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The Conference Board Review® Article
The Capacity to Innovate
By Michael Schrage
Michael Schrage is a research fellow at the MIT Sloan School's Center for Digital Business and a senior adviser to MIT's Security Studies Program. His last article was "The Future of Advice," the March/April cover story.
The New Age of Innovation
Driving Co-Created Value Through Global Networks
By C.K. Prahalad and M.S. Krishnan
McGraw-Hill, $29.95
Ever hear a superb thinker whose compulsive verbal tics — umm, you know what I mean? You know what I mean? — nearly overshadow and undermine the brilliance of the message? That's the annoying awkwardness I?felt reading C.K. Prahalad's and M.S. Krishnan's otherwise-excellent The New Age of Innovation.
Here's a book with enormously useful insights for developing enterprise "innovation architectures" that's seriously wounded by its authors' relentless rhetorical redundancies.
N=1. R=G. Got that? "N=1" is Prahalad/Krishnan-speak for a world in which companies co-create value with individual customers. "R=G" means that enterprise access to resources is increasingly multi-vendor and global. According to the authors, these two equations describe their book's intellectual "pillars" and thus festoon every other page. The book and its readers would have been far better off if N=1 and R=G had been politely introduced and then swiftly ushered away instead of being treated as innovation's E=mc squareds. You know what I mean?
Don't let the tics get in the way. New Age deserves respect and careful rereading because it creatively synthesizes the key issues and approaches that top management must consider when investing in innovation. There is blissfully little cant about "out-of-the-box thinking" and "creativity" in favor of revisiting fundamental challenges of how firms should organize themselves around value creation for and with customers. In fact, this is a text less about "innovation" than about how organizations can and should cost-effectively create a capacity to innovate.
Does this "capacity building" emphasis recall Prahalad's earlier — and bestselling — work with Gary Hamel on "core competence" and strategic competition? Of course. But what sets this particular collaboration apart is its rigorous championing of digital technologies as the essential partner and platform for value creation and its obsessive focus on process design, process architectures, and process innovation as the ultimate innovation "core competence." This book — far better than the now-remaindered Internet Bubble publications on brave new virtual business worlds — makes the core case that IT completely transforms the economics of innovation. It effectively mocks while ultimately demolishing the Harvard Business Review's provocative IT-doesn't-matter hypothesis. The future of innovation is intimately and inextricably contingent upon the future of digital technologies.
Comments? Write a letter to the editor.
Return to the July/August 2008 The Conference Board Review® issue.
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