Sunday, October 15, 2017

Book Review: Corporate Innovation in the Fifth Era: Lessons from Alphabet/Google, Amazon, Apple, Facebook and Microsoft


Book review written by Phil Marks

This paper reviews:
Le Merle, M.C. & Davis, A. (2107). Corporate Innovation in the Fifth Era: Lessons from Alphabet/Google, Amazon, Apple, Facebook and Microsoft. Corte Madera, CA.  Cartwright Publishing.  ISBN: 978-0-9861613-8-4

Change creates business winners and losers.

Corporate Innovation in the Fifth Era functions on the premise that we are living in a “dramatic transition between the Industrial Era and a new Fifth Era being driven by the Digital Revolution, Biotechnology Revolution, and a host of other disruptive technologies…that will transform the way humans exist on the planet.”  Only those business leaders who capitalize on the disruptive changes will be winners in the Fifth Era.    

Written in a straightforward and pragmatic style, full of the authors’ personal experiences, and data-driven, the book is sure to resonate with business leaders trying to improve their innovation processes.  Business leaders who want a how-to manual for innovation will be drawn to this approach.

Corporate Innovation in the Fifth Era is filled with practices and tools employed by Alphabet/Google, Amazon, Apple, Facebook and Microsoft, and the reader is encouraged to adopt as many of these practices and tools as might be relevant to their business.  The practices and tools are excellent, and span all four creative elements: person, process, product and environment.  The tools also make sense from a general leadership perspective; that is, a leader’s vision should be reflected in the organization’s agendas, conversations, strategies and plans, and culture.  Additionally, the authors provide an excellent toolkit of 17 specific activities for capitalizing upon external innovations (e.g. incubators, advisory boards, collaborative research, etc.)  This toolkit alone is worth the price of the book, as it provides a type of checklist for developing an external innovation strategy.

One of the more interesting insights from the book relates to the balance between incremental and disruptive innovations.  Many business leaders are consumed with developing a balanced innovation portfolio, leading to extensive debate about which projects to pursue from a risk/return perspective.  A Microsoft executive gives insight to the prevailing mindset of an innovative organization with his response: “We view innovation as being the process and customer benefit as being the objective function.  Whether a given innovation ends up being disruptive or incremental is a result of the impact the innovation has on meeting customer needs.  We can’t begin by trying to predict whether an innovation will be disruptive or not.  The result of innovation is an output variable – sometimes disruptive and sometimes incremental – but not something we know in advance.”   

Most interesting, Le Merle and Davis clearly identify a gap between leaders’ stated beliefs and their actions: Leaders universally say that the most important innovations affecting their industry will come from outside their own company and very likely from outside their own industry.  However, these same leaders also say that 70-90% of their company’s innovation resources (people and money) are allocated internally.  The authors use their own observations and evidence to support the prevailing view that disruptive innovations will most likely come from the outside.  However, they don’t address why leaders don’t act more in-line with their beliefs. 

Which gets to the hollow feeling I had while reading the book.  As a creativity student and practitioner, something seems amiss here.  The authors identify that leaders are not acting consistently with their stated beliefs.  Instead of helping the leaders identify the root cause of that inconsistency, the authors instead console and encourage the leaders to just copy successful leaders in other businesses.  At no point in the book is the leader asked to clarify why he isn’t acting consistently with his beliefs.  The book calls their attention to the contradiction without questioning why it exists.  Since the book goes on to provide advice about what to do, it then provides helpful solutions to perhaps the wrong challenge.  I believe leaders could follow many of the actions and wonder why nothing changed in the culture. 

In fact, the authors devote a whole chapter to building an innovation culture, but don’t base their recommendations on solid creativity research.  The authors identify “customer obsession” and “pride in products and services offered” as the top cultural attributes that support innovation.  While these are certainly well-known attributes of commercially successful organizations, the authors fail to recognize the underlying climate dimensions that enable a culture to convert customer obsession into leading products and services: namely, the climate dimensions understood through Ekvall’s Creative Climate Questionnaire or Amabile’s KEYS instrument. 

With insight and potential new tools, Corporate Innovation in the Fifth Era has helped me to become better equipped to change culture and set innovation strategy within my company.  Aside the aforementioned concerns, this book could be useful to boost conversation about innovation and invite leaders to think more deeply about how to achieve long-term organizational viability through increasingly disruptive change.  These would be positive steps for most organizations.  Additionally, it might help creativity practitioners to become more aware of the current activities being pursued by corporations who hope to increase innovation, as well as to understand the corporate leadership mindset just a little bit better.

 Phil Marks is the Global Director of Product Engineering for Federal-Mogul’s Systems Protection business unit.  He holds a B.S. in Mechanical Engineering from WPI (Worcester, MA), and recently became a certified professional coach.  He is pursuing his M.Sc. in Creativity Studies at ICSC/SUNY Buffalo State.


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