Payback: Reaping the Rewards of Innovation |  | Authors: James P. Andrew, Harold L. Sirkin, John Butman
Publisher: Harvard Business Press
Category: Book
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Rating:  14 reviews
Sales Rank: 271,958
Media: Hardcover
Edition: 1
Pages: 228
Number Of Items: 1
Shipping Weight (lbs): 1.1
Dimensions (in): 9.2 x 6.2 x 1.1
ISBN: 1422103137
Dewey Decimal Number: 658.514
EAN: 9781422103135
ASIN: 1422103137
Publication Date: January 9, 2007
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Product Description
If you're like most people, you bet your career and company on innovation--because you must. Payback: Reaping the Rewards of Innovation offers you a new way to think about and manage innovation that will dramatically improve the odds of success. Authors James Andrew and Harold Sirkin, senior partners in The Boston Consulting Group, describe an approach to managing innovation based on the concept of a cash curve--which tracks investment against time. They ask the questions you need to ask: How much should you invest in a new product or service? How fast should you push it to market? How quickly can you get to optimal value? How much additional investment should you pour into sustaining and building the product or service? Payback offers you practical and economically sound advice on when to pursue cash flow indirectly by first pursuing other benefits, such as brand and knowledge. It also shows you how to reshape the cash curve by using different business models--integrator, orchestrator, and licenser--each of which balances risk and reward differently. The authors then present a short list of decisions and activities that you must make--not delegate--to achieve a high return on innovation. You won't find facile answers in Payback--but you will find valuable insights and practical guidance for mastering one of the most challenging and critical business activities: innovation.
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Showing reviews 1-5 of 14
 "As you sow, so shall you reap." February 7, 2007
Robert Morris (Dallas, Texas)
14 out of 15 found this review helpful
The last time I checked, I was amazed to learn that Amazon offers 178,376 books on the general subject of innovation. One of the basic truths about selling residential real estate is that "for every house, there is a buyer." The challenge is to bring the two together. The same is true of business books and those who read them. The authors of Payback, James P. Andrew and Harold L. Sirkin, do not provide an annotated bibliography but do refer to dozens of excellent sources that helped to guide and inform their explanation of how to "reap" the rewards of innovation. Presumably they would be the first to suggest that their readers also consult a number of the sources before deciding - and in this context, I presume to invoke an agricultural metaphor -- what to "plant" where in order to produce the desired "harvest." The purpose of this brief commentary is to help those who read it to decide whether or not Andrew and Sirkin's book is worthy of their careful consideration. My guess (only is a guess) is that it will be of substantial value to most (if not to all) C-level executives.
The material is carefully organized and lucidly presented within three Parts: What Is Payback? ("Cash and Cash Traps" and "The Indirect Benefits of Innovation"), Choosing the Optimal Model ("The Integrator, "The Orchestrator," or "The Licensor"), and Aligning and Leading for Payback. In the Afterword, Andrew and Sirkin then offer a cohesive, comprehensive, and cost-effect plan for "taking action" which will maximize the ROI of whatever resources have been committed innovation initiatives.
Of special interest to me is what they have to say about alignment in Chapter Seven. According to a survey conducted with BusinessWeek, the highest ranked innovative companies (in descending order) are Apple, Google, 3M, Toyota, Microsoft, GE, P&G, Nokia, Starbucks, and IBM. However different they are, "all of them are aligned around innovation and achieve payback" because they have avoided the most basic causes of innovation misalignment. Specifically, these causes are:
1. Having an innovation strategy at odds with business strategy
2. Innovation that is "all talk and no support"
3. Innovation initiatives are isolated
4. The process is fragmented and disjointed
5. "Dynasties" monopolize innovation resources
6. Metrics confound the goals of innovation
Andrew and Sirkin explain how to avoid these and other causes of misalignment, stressing the importance of achieving and then sustaining individual, unit, and companywide responsibility as well as creating and nourishing conducive conditions which include openness, and, meanwhile, "measuring what matters" with accuracy and consistency.
Efforts to "reap the rewards of innovation" require effective leadership at all levels and in all areas of operation, of course, but especially at the C-level. Leaders of innovation must have a tolerance for ambiguity; also be able to assess and be comfortable with prudent risk, be able to quickly and effectively assess an individual, be able to balance passion with objectivity, and finally and most important, be able to change.
Whatever their size and nature, all organizations need to "get their arms around [their] innovation portfolio," Andrew and Sirkin insist, and "the projects under review will fall into three categories. About a third of them will be winners that should be promoted and accelerated. Another third will be a waste of resources and should be stopped even if they are being supported by `other budgets.' These are the `walking dead,' and it takes great courage to kill them, but it must be done. The final third will be less easy to evaluate and will need further exploration and discussion to determine whether they should be kept or killed. Moving on the third that should be stopped, and reallocating resources to accelerate the third that are winners, will immediately increase payback."
Long ago, Thomas Edison asserted that "vision without execution is hallucination." While no doubt agreeing with Edison, Andrew and Sirkin take that thought a step further by insisting that execution of innovation initiatives must deliver the required return on a company's investment of money, time, and people. "Payback means one thing - cash. Cash that is realized within the planned time frame."
For decision-makers in organizations that have not as yet achieved and then sustained such payback, Andrew and Sirkin's book is a "must read"...and I mean now.
A really practical primer for managers December 28, 2006
Len Schlesinger (Columbus, Ohio USA)
10 out of 11 found this review helpful
Lots of books on innovation purport to be useful to managers but end up spinning stories that rarely hang together. Payback really delivers! The authors have constructed a user friendly framework that links profoundly to business outcomes (cash) and articulates a number of generic strategy choices that are supported by useful examples. The managerially oriented reader can't help but come away with practical assistance and a vocabulary which can be easily shared with their team. If you are truly interested in making innovation work in your orgainzation this will end up as a "must read"
Not Just Another "Idea" Book -- A Practical Guide to Making Innovation Pay January 12, 2007
Penny Reads (New York, NY United States)
7 out of 7 found this review helpful
Everyone who wants to make money should read this book -- CEO's, CFO's,mangers, inventers, and investers. It's a real hardball look what it takes to make innovation payoff...and why so many companies with good ideas fail. Had the authors been running a political campaign, the slogan would have been "It About the Cash Stupid!"
What impressed me most about Payback is that while it's filled with high caliber business insight, it's very easy to read -- not at all like many theory-laden books written by strategy consultants. There are lots of great examples, taken from companies we all know, but not necessarily ones we've read about over and over. You learn why Polaroid failed, what makes Microsoft a great innovater -- and in neither case is the answer a good idea [or lack thereof]. This is definitely the best innovation book out there -- and one that will make a real difference to your bottom line.
what a great book January 18, 2007
mike s.
5 out of 6 found this review helpful
Filled with insights and anecdotes that really delight. Innovation is one of the toughest topics out there. So many people have written about it. Andrew and Sirkin shine a bright light on what's important...getting cash back fast, focusing your portfolio and getting to daylight. Easy to read. Well organized and fun.
Leading Beyone Where The Numbers Can Tell You February 17, 2007
John Matlock (Winnemucca, NV)
3 out of 4 found this review helpful
Innovation is one of the biggest problems facing companies today. This book does an excellent job of analyzing innovation into various types of companies and showing several examples of successful and unsuccessful companies.
The authors break innovation approaches within companies into three broad categories:
1. The Integrator - Here is where a company has a core competence and they hold the developement very close to their chest. The example they use is BMW who has a core technology in engines that they protect as much as they possibly can. Afer discussing a couple of other successes they then discuss Polaroid who attempted to move from film to digital cameras but failed.
2. The Orchestrator - where a company has the broad general idea and the ability to take a product to market but doesn't have the time, expertise, or desire to do this particular design/manufacturing job.
3. The Licensor - Some companies develop technologies that they are not going to take to market themselves. Dolby is the example they use, with technology licensed to various manufacturers. They have become the standard for audio professionals.
These decisions cannot be made by accountants, they take a leader. Someone has to see the potential beyone what the sheer numbers are showing.
Showing reviews 1-5 of 14
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