The Illusion of Innovation: Escape "Efficiency" and Unleash Radical Progress

Very thoughtful book on the role of innovation for the future and the need for the continuous, creative work done by entrepreneurial startups. Also a warning to companies that pursue innovation only in superficial and nominal ways.

Elliot Parker is a good friend of mine and I go to the same Church as him and in the same ward in Indiana. This book is amazing and I will be recommending this book to everyone. Thank you, Elliot for such a wonderful book.

Gets to the heart of innovation

George Bernard Shaw once observed, “The single biggest problem in communication is the illusion that it has taken place.”  I think the same can be said of innovation.According to Clayton Christensen, there are three types of innovation that organizations can pursue:l. Performance Improvement (i.e.  replacing a product or service with one that offers greater value)2. Increased Efficiency (i.e. doing more and doing better in less time)3. Radical Empowerment (i.e. a transforming product or service that creates new classes of consumers, expands or creates markets, and/or generateds jobs for the originator or economy)In this context, I am again reminded of an observation by Peter Drucker: "There is surely nothing quite so useless as doing with great efficiency what should not be done at all."Elliott Parker: "Here is the dilemma: The first two types of innovation, while necessary, do not create enduring, resilient enterprises. Only empowering innovation, repeated over time, can build an enduring, resilient business. [begin italics] The pursuit oƒ safety and efficiency as an expense of new market creation is incredibly risky over the long run [end italics]."Parker focuses on a key insight or theme in each of the twelve chapters. Here are the first six:Chapter 1. In an environment of rapid change, what feels safe is counterintuitively risky.2. Sustained focus on efficiency creates remarkably capable -- but fragile -- organizations.3. Thriving companies are deliberately messy, not sterile.4. Corporations must reconsider their purpose, approach, and governance in a decentralized world.5. A new era of decentralization is empowering small teams and individuals to disrupt traditional corporations.6. Corporate leaders can learn from enduring natural systems, which innovate without management or objectives.With rigor and precision, Parker explains HOW to respond effectively to challenges posed by these and other realities in a business world that is more volatile, more uncertain, more complex, and more ambiguous than at any prior time that I can recall.Many years ago at one GE's annual meetings, its then chairman and CEO, Jack Welch, was asked to explain the reasons why he so highly admired small companies. Here's his reply:“For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they focus on doing what is most important. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy.”Presumably Elliott Parker agrees with Welch about the importance of establishing a workplace culture -- in almost any organization, whatever its size and nature may be--within which empowering innovation is most likely to thrive. Anything less is, at best, an illusion...or worse yet, a delusion.To those who share my high regard for The Illusion of Innovation, I recommend two others: Keith Sawyer's Zig Zag: The Surprising Path to Greater Creativity (2013) and Creative Confidence: Unleashing the Creative Potential Within Us All (2013) co-authored by Tom Kelley and David Kelley.

In the short conclusion to his new book, Elliott Parker, a startup expert, describes his consultation with a company in India that was losing $1 million per day! His analysis and presentation to the CEO involved—wait for it—the unique business cards used by the firm’s chief competitor! Must-read chapter: “Conclusion: Change Is Hard, But Not Changing Is Much Harder.” This book will change the way you think and work.Elliott Parker has harsh words for most companies, including the dozens of Fortune 500 companies he’s worked with over the last 25 years. “I have concluded that most of the tools large organizations rely on to innovate do not produce the change they seek and need.” He should know. He worked with Clayton Christensen, author of “The Innovator's Dilemma.”INNOVATION THEATER! The author writes, “Innovation efforts pursued inside corporations too often look like theater—people acting busy doing something so executives can explain to the board and investors that innovation is definitely, without a doubt, a top priority. But when reviewed after the fact, most of the effort produces little impact.”Parker warns that “…this type of investment in innovation theater is actually value destructive, not neutral in its effect: organizations would be better off doing nothing (or actively accepting and managing their decline) instead of pretending to innovate—instead of engaging in an illusion of innovation.”The author wants “…our scaled institutions—our businesses, governments, universities, and churches—to be more effective at solving big problems.” His playbook is creative and contrarian: • “This book explains why innovation naturally emerges from deliberate inefficiency.” (You read that right.) • It’s now easier for small teams and individuals to “disrupt the status quo.” • “In actuality, creativity results from collisions, from taking an idea from one context and applying it to another.”NEW LEXICON. Much like the book, “In Search of Excellence,” this also introduces a new business lexicon and I’m predicting that “The Illusion of Innovation” will pick up the slack. Here’s the new lexicon for 2024:• Scrappy, messier, frequent misses• “It is that messiness, that purposeful error making, that creates resilience.”• Corporate hospice workers• “In people and in companies, growth results from actively seeking surprises, not from predictability!”• Novelty and serendipity• Treasure hunters and patient capital• Weird! (mentioned frequently—and my favorite!)The takeaway in Chapter 9, “Selecting Shots,” will be challenging for most—but critical: “Run more experiments: fast, cheap, and weird.” (Fascinating: what happened when the NBA adopted the three-point line in the 1978-1979 season—a metaphor for innovation.)VETOCRACY. The author’s poke-in-the-ribs notes the term, “vetocracy,” coined by a political scientist. It describes “an environment in which many more people are empowered to say no than to say yes.” To combat this tendency for organizations to play it safe and avoid risk, Parker’s how-to book urges companies to embolden individuals (or a small team of “changemakers”) to go off the grid and innovate.He quotes advertising pioneer David Ogilvy, who once quipped, paraphrasing G.K. Chesterton:“Committees can criticize, but they cannot create. ‘Search the parks in all your cities, you’ll find no statutes of committees.’”EXAMPLES. Would an outside consultant give your organization high marks for innovation? Are you still funding ineffective programs, products, and services? My opinion: this could be the book-of-the-year that your senior team members must read. Some teasers: • The extraordinary account of the innovator that—amazingly—was given authority to launch the Federal Witness Protection Program. • “The most dreaded sentence a corporate innovator can hear may be, ‘Show me your revenue and profit projections for next year.’ This is an impossible request of anyone building something new, when there are more assumptions than known facts.” • Wow! In the chapter, “The Power of Small Teams,” the author notes that Instagram had just 13 employees, servicing as many as 30 million customers, when it was sold to Facebook for $1 billion! • Parker argues that most corporations are not positioned to create something new within the organization. “A corporation trying to act like a startup is like a high school marching band trying to play improvisational jazz: it may sound like a fun idea, but the result is chaos.”TOO MUCH EFFICIENCY! “…too much efficiency inevitably leads to failure in the long run.” Example: It took San Francisco 27 years (1995-2022) to build a two-mile bus lane on Van Ness Avenue at a cost of $300 million or about $110,000 per meter. “In contrast, all 1,700 miles of the Alaska Highway connecting eastern British Columbia to Fairbanks, Alaska, were constructed in 234 days in 1942” at a cost of about $1,000 per meter in 2023 dollars.THE WRONG OBJECTIVE! Must-read: the devasting 2018 Camp Fire in Paradise, Calif., was “the direct result of dramatic institutional effectiveness directed toward what is now, in retrospect, understood to be the wrong objective—fire eradication instead of fire management. We prioritized efficiency and the illusion of near-term safety over long-term resilience, and are now paying the price.”In California, between 1999 and 2017, land management burned, on average, 13,000 acres per year. Almost meaningless, we now know. As of 2018, experts estimated that the state had accumulated a “fire debt” of about 20 million acres! “…it means an area the size of Maine might need to burn before California can restabilize.”THERE’S MORE! • Reed Hastings, founder and CEO of Netflix: “Think of the standard model as clear, efficient, sanitary, sterile. Our model is messy, chaotic, and fertile. In the long term, fertile will beat sterile.” • Even though large corporations invest millions in “innovation,” they have little, if any, results. “The corporation as we once knew it is dying and may already be dead.” • “Experimentation, when done right, is chaotic, natural, and messy—not hierarchical, planned, or objective driven.” (Yikes! So much for SMART goals!) • The Innovator’s Dilemma. Should you launch a new venture internally or externally? (See the chart on page 162.)FORD v FERRARI. The author mentions the one-minute scene from the 2019 film, “Ford v Ferrari,” contrasting Ford’s engineers with a smaller enterprise, Shelby American. The test driver, Ken Miles, “no fan of corporate stodginess,” tosses the engineer-installed computer in the Ford GT40—and replaces it with strips of yarn and masking tape to observe drag on the vehicle at racing speed.BUSINESS CARDS! Don’t skip the 2 x 2 on page 232, “Rewards Go to Those Who Are Contrarian and Correct,” in the hopeful chapter, “The Optimists Will Win.” But you must also read the “Conclusion” chapter when Parker is helping a company “stop the bleeding” with a long-term strategy.In his research in 12 cities in India, he meets “an impressive entrepreneur” who played “an instrumental role in building and running one of the most successful automobile manufacturers in India.” Obsessed with keeping costs low, this entrepreneur handed Parker his business card, “which was clearly made by hand. His secretary created ‘cards’ on a sheet of paper that she printed in the office and cut with scissors. The edges and angles were imperfect, but the message was clear: this is a company that keeps costs low.”He took the business card with him to his next meeting and said this in his presentation to the CEO and senior team: “Until you’re ready to print and cut your own business cards, you’re going to have trouble competing with this company on cost.” (Read the rest of the story in the conclusion. You won’t believe it!)Did I mention this is a must-read? (And thanks to the publisher for sending me a review copy.)

Elliot is a wonderful communicator, thinker, and, most importantly, practicioner of innovation. Those who have been tasked with delivering outsized innovation within a corporate ecosystem that objectively cannot cope with the ambiguity and messiness required to realise material outcomes will find this book extremely cathartic.This book is for the intrapreneur, the entrepreneur on safari, the corporate innovation leader, and the executives who see the existential challenges ahead, but struggle to shift the interia of a very large and very sluggish mothership.This book is for those of us who have been overly influenced by Clay Christensen, Bob Moesta, and the crew who preach a similar doctrine at Mach49, like Linda Yates.This book is for those of us who see strategy being eaten by culture on the daily basis.This book is for those fighting the good fight, but feeling like they are putting on innovation theatre instead of delivering outcomes.Highly recommended as part of the core book collection for any growth strategist and innovator out there.