes so. The SixSigma leader is a leading advocate of Design for SixSigma, which often includes TRIZ. Campus-baseddevelopment courses for upcoming leaders includespecific innovation training. GE also recognises thecentral role of domain experience. Over the past fewyears the firm has made engineers and scientists moreimportant. In 2000, of the 175 top officers in thecompany, only seven were engineering leaders, anumber that had been flat for roughly ten years. Overthree years, GE tripled the number of technologyleaders who became company officers.

If a business partner claims they can help you inno-vate, do not ask them whether they know about yourindustry; rather, ask them whether they have problemsolving methods that can be transferred to yourindustry. Then ask them to demonstrate the efficiencyof those solutions in the business processes acrossyour value-network, from concept inception, throughdevelopment, commercialisation and to businesscoming in as a result.

Perhaps it is no longer appropriate to speak aboutmature companies and commoditised markets, onlytired ones full of inertia; organisations that have givenup on solving problems. By focusing upon thespecifics of innovation, and avoiding the seductivetrap of a belief in empty innovation chic or market-ing-led renovations, companies will be able to turnstale, risk-obsessed cultures into proactive idea anddream factories that can compete on imagination,inspiration, ingenuity and initiative. The race is on tofind the path of least resistance to new value.

Systematic methods are no silver bullet, and advo-cates must avoid adopting a cultish view of them asThe Solution, but as TRIZ founder GenrichAltshuller once said, “We have to teach creativity,and that requires science”.

The author thanks Zion Bar-El and David Bonner of Ideation International, for their insights into the development of modern TRIZ methodology.

POSTSCRIPT: INNOVATION ANDTHE CIO ORGANISATIONSome CIOs today may feel that they are being sidelined in corporate innovation. While they arebeing asked to do little more than reduce IT costsand focus on network security risks, there is evidencethat the CIO has no less a role in core innovationthan any other member of the CxO team. CIOs cancontribute to the operating system for innovation farbeyond their role in managing the IT infrastructure,by deploying software applications that support ideamanagement, inventive problem solving and theautomation of systematic innovation processes.However, such ideas do not capture the full role ofthe CIO in respect of innovation.

Craig Barrett, CEO at Intel, says that “economiestoday are measured in terms of the intellectual con-tent embedded in the products and services they sell”.IT is integral to projects and services and to the valuechain processes that create them and deliver them tocustomers. The use of IT in business processes is notonly mandatory in many industries, but also reducesboth the resources required and the time taken to dis-cover, design, deploy, operate, analyse and optimiseprocesses. Products and services are the by-productsof processes. In some industries the process is theproduct or service. IT has become the primary meansof enabling process innovations. Hence, the field ofBusiness Process Management (BPM) and its associ-ated methods and tools are powerful enablers ofprocess innovations.

David Moschella, global research director of CSC’sResearch & Advisory Services, in a report entitled“The Future Role of the CIO: Commodity IT Officeror Career In Overdrive”, observes that “In additionto IT’s traditional functional role, the skills pos-sessed by IT people add value to an Organisationbeyond just implementing new technologies. IT peo-ple excel at abstract systems thinking as well asthinking through key business processes. IT’s opin-ion in organisational decisions is meaningful as IT iscredible due to its neutrality in many internaldebates. Also, because IT is so embedded in linkingand supporting functions within an Organisation, itprovides a critical bridge between functions”. And itis often the case that IT people understand the end-to-end business processes of an Organisation ingreater depth and clarity than many in the businessfunctions, simply because they are required toimplement those processes in support systems.

George Lieberman, the former head of TechnologyStrategy and Planning for Merrill Lynch is quoted inOptimise magazine as saying that “I wish TRIZ hadbeen available when I was trying to make technology-related IT decisions. Most of the problems we nowsolve using the TRIZ methodology involve complexengineering systems, where a system’s fundamentalproblem is often masked by symptomatic factors”.Lieberman learnt about TRIZ during a brief spell asCEO at innovation consulting firm, Gen3 Partners.



APPENDIX A: INNOVATION RESOURCESAction Technologies, www.actiontech.com, Process improvement tools

American Supplier Institute, www.asiusa.com, Design for Six Sigma and The Taguchi Method

Altshuller Institute for TRIZ Studies, http://www.aitriz.org/, Furthering the worldwide appreciation of TRIZ

Baruch Lev, pages.stern.nyu.edu/~blev/, Intangibles, Intellectual Property & Patents: Management,Measurement and Reporting

Creax, www.creax.com, Innovation Software, mainly classical TRIZ

Doblin, www.doblin.com, Innovation Strategy Consulting

Edward De Bono, www.edwdebono.com, Lateral Thinking Methods

Eliyahu Goldratt, www.goldratt.com, Theory of Constraints and Critical Chain Methods, author of thebusiness novels The Goal and Critical Chain

Ideation International, www.ideationtriz.com, Modern TRIZ and its applications, Inventive ProblemSolving, Directed EvolutionTM and Anticipatory Failure DeterminationTM, also software for problem formulation, situation decomposition and exhaustive generation of solution directions

IDEO, www.ideo.com, Design Innovation, Domain Expertise

Imaginatik, www.imaginatik.com, Idea Management Processes and Solutions, founder Mark Turrell

InnoCentive, www.innocentive.com, R&D Freelancer Community and Brokerage

Innosight, www.innosight.com, Market Strategy and Innovation Consulting, founded by ClaytonChristensen, author of The Innovator’s Dilemma, The Innovator’s Solution and Seeing What’s Next

Invention Machine, www.invention-machine.com, Innovation Software, patent search

Intellectual Property Business International, www.ipbizint.com, Patent Analysis, Deconstruction andEvolution, IP Portfolio Analysis, Litigation Support

Quality Function Deployment Institute, www.qfdi.org

Min Basadur, www.basadur.com, Creativity Method

Strategos, www.strategos.com, Innovation and Strategy Consulting, founded by Gary Hamel,author of Leading The Revolution

Synectics, www.synecticsworld.com, Creativity Consulting


APPENDIX B: AN INNOVATION READING LISTBarney, Matt and McCarty Tom, The New Six Sigma – A Leader’s Guide to Achieving Rapid BusinessImprovement and Sustainable Results, Motorola University and Pearson Education, 2003

de Bono, Edward, Six Thinking Hats, Penguin Books, 1999

Carayol, Rene and Firth, David, Corporate Voodoo – Principles for Business Mavericks and Magicians,Capstone, 2001

Chesbrough, Henry, Open Innovation – The New Imperative for Creating and Profiting from Technology,HBS Press, 2003

Chowdhury, Subir, Design For Six Sigma – The Revolutionary Process for Achieving Extraordinary Profits,FT Prentice Hall, 2003

Chowdhury, Subir, The Power Of Design For Six Sigma, Dearborn Trade Publishing, 2003

Christensen, Clayton, Scott D., Anthony, Roth A., Erik, Seeing What’s Next – Using the Theories of Innovation to Predict Industry Change, HBS Press, 2004

Christensen, Clayton M., The Innovator’s Solution – Creating and Sustaining Successful Growth,HBS Press, 2003

Davenport H., Thomas, Process Innovation – Re-engineering Work through Information Technology,HBS Press, 1993

Goldratt, Eliyahu M. and Cox, Jeff, The Goal (3rd ed.), North River Press, 2004

Goldratt, Eliyahu M., Critical Chain – A Business Novel, The North River Press, 1997

Graham, Douglas and Bachmann, Thomas T., Ideation – The Birth and Death of Ideas, Wiley, 2004

Haour, George, Resolving the Innovation Paradox – Enhancing Growth in Technology Companies,Palgrave Macmillan, 2004

Hargagon, Andrew, How Breakthroughs Happen – The Surprising Truth About How Companies Innovate,HBS Press, 2003

Harvard Business Review on Innovation, HBS Press, 2001

Hippel, Eric, The Sources of Innovation, Oxford University Press, 1988

Jones, Tim, Innovating At The Edge – How Organisations Evolve and Embed Innovation Capability,Butterworth Heinemann, 2002

Jaffe, Adam and Lerner, Josh, Innovation and Its Discontents: How Our Broken Patent System is EndangeringInnovation and Progress, and What to Do About It, Princeton University Press, 2004

Kaplan S., Robert, Norton P., David, Strategy Maps – Converting Intangible Assets Into Tangible Outcomes,HBS Press, 2004

Kelley, Tom and Littman, Jonathan, The Art of Innovation – Lessons in Creativity from IDEO, America’sLeading Design Firm, Profile Books, 2004

Managing Creativity and Innovation, Harvard Business Essentials, HBS Press, 2003

McConnell, Carmel, Change Activist – Make Big Things Happen Fast, Pearson Education, 2003

Miller, William L. and Morris, Langdon, Fourth Generation R&D – Managing Knowledge, Technology and Innovation, Wiley, 1999

APPENDIX B: AN INNOVATION READING LIST (continued)Myerson, Jeremy, IDEO: Masters of Innovation, Lawrence King Publishing, 2001

Nalebuff, Barry and Ayres, Ian, Why Not? – How to Use Everyday Ingenuity to Solve Problems Big and Small,HBS Press, 2003

Ridderstråle, Jonas and Nordström, Kjelle, Funky Business – Talent Makes Capital Dance, PearsonEducation Limited, 2002

Rogers, Everett, Diffusion of Innovations (5th ed.), Free Press, 2003

Schrage, Michael, Serious Play – How the World’s Best Companies Simulate to Innovate, HBS Press, 2000

Senge, Peter et al, The Dance of Change – The Challenges to Sustaining Momentum in LearningOrganisations, Currency Doubleday, 1999

Senge Peter, The Fifth Discipline – The Art & Practice of the Learning Organisation, Randomhouse, 1990

Smith, Howard and Fingar, Peter, Business Process Management: The Third Wave, MK Press, 2003

Smith, Howard and Fingar, Peter, IT Doesn’t Matter – Business Processes Do, MK Press, 2003

Thomke H. Stefan, Experimentation Matters – Unlocking the Potential of New Technologies for Innovation,HBS Press, 2003

Utterback, James M., Mastering the Dynamics of Innovation, HBS Press, 1994

Zyman, Sergio with Brott, Armin A., Renovate Before You Innovate – Why Doing the New Thing may not bethe Right Thing, Portfolio, 2004


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