CHG Book Review By Suzanne Dewey, CHG Associate Making Innovation Work – How to Manage It, Measure It, and Profit from It Epstein, Shelton and Davila © 2005, Wharton School Publishing

More and more, successful organizations are pushing past routine standards and counting innovation as one of their most strategic tools. But how does innovation happen? In their new book, Making Innovation Work: How to Manage It, Measure It, and Profit from It, authors Mark Epstein, Robert Shelton and Tony Davila provide a treatise on how to manage, measure, and even execute, the process of innovation.

The book provides three premises about developing an innovative culture:

• Innovation is a management process and not a mysterious happening.
• There must be incentives and measurement devices developed to reinforce the innovation process.
• Organizations can and should use innovation to help alter their industry.

The authors point out that there is no one “silver bullet for innovation,” but their research and experience indicates that there are definitive ways in which organizations can create value by developing an innovation process.

The book specifically identifies what organizations should do to become more innovative and to also improve the performance of innovation. Epstein and Davila are academics teaching at Stanford and Harvard; Shelton is a managing director of Navigant Consulting's Innovation practice. Their book is a result of years of research, as well as their own extensive experience working on innovation and an analysis of the academic and practical literature on the topic.

The authors’ research has enabled them to create a meaningful list of the most important aspects of innovation undertaken by senior leadership. They consider these the Seven Innovation Rules and spend considerable time exploring each rule:

1. Exert strong leadership, providing clear direction and recognition on the innovation strategy.
2. Incorporate innovation into basic operations.
3. Align the amount and type of innovation to the organization’s strategy.
4. Manage the tension between creativity and value capture.
5. Neutralize organizational antibodies.
6. Recognize the fundamental building block of innovation is actually a network of people and knowledge inside and outside of the organization.
7. Create the right metrics and rewards for innovation.

Making Innovation Work pushes the CEO to thoroughly examine the organization and assess the innovation inputs, processes, outputs, and outcomes needed to meet business objectives. Once these categories are established, the reader must define the measures that make the most sense for the organization. With the system is in place, creativity, value capture and overall business strategy follow suit. The book presents a convincing argument that innovation must start at a fundamental level.

As a process, the text reinforces the notion that innovation starts with creativity (idea generation, prototyping, experimentation and idea selection), but that it needs to end with value capture by encompassing project management, market planning and program development. Organizations have to include both parts of the spectrum for long-term innovation success.

The book is populated with mini case studies and quotes to reinforce points made. The reader can also take advantage of the various tables and diagrams that help define the process. Making Innovation Work is an informing and good read.

Suzanne Dewey is an associate with Corporate Health Group, a national healthcare consulting firm, and is based in Massachusetts. For additional information, please call 1-888-334-2500 or contact us via the Web.

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