We sat sipping tea out of paper cups. It used to be that you drank coffee out of cartons only when you went into Starbucks. Coffee may be acceptable in a carton, but tea? It calls for some ingenuity to find cups backstage at the Nokia Theatre where Vijay Govindarajan is soon to appear before a packed house. He is one of the main attractions at the World Innovation Forum – the Davos of the innovation world.
He sits with one leg folded over the other, a picture of serenity. We talk about India and cricket. But he is here to talk to everyone else about the subject of his latest book, Ten Rules for Strategic Innovators. He tells me it is based on years of research and I can believe him. He has been working in this area for as long as anyone can remember. He says this gives everything he writes a practical turn – sometimes difficult on issues that are complex. “Forgetting” is one of them. What are the real issues in “forgetting” your past? I ask. He is thoughtful on this and takes his time to answer. Later when we are both on the stage before a massive audience he is less sanguine and races to answer; I have to hold him back. But here, now, he has time and no pressure. The Rules* are simple, he says – any important innovation will not survive in an existing established culture. As he says in the book, Rule 2: The sources of organisational memory are powerful. An innovation will be destroyed by the legacy of the past. It has to be hived off with special rules and measurements which will allow it to breathe and see the light of day. Even the people charged with its development should be separated – isolated in fact from possible contagion.
Vijay says all this with a little bit of a twinkle in his eye. He has a very wry sense of humour and he knows that his answer, while practical, is not easy for any organisation to get right. He refers to Eugene Kranz, famously portrayed by Ed Harris in the movie Apollo 13: “You remember at some stage of the movie Kranz throws out the rule book and berates his team with ‘I don’t care what it was designed to do. I am only interested in what it can do now.’ That’s what forgetting is about,” Vijay emphasizes. Being able to throw out the rule book and re-evaluate what you’re doing now as you go into the future.
Vijay is a man who has travelled far afield. Originally from India, he arrived in the US more than 30 years ago to study at Harvard Business School and never left. His travels have taken him all over the world as a lecturer and a consultant. He has tried to take every opportunity to have his family travel with him. “It is a great privilege to live in the US,” he says, “and to be able to take your family somewhere different every year.”
We sip tea and talk about mutual friends. He has an optimistic view of the world, which might go some way to understanding his three strategy boxes – boxes 1, 2 and 3. Box 1 is the one in which most mangers find themselves trapped. It deals with the present, making the numbers this quarter. Its focus is on the core business. Box 2 is about forgetting the past. It focuses on adjacencies. Box 3 deals with the future 5-10 years out. This is the box that few managers get into although he claims it is the most important one. Box 3 requires managers to think about where their businesses will be in the future and to take steps now that will ensure that it gets there. It’s all about trawling in entirely new spaces.
“The fixation of managers has been on the performance gap in the first box,” he says. “What we have to get better at is exploring the opportunity gaps in boxes 2 and 3.” I push back: “We get it,” I say, “but what steps are necessary to get this right?” It’s not easy, he admits, but it involves focusing on strategic intent and aligning the strategic architecture of the business. It’s a search for non-linear steps that will reveal opportunity gaps.
Someone comes through from the main stage area. It’s Vijay’s curtain call – he’s on in five minutes.
*The Ten Rules:
1. In all great innovation stories, the great idea is only chapter 1
2. Sources of organizational memory are powerful
3. Large, established companies can beat start-ups
4. Strategic experiments face critical unknowns
5. The NewCo organization must be built from scratch
6. Managing tensions is job one for senior management
7. NewCo needs its own planning process
8. Interest, influence, internal competition, and politics disrupt
9. Hold NewCo accountable for learning and not results
10. Companies can build a capacity for breakthrough growth through strategic innovation.
IESE News item on this.