A few weeks ago I received “Innovation Tournaments” by Christian Terwiesch and Karl T. Ulrich in the mail. “Innovation Tournaments” is a relatively short, easy, and pleasant read. This book is definitely one of my favorite innovation books to date as it covers concepts clearly and in an accessible way. Wharton professors Terwiesch and Ulrich have chosen to focus their innovation book on creating and selecting exceptional opportunities.
Because all companies can create lots of ideas when they engage their employees, suppliers, partners, and even customers in the idea generation process, the real differentiation comes from creating processes for sourcing and selecting those ideas that are truly exceptional and having the courage not to back those that are only merely good.
Professors Terwiesch and Ulrich start off by defining innovation as a new match between a need and a solution.
One of the key concepts that they cover in this book is the ‘innovation return curve’, which graphically represents the expected profits from a set of innovation investments. Creating an innovation return curve helps you to identify exceptional opportunities, and after all – exceptional opportunities drive exceptional value. The overall concept of the book is that by evaluating ideas in a series of ’rounds’ or ‘filters’, that you increase your chances at having only the exceptional ideas make it through to the other end.
The book discusses tools and techniques for generating opportunities, opportunity selection, strategy alignment, and opportunity analysis. In addition the book covers innovation portfolio management, interdependencies and risk management, governance, and administration.
One of the major tenants of the authors when it comes to innovation is that uncovering exceptional opportunities is more likely when your process exhibits greater variability (it actually displays less consistent output quality).
Techniques for stimulating opportunity generation include:
- Alternative approaches to existing innovations
- Follow a personal passion
- Annoyance-driven innovation
- De-commoditize a commodity
- Drive an innovation down-market
- Trend-driven innovation
- Attribute-based innovation
- Functional decomposition
The book also introduces a nice and simple visual tool for sorting opportunities into strategic buckets based on their level of technological uncertainty and market uncertainty:
A large part of the book is dedicated to financial management and risk management as it applies to innovation, and while interesting to read, is hard to summarize here.
And finally the book closes with an interesting innovation maturity model, which is summarized in a simple way by the chart I have created here:
Overall, I found the work of professors Terwiesch and Ulrich to be well worth the investment of time and money.
My interview with “Innovation Tournaments” co-author Christian Terwiesch can be found here.
Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is the creator of the Nine Innovation Roles Group Diagnostic Tool and author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.