Perspectives on Innovation

In early 2008, we started a dialogue with innovation-minded executives through a series of articles in The McKinsey Quarterly and a survey of senior executives. One thing this work emphasized was that the siren song of an all-encompassing system for innovations may lure a company into imagining that it can systematize and therefore control them—a notion that often undermines efforts to develop and diffuse big ideas that stimulate growth. To be sure, a disciplined innovation process is valuable; without it, some organizations don’t get started. But it won’t guarantee success.

In the pages that follow, we explore in some detail the complex brew that really drives innovation—not only creative discipline and structure, but also leadership, culture, morale, and incentives, to name just a few things. Here you’ll find a window on the rich source material that underlies our evolving ideas about the subject.

For starters, we present interviews with a truly diverse set of passionate innovators: Mitchell Baker, chairman and former CEO of Mozilla, the developer of the open-source Firefox browser; Pixar director-extraordinaire Brad Bird, who won Oscars for The Incredibles and Ratatouille; Tim Brown, CEO of the design company IDEO, which develops ideas through real-world activity rather than abstract thought; McKinsey director Lowell Bryan and strategy guru Gary Hamel, discussing 21st-century management practices; and Silicon Valley legend Bill Campbell, who reflects on a career of technology innovation.

This publication also includes the January 2008 Quarterly article “Leadership and innovation,” which draws on McKinsey’s work in the trenches of innovation and on survey data. It concludes with a fascinating new Quarterly
piece by our friends Robert Sutton and Hayagreeva Rao, both of Stanford University, on what they call “The ergonomics of innovation”—the idea that organizations can and should make innovation easier rather than harder. The two authors bring this big, new concept to life by telling the story of the successful 2005–06 campaign of the Institute for Healthcare Improvement (IHI) to reduce by 100,000 the number of preventable deaths in US hospitals. ...

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THE MCKINSEY QUARTERLY
mckinseyquarterly.com

FEATURE ARTICLES
Leadership and innovation
Joanna Barsh, Marla M. Capozzi, and Jonathan Davidson
10 Innovation has become a primary force driving the growth, performance, and valuation of companies. Our research reveals a wide gap between the aspirations of executives to innovate and their ability to execute.

Many companies make the mistake of trying to spur innovation by turning to unreliable best practices and to organizational structures and processes. Our research shows that executives who focus on stimulating and supporting innovation by their employees can promote and sustain it with the current talent and resources—and more effectively than they could by using other incentives.

Three approaches can help executives mount innovation efforts. First, senior management should actively support behavior that promotes innovation. Second, network analysis can identify where the capacity for innovation already exists within an organization and help it build more innovative networks. Finally, executives should seed innovative thinking by focusing on selected managers and projects.
The McKinsey Quarterly, 2008 Number 1

Succeeding at opensource innovation: An interview with Mozilla’s Mitchell Baker
Lenny T. Mendonca and Robert Sutton
22 Few organizations have as much experience harnessing the talents of people outside their corporate walls as does Mozilla Corporation, the developer of the open-source Firefox Web browser. The company depends on volunteers for productdevelopment decisions, software coding, distribution, and promotion.

Mitchell Baker has helped lead the project to develop the browser since its origins, in the late 1990s. In this interview, she talks about the balance between maintaining control and letting motivated people run with their passions.

As the Firefox browser has gained market share, it has become a prominent example of a successful open-source project. Baker says that a traditional organization could not have achieved this success.
mckinseyquarterly.com, January 2008

Innovation lessons from Pixar: An interview with Oscar-winning director Brad Bird
Hayagreeva Rao, Robert Sutton, and Allen P. Webb
32 Pixar’s Brad Bird makes his living fostering creativity. In an interview, this director of two Academy Award–winning animated films (The Incredibles and Ratatouille) describes how he pushes teams of animators beyond their comfort zones, encourages dissent, and builds morale.

Bird’s experiences and anecdotes hold powerful  essons for executives in any organization seeking to nurture innovation.
mckinseyquarterly.com, April 2008

Lessons from innovation’s front lines: An interview with IDEO’s CEO
Lenny T. Mendonca and Hayagreeva Rao
44 Tim Brown, CEO of the design firm IDEO, has been on the front lines of innovation for more than two decades.

In this interview, he distills lessons from a career spent helping scores of companies, nonprofits, and government agencies to become more innovative.

Brown doesn’t emphasize a philosophy of design or suggest that what works at IDEO will work everywhere else. Rather, he focuses on the importance of leadership and incentives, as well as understanding the forces that undermine innovation.
mckinseyquarterly.com, October 2008

Coaching innovation: An interview with Intuit’s Bill Campbell
Lenny T. Mendonca and Kevin D. Sneader
52 In an interview on innovation, Bill Campbell, the chairman of the software maker Intuit and a high-level counselor to Silicon Valley icons including Apple and Google, discusses how companies such as Google strive to invent new products and services, while others, like Apple, focus on perfecting technology to create a seamless end-to-end consumer experience.

Innovative organizations, Campbell believes, start with engineers who have the clout to lead the productdevelopment process. He outlines ways for managers to organize a culture of innovation and motivate teams to advance it.

Campbell also discusses managerial approaches to marketing, setting priorities for innovation, and balancing the need for investment in innovation with the financial markets’ demand for strong quarterly financial results.
The McKinsey Quarterly, 2007 Number 1

Innovative management: A conversation with Gary Hamel and Lowell Bryan
Joanna Barsh
62 In this conversation, management guru Gary Hamel and McKinsey’s Lowell Bryan discuss the need for companies to innovate management practices to better cope with and thrive in a business landscape marked by fundamental technological change and globalization.

The conversation builds upon the work that Hamel and Bryan explored in their latest books—Hamel’s The Future of Management, and Bryan’s Mobilizing Minds, which he coauthored with McKinsey partner Claudia Joyce.

The authors discuss how traditional management models do not enable businesses to adequately respond to today’s competitive forces. In a new environment that places a premium on collaboration and talent, they view old organizational structures as impediments to innovation and creative strategy.

Hamel and Bryan explore the need for executives to balance revolutionary management thinking with practical experimentation to find new, innovative management models.
The McKinsey Quarterly, 2008 Number 1

The ergonomics of innovation Hayagreeva Rao and Robert Sutton
74 Many people and organizations find it difficult to be as innovative as they would like. Yet there are concrete steps organizations can take that can make it easier to stimulate innovation and change.

A successful campaign to save 100,000 lives by changing the practices of thousands of hospitals illustrates the importance of making it easier for organizations to embrace new ideas and engage networks of external collaborators.

The campaign helped hospitals eliminate preventable medical errors by recombining old ideas to create new priorities, setting goals that galvanized action, starting with small steps, and developing tools that eased the burden on change agents. Businesses looking to innovate can borrow successfully from these simple moves.
The McKinsey Quarterly, 2008 Number 4

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