Most Helpful Customer Reviews
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28 of 31 people found the following review helpful:
5.0 out of 5 stars
Combining the best of CoreCo and NewCo, January 13, 2006
I begin this review with an unorthodox suggestion: Read the last chapter first, Chapter Ten, in which Govindarajan and Trimble explain the "Ten Rules," before reading the Introduction and then the nine chapters which follow. Normally I would not presume to offer this suggestion because, in most business books, the presentation of a given "rule," "lesson," etc. is best understood within a specific context. Indeed, Govindarajan and Trimble provide one for each of their ten "Rules." However, one man's opinion, I think it will be helpful to have at least a sense of the conceptual framework before examining the substance of a cohesive, comprehensive, and cost-effective program within which to formulate appropriate strategies.
Govindarajan and Trimble affirm the value of strategic experiments because they can have high revenue growth potential, focus on emerging or poorly defined industries, test an unproven business model, involve radical departure from existing business, require allocation of at least some existing assets and competencies, develop new knowledge and capabilities, create discontinuous rather than incremental value creation, have greater uncertainty across multiple functions, tend to be unprofitable for several quarters (or more), and offer little (if any) indication of performance, at least initially. In other words, strategic experiments can be messy and unpredictable. Why bother?
Govindarajan and Trimble suggest that strategic innovation is a process by which to test new, unproven, and significantly different answers to at least one of three fundamental questions: Who is the customer? What is the value offered to that customer? How is that value delivered? Presumably Govindarajan and Trimble agree that it is difficult (if not impossible) to manage what cannot be measured. Therefore, to their three questions I now presume to add two others: How to measure the value of what is offered? and then, How to measure the effectiveness of the delivery system? To obtain appropriate answers to each of these and other questions, experiments of various kinds are necessary. In my opinion, messiness and unpredictability seem a small price to pay, given the value of what can be learned from the experiments and then applied effectively within the given competitive marketplace.
Of special interest to me is the material which Govindarajan and Trimble provide with regard to three different challenges: "Forgetting" assumptions, mind-sets, and biases which may no longer be valid or even relevant; "Borrowing" assets and resources with concrete value; and "Learning" how to improve predictions of business performance. I appreciate Govindarajan and Trimble's skillful use of two hypothetical companies, CoreCo and NewCo, which facilitate all manner of comparisons and contrasts which help to illustrate the various strategies and tactics which Govindarajan and Trimble recommend. For example, in Chapter One when explaining why strategic innovators need a different approach to execution, they examine the four elements of organizational DNA, cross-referencing CoreCo and NewCo to make their key points. Well-done!
With all due respect to the substance as well as eloquence of Govindarajan and Trimble's narrative, I especially appreciate their use of various reader-friendly devices. For example, Figure 1-1 which lists "Ten characteristics of strategic experiments" (page xx in the Introduction); Table 2-4 which identifies the elements, choices, and results re "Outcomes of CMT's initial organizational DNA (page 39); Table 5-1 which, when used in conjunction with Figure 5-5 which precedes it, enables the reader to assess the intensity of the borrowing challenge (page 87); and Table 9-4 which, when used with Figure 9-14 which precedes it, enables the reader to assess the intensity of the learning challenge (page 182).
For most decision-makers in most organizations (regardless of size or nature), Govindarajan and Trimble do indeed provide -- as indicated earlier -- a conceptual framework for a cohesive, comprehensive, and cost-effective program within which to formulate appropriate strategies. Organizational DNA may have to be re-wired in terms of staffing, structure, systems, and cultural values when facing the three challenges of forgetting, borrowing, and learning. Expect messiness, confusion, frustration, and -- yes -- setbacks while completing that immensely difficult process. Eventually, however, with total commitment of everyone involved, supported by sufficient resources (which include patience), the best of CoreCo can be combined with the best of NewCo.
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8 of 9 people found the following review helpful:
5.0 out of 5 stars
A "must-understand" for leaders concerned with long-term prosperity, July 13, 2006
Many thanks to Vijay Govindarajan (VG) and Chris Trimble for this grand exposition of ideas first shared in the Spring 2005 California Management Review and the May 2005 Harvard Business Review. VG and Trimble's "Forget, Borrow, Learn" framework is the most powerful recipe for corporate reinvention that I have encountered.
As other Amazon reviewers have skillfully described the contents of this excellent book, I would like to add just two things.
First, as a graduate of the Tuck School of Business, I had the good fortune of encountering VG in the classroom. VG is a dynamic presence who commands attention. If you get a chance to experience VG in person, take it. To get a (very) small taste of what I am talking about, check out VG's video link at Tuck's website.
Second, to learn further from VG, I highly recommend VG's blog. Several of VG's posts are pure gold. For example, in VG's March 10, 2006 post, he puts forth his "three box thinking model," with box 1 being "Manage the present," box 2 being "Selectively abandon the past," and box 3 being "Create the future." The leaders of most companies spend most of their time in box 1, believing that they are working on strategy. As VG contends, though, strategy is really about boxes 2 and (especially) 3, that is, figuring out how to allocate scarce resources today to assure market leadership in 2010, 2020, and beyond. Yes, indeed.
In sum, I not only recommend this book wholeheartedly, but also urge those concerned with the long-term health of their firms to continue reckoning with the thoughts and writings of both VG and Chris Trimble.
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6 of 7 people found the following review helpful:
5.0 out of 5 stars
Raising Tigers, May 9, 2006
In Nature it is rare for one species to successfully rear the young of another species. The difficulties, for example, of a tiger cub being raised by a herd of elephants are easy to imagine. If the tiger isn't accidentally trampled underfoot while it is still too immature to look after itself, it is only a matter of time before some astute members of the elephant herd recognize they are raising a natural enemy, and trample it underfoot on purpose.
So it is in Business. We all too often witness the apathy, turf battles, or occasional outright sabotage that cause fledgling products to be trampled underfoot well before they reach fruition. It seems that to survive, new and radical innovations must be nurtured by wholly independent start-ups - away from the threatening feet of the elephant herd at Headquarters, but consequently of little benefit to them either.
"Ten Rules for Strategic Innovators" by Vijay Govindarajan and Chris Trimble offers a refreshing and hopeful new viewpoint on this topic. Both authors are recognized consultants to businesses throughout the world, as well as being academics, and their approach is analytical, with a surprising amount of common sense and a good portion of useable "how-to" ideas. A lot of it is theory, of course, backed by the 20/20 vision of hindsight brought to bear on some very interesting case studies. But it is plausible theory, and will give consultants and management several new viewpoints to explore.
In the first four chapters the authors describe the inevitable three-way dynamic struggle involved with major innovations. On the one hand, the new venture (NewCo in the vernacular of the book) must Borrow from CoreCo (the established parent company) to have competitive advantage over independent start-ups. CoreCo's intellectual property, production capacity, R&D resources, and so on will be extremely valuable to NewCo during its early days. On the other hand, NewCo must Forget many of CoreCo's ways of doing things. NewCo is just like a start-up in many ways and must have different methods for planning, for rewarding employees, for satisfying customers. They need a different culture. An inability to manage the natural tension involved in trying to balance the Borrowing and the Forgetting is a major reason that many strategic innovations fail.
The third dynamic is Learning. The authors characterize successful strategic innovations as being successful learning experiences. They are experiments, and indeed for the rest of the book they are referred to as "Strategic Experiments". Running an experiment is a lot different from running an established business. There has to be planning and accountability, but of a very different kind. Govindarajan and Trimble describe their innovative Theory-Focused Planning (TFP) process for use in an environment where there are several critical unknowns. This is a complex topic worthy of its own book and in the space of one chapter amounts to just a brief introduction - though it certainly serves to remind us that for strategic innovations the traditional Business Plan is less than useless. TFP forms a theory that links the causes-and-effects of the components of the strategic experiment, and combines that with trend analyses for their corresponding metrics. It provides a powerful and flexible method for moving forward with an increased level of confidence in the face of many unknowns. TFP clearly can be used in any situation where you are faced with high levels of uncertainty, and could be an important part of a business' tool kit in the future. It would be wise to watch for further developments of this methodology.
It isn't until the last chapter that the "Ten Rules for Strategic Innovators" are assembled. While telling the story of a successful strategic experiment at Analog Devices, Inc. the Ten Rules are condensed from the earlier chapters of the book. This gives them context and meaning in a very practical sense.
Keeping companies healthy is what we (consultants) do, and Strategic Innovation is one area where we can help them renew their growth curves. It is still a relatively new area and to quote from the book, "..rarely do managers of strategic experiments return for an encore." and hence, "few people, if any, within your organization can guide you from their direct experience." [Introduction, page xxvii] If that isn't an opportunity for a forward-looking manager (or a seasoned consultant), I don't know what is.
"The Ten Rules for Strategic Innovators" isn't the first book on the subject and it certainly won't be the last. It is however one of the few that contains useful tools we can apply to real-world situations to analyze the dynamics involved, and respond with common-sense fixes. If your field of practice includes Strategic Innovations this is a must-have book for your library. In fact anyone that spends time implementing brave new ideas at growing companies, and effecting the changes that go along with them, would benefit from thinking through the concept of balancing the Borrowing, Forgetting and Learning components. Before you know it, you'll be raising tigers too!
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