Class 3: Creative Destruction, Disruptive Innovation, and the Innovators Dilemma Applications of Creativity and Innovation CULT 34857GD Dr. Michael McNamara Purpose: To introduce and familiarize students with the process (and dilemma) of “disruptive innovation”. To further prepare students who aspire to become ‘disruptive innovators’ Kaufmann’s Ladder of Creativity (4c’s) Schumpeter’s ”Creative Destruction” Christensen’s “Disruptive Innovation” and ”The Innovator’s Dilemma” Case Studies Take-aways Bonus Assignment Agenda How far up the ladder? James Kauffman: Mini-c: the novel and personally meaningful interpretation of experiences, actions, and event made by individuals (ex., learning combinations of light and shadow in drawing) Ex., new learnings achieved by learning how to draw, spiritual development through yoga Types of “Creativity”: 4C Model- Creativity’s ladder Little-c: everyday creative acts of individuals who are not particularly expert in a situation (ex., a painting you made as a gift) Ex., making a dinner, making your own wedding invitations, landscaping your own backyard Kaufmann’s 4C Model Pro-C: associated with the creative acts of professional who have mastered a field (ex., creative professional sells their paintings) Ex., an author Kaufmann’s 4C model Big C: Creativity that brings about significant change in a domain Ex., Van Gogh’s Starry Night, Nirvana’s “Nevermind” Mozart's Genius Kaufmann’s 4C model Duchamp’s “Fountain” A New and value-added output (product, process, marketing, organizational, social) Forms Incremental: utilizes existing technology and increases value to the user (features, design changes, etc.) within existing market Ex., Iphone 10 Architectural: taking the lessons, skills and technology and applying them within a different market Ex., NASA’s airraft cushions; foam applied to beds (memory foam) Disruptive: applying new technology or processes to a current market Ex., Digital camera Radical: gives birth to new industries; involves creating revolutionary technology Ex., Airplane   Innovation in ‘markets’ Creative Destruction 2 Contradictions of Capitalism Inevitable loss of consumer: As capitalists modernize and automate, they pay workers less and less, which eliminates the consumers (aka. The worker) needed to buy his products Monopoly: As capitalists compete against each other, losers are relegated to the proletariat class until there is only 1 capitalist left. Thus, Capitalism’s collapse is inevitable. Marx on Capitalism’s Contradiction and Collapse Creative destruction (aka. Schumpeter's gale): Joseph Schumpeter “Gale of creative destruction“: "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one". New players introduce innovations that erod.

1. Class 3: Creative Destruction, Disruptive Innovation, and the
Innovators Dilemma
Applications of Creativity and Innovation
CULT 34857GD
Dr. Michael McNamara
Purpose: To introduce and familiarize students with the process
(and dilemma) of “disruptive innovation”. To further prepare
students who aspire to become ‘disruptive innovators’
Kaufmann’s Ladder of Creativity (4c’s)
Schumpeter’s ”Creative Destruction”
Christensen’s “Disruptive Innovation” and ”The Innovator’s
Dilemma”
Case Studies
Take-aways
Bonus Assignment
Agenda

2. How far up the ladder?
James Kauffman:
Mini-c: the novel and personally meaningful interpretation of
experiences, actions, and event made by individuals (ex.,
learning combinations of light and shadow in drawing)
Ex., new learnings achieved by learning how to draw, spiritual
development through yoga
Types of “Creativity”: 4C Model- Creativity’s ladder
Little-c: everyday creative acts of individuals who are not
particularly expert in a situation (ex., a painting you made as a
gift)
Ex., making a dinner, making your own wedding invitations,
landscaping your own backyard
Kaufmann’s 4C Model
Pro-C: associated with the creative acts of professional who

3. have mastered a field (ex., creative professional sells their
paintings)
Ex., an author
Kaufmann’s 4C model
Big C: Creativity that brings about significant change in a
domain
Ex., Van Gogh’s Starry Night, Nirvana’s “Nevermind”
Mozart's Genius
Kaufmann’s 4C model

4. Duchamp’s “Fountain”

5. A New and value-added output (product, process, marketing,
organizational, social)
Forms
Incremental: utilizes existing technology and increases value to
the user (features, design changes, etc.) within existing market
Ex., Iphone 10
Architectural: taking the lessons, skills and technology and
applying them within a different market
Ex., NASA’s airraft cushions; foam applied to beds (memory
foam)
Disruptive: applying new technology or processes to a current
market
Ex., Digital camera
Radical: gives birth to new industries; involves creating
revolutionary technology
Ex., Airplane
Innovation in ‘markets’
Creative Destruction

6. 2 Contradictions of Capitalism
Inevitable loss of consumer: As capitalists modernize and
automate, they pay workers less and less, which eliminates the
consumers (aka. The worker) needed to buy his products
Monopoly: As capitalists compete against each other, losers are
relegated to the proletariat class until there is only 1 capitalist
left.
Thus, Capitalism’s collapse is inevitable.
Marx on Capitalism’s Contradiction and Collapse
Creative destruction (aka. Schumpeter's gale):
Joseph Schumpeter
“Gale of creative destruction“: "process of industrial mutation
that incessantly revolutionizes the economic structure from
within, incessantly destroying the old one, incessantly creating
a new one".

7. New players introduce innovations that erode the ‘market’ of
old firms (profits and position); old firms either die or succumb
to the pressure of new innovation
Innovation creates ‘industrial mutations’ that ‘incessantly
revolutionize’ the economic structure from within; incessantly
destroying the old one, and incessantly creating the new one.
Creative Destruction- an essential fact about capitalism (we just
have to live with it!)
Ex., Newspapers
New innovation (online ad-support news sites) leading to the
creative destruction of traditional newspapers
Evidence: From 1990-2013; Employment in the newspaper
business fell from 455,700 to 225,100; Employment in internet
publishing and broadcasting grew from 29,400 to 121,200
Schumpeter: Creative Destruction, Innovation, and Renewal in
Capitalist Systems
Ice 1.0: 1880s; thriving industry
Cut chunks of ice out of the frozen northern lakes, wrap, ship
Ice 2.0: 1890’s: commercial refrigeration system
Ice 3.0: 1930’s: personal refrigeration systems
Example: Ice
Fallen from 60 years 1950s to 10 years today

8. A Case Study of Disruption
Dilemmas of Disruptive Technology
performance demanded at the high end of the market
New performance trajectory
Disruptive technology
PERFORMANCE
TIME
performance demanded at the low end of the market or in a new
emerging market
Established Market Technology Trajectory
Emerging Market Technology Trajectory
Blockbuster, Jumbo etc. (convenience store rental)
Netflix (mail ‘97- home steaming ’07)
24
Disruptive Technology
The sustaining/efficiency innovations are on the blue line e.g.,
incremental engineering advances that all good companies are

9. able to grind out.
The downward yellow arrow, a disruptive innovation, is
something that brings to the market a product or service that is
not as good as what historically had been available, and
therefore it can't be valued or used by customers in the
mainstream of the market. Yet it takes root in a different
application.
The green line represents the new performance trajectory - it
slopes upward faster than the sustaining technology and
intersects with the customers needs and the mainstream.
25
The Innovation Adoption Lifecycle
Netflix mail (97-06); streaming (07-)
Blockbuster (90-07)
Disruption and the Innovator’s Dilemma

10. The Innovator’s Dilemma
The best of conventional good business practices can
ultimately weaken and destroy a great firm
from “The Innovator’s Dilemma”, by Clayton M.
Christensen, Harvard Business School Professor
28
The Innovator’s Dilemma
The Innovator's Dilemma: A company which is in an existing
business and listening to its existing customers feels that there
is no need for anything new.
Where should an established firm invest its money?
Efficiency/Sustaining innovations: To make new products that
its best customers can use and that would improve the
company’s profit margins" or
Disruptive innovations: To create worse products that none of
its customers can use, that would wreck its profit margins.

11. 29
The Innovator’s Dilemma
“Disruptive technology" is usually dismissed out of hand by an
industry's established leaders until it was too late.
Large companies choose to overlook disruptive technologies
until they become more attractive profit-wise.
Why?
Disruptive technologies work by offering, at least initially, little
in the way of performance, but plenty in terms of cheapness,
convenience and ease of use.
As such, they appeal to a different class of customers, carving
out new markets for themselves before going on to have the
industrial Goliaths' business for lunch.
30
The Epic Failure of “Blockbuster”
https://www.youtube.com/watch?v=Hc67GlwWo5o

12. An understanding of ‘disruptive innovation’
How ‘creativity’ intersects with ‘DI”
Creativity’s purpose (from a market pov)
Importance of ‘vision’
Importance of ‘risk’ (think innovator’s dilemma)
Innovators and Early adopters vs. Mainstream and Laggards
To further prepare you for life in this century of continual
disruption
Insights and Take-aways
What company do you think is the next blockbuster?
Is there a product or service out there today that is not currently
as good, not used, and not valued by the mainstream market…
BUT you think its’ performance trajectory will eventually
intersect with the mainstream market and overtake today’s
dominant players? Whose time is limited (who is the next
blockbuster, kodak, taxi company)? Who is going to disrupt the
market (who is the next Netflix, uber, amazon?)
Bonus: Whose up Next?

13. Case Study: [yellowtail]
Casella saw that most US consumers preferred beer, spirits and
pre-packaged cocktails to wine
Consumers saw wine as a turn-off due to
It was pretentious
The taste was too complex
It could be intimidating
Case Study: [yellowtail]
They broke out of traditional wine market by creating a wine
that:
Appealed to beer and spirits drinkers by being fun and
unpretentious
Had a less complex, sweeter and smooth taste
Was easy to select
Not focus on prestige, aging,
Eliminated all factors that the wine industry had long competed
on!

14. W. Chan Kim and Renée Mauborgne (2004). Blue Ocean
Strategy
Based on a study of 150 strategic moves spanning more than a
hundred years and thirty industries
Companies can succeed by creating "blue oceans" of
uncontested market space, as opposed to "red oceans"
Strategic moves create a leap in value by unlocking new demand
and making the competition irrelevant.
Ability to systematically create and capture blue oceans
Blue Ocean Strategy
Red Oceans
Red Oceans represent all industries in existence today.
They have defined rules, competitors, and market boundaries.
Blue Oceans
Blue Oceans represent all industries NOT in existence today.
Most Blue Oceans created out of Red Ocean industries
This is undefined market space, otherwise known as

15. OPPORTUNITY.
Creativity… in light of what’s out there…
Blue Ocean Strategy
To differentiate yourself in the market place, you must focus on
alternatives and non-customers to re-define the marketplace
For example, Casella Wines: How do you make a fun and non
traditional wine that is easy for everyone to drink? Aka., how
do you make a wine for Anna?
To win in the future, companies must stop competing with each
other. The only way to beat the competition is to stop trying to
beat the competition.
The Strategy Canvas
Captures the current state of play in the market by detailing the
factors players compete on in product, service and delivery
B.O.S.: A deliberate attempt to find and create a ‘new market’
by emphasizing new/different competitive factors relative to

16. existing ‘red ocean’ (aka., traditional market)
43
Have a bottle of regular wine and a bottle of [yellowtail] to pass
around.
The Red Ocean of Circus
Traditional circuses focused on:
Benchmarking the competition
High-profile “stars”, which increased costs but who were
largely unknown to the general public
Traditional venue
Traditional audiences
Week 7: Human History as Disruptive Innovation
Applications of Creativity and Innovation
CULT 34857GD
Dr. Michael McNamara

17. 1
Creativity vs. Innovation
“Innovation as process” (implementation related activities; ex.,
prototyping, design, resourcing, diffusion, commercialization)
“Innovation as output”
“Creative Destruction”
”Disruptive Innovation”
B.O.S.
Characteristics of the Innovator
Innovators DNA
Grit & Empathy
Review
“A hundred times every day I remind myself that my inner and
outer life depend on the labors of other men, living and dead,
and that I must exert myself in order to give in the same
measure as I have received and am still receiving.” ~Albert
Einstein.
Innovation is never done alone or in isolation
The Unparalleled History of Human Ingenuity (or, how we got
to here)

18. Humans first evolved in Africa about 2.5 million years ago.
Prehistoric humans were no more important or impressive than
other mammals.
2 million- 10,000 years ago: multiple human species roamed the
earth together
Early Humans (2 million-80,000 BCE)
The “Default Network”
Mental structures that influence thought and actions outside
conscious awareness or control.
Independent of input from the conscious mind
Effortless, fast, instinctual and spontaneous thinking:
Intuition
Emotions
Evolutionarily evolved instincts
Reactions (ex, fight/flight)
Type 1 Thinking
Homo Sapiens evolved to develop more ‘cognitively
sophisticated modes of thought’
Behavioural modernity: Developed a suite of behavioural and

19. cognitive traits; including, abstract thinking, language,
symbolic behavior, shared social understandings
Allows for new/improved behaviours:
Group coordination
Planning
Task division
Future scenario/anticipation
Rational decision-making
Innovation
The Cognitive Revolution (c. 70,000 BCE)
“Executive Attention Network” (Attentional Network):
The Conscious mind capable of directing thought
Ability to concentrate
Effortful, deliberate and controlled
Rationality (logic to think through a problem)
Associative (making associations between given subjects)
Cause-and-effect reasoning
Reality monitoring (distinguishing imagination from reality)
Metacognition (reflect on one’s own mental activities)
Executive functioning (mental control and self-regulation)
Performs slow and sequential thinking (aka. “Thinking Slow”)
Development of Type 2 Thinking System

20. Human Flourishing
Improved Nutrition
More advanced hunting techniques
Technological innovation
More complex social organizations (extended tribes)
Emergence of culture (shared social understandings)
Environmental Impacts:
Massive human migrations
Gave rise to mass extinction of Neanderthals, along with
numerous other megafauna.
Impacts of “Cognitive Revolution”
Transition of human cultures from hunting and gathering to one
of of agriculture and settlements
Settled communities
Improved Nutrition

21. More time to invest other activities (ex., education, religion,
recreation, sports, etc)
Development of economies, trade, markets, and manufacturing
activities
Domestication of animals and crops
Technological innovation in farming
Emergence of culture
Massive human migrations (and transportation networks)
Humans change the face of the land
The Agricultural Revolution (c. 10,000 BCE)
The emergence of modern science, marked by developments in
math, physics, astronomy, biology, chemistry
Transformed the views of society… laws of nature are
discoverable!
Scientific method gives rise to an explosion of new innovations
and technological breakthroughs
The Scientific Revolution (c. 1600)
WATER & STEAM
New steam and water-driven technologies replace human and

22. animal labor, amassing workers in factories instead of singular
shops
Impact:
Average income and population experience sustained growth
Movement of goods, services, people, ideas increases
significantly
Best average speed goes from 10mph (horses and wind) to
65mph (steam train) and 35 (steam ship).
The First Industrial Revolution (1760s-1840s)
Electricity & Rapid Industrialization
Electricity, internal combustion engines, and mass production
IC Engines, electricity, telephones, interchangeable parts,
(Bessemer Process) steel replaces iron
Automobiles, ship-building, machine tools, engines, turbines
Impact:
Income and population experience sustained growth (again)
Movement of goods, services, people, ideas increases
significantly (again)
Massive Intensification of Production and Manufacturing
Second Industrial Revolution (1870s- 1910s)

23. Computer or digital revolution
Catalyzed by the development of semiconductors, mainframe
computing (1960s), personal computing (1970s and 80s) and the
internet (1990s).
Impact:
Things move instantly
World becomes ‘flat’; fully-integrated global markets
Amongst other things
Third Industrial Revolution (1960s to 2000s)
Humans have been the most successful species on the planet
(roaches and rats have done well, too).
Technology innovation
Group collaboration
Communication.
Humans not only have all 3, but we excel at all 3!!!!
The “Human Enterprise” accelerates exponentially after 1945
Continued (and significant) advances in technology (health,

24. tech, social, etc) lead to:
Human population
Fossil Fuel Consumption:
CO2 Emissions:
Water usage:
Urbanization:
Pollution:
Age of Acceleration (1945-today)

25. Welcome to the Anthropocene
10/26/2022
24
A new “Geological Era” epoch?
Cognitive Revolution (70,000 BCE)
Our unique cognitive abilities have allowed us to develop
innovations that have allowed us to flourish
But the impact of our intellect is so significant that we have
marked the earth’s Geological Time Scale with our activities
(The Anthropocene)
The “Anthropocene”

26. FUSION of New Technologies and their INTERACTION across
the Physical, Digital, and Biological Domains
4.0 is different in 3 ways:
Velocity: Evolving at an exponential rather than linear pace.
Tech begets ever more capable tech.
Breadth and depth: Unprecedented paradigm shifts ACROSS the
economy, business, society, and individually. It is not only
changing the “what” and the “how” of doing things but also
“who” we are.
Systems Impact: It involves the transformation of entire
systems, across (and within) countries, companies, industries
and society as a whole.
Fourth Industrial Revolution (2000 to ??)
“There is someone alive today who will live to be 1,000 years
old”.
Aubrey de Grey, regenerative medicine,
Yuval Noah Harari (2017). Homo Deus
The possibility of the replacement of humankind with the "homo
deus" (human god) endowed with abilities such as eternal (given
technological implants, upgrades, and integration).
"What will happen to society, politics and daily life when non-
conscious but highly intelligent algorithms know us better than
we know ourselves?”
Super-Humans? Ex-Machina?

27. 4IR; Rapid change to technology, industries, and societal
patterns and processes in the 21st century due to increasing
interconnectivity and automation
A new “internet” civilization?: social, political, and economic
shift from the digital age of the 90’s and early 2000’s to an era
of ‘embedded connectivity’ distinguished by the omni-use and
commonness of technological use throughout society (the
metaverse) that changes the way humans experience and know
the world around them.
Our New Civilization?
Marked by our astounding capacity for innovation
Unprecedented rate of change, uncertainty and disruption
Yuval Noah Harari; how can we prepare anyone when we have
no idea what the world will look like in 2050 (or 2030 for that
matter)?
The Role of Creativity:
Innovation is about reimagining our relationship with nature,
our world, and ourselves
Our current epoch

28. What “signals” from this new world can we use to imagine the
‘innovations’ of the future?
Type 1 & Type 2 Thinking
Human Abilities:
Innovation
Group Coordination
Communication
Various Technological Revolutions in History
“Age of Acceleration”
The “Anthropocene”
The 4IR
The Job of Creativity in this historical epoch
Insights and Take-aways

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Class 6: Characteristics of the Innovator (Con’t)
Applications of Creativity and Innovation
CULT 34857GD
Dr. Michael McNamara
Topics:
Christiansen’s Theory of Disruptive Innovation
The Innovator’s Dilemma
Blue Ocean Strategizing
The Four Action Framework for Disruption
Dyer et.al. “Innovator’s DNA”

31. Review
Class 6: Characteristics and Journeys of the Innovator
Practice, Passion and Perseverance (Grit)
The Innovator’s DNA
Required Readings
L. Fessier “You’re no genius”: Her Father’s shutdowns made
Angela Duckworth a world expert on Grit”; Available at:
https://qz.com/work/1233940/angela-duckworth-
explains-grit-is-the-key-to-success-and-self-confidence/
J. H. Dyer, H.B . Gregersen, and C.M. Christensen (2009).
“Spotlight on Innovation: The Innovator’s DNA.” HBR.
ASSIGNMENT Coming Due: DISRUPTIVE INNOVATION
PROJECT
Agenda for Today
Warm up Exercise

32. What does the research tell us about the personalities, habits,
and dispositions of ‘great innovators’?
Question for the day:
How Innovators Stack up on the 5 Discovery Skills
Founder, Dell Technologies
Founder, BlackBerry
Founder, Ebay
Founder, Intuit
Empathy and EI
Bartal, Decety, Mason (2011). “Empathy and Pro-social

33. Behaviour in Rats” Science
Key Questions: Will a rat release another rat from a cage
without being given a reward?
After several sessions, the free rat learned to intentionally and
quickly open the restrainer and free the cagemate.
Rats did not open empty or object-containing restrainers.
When liberating a cagemate was pitted against chocolate
contained within a second restrainer, rats opened both
restrainers and typically shared the chocolate.
Take-aways?: Rats behave pro-socially; providing strong
evidence for biological roots of empathically motivated helping
behavior.
Pro-Social Rats?
8
Monkeys
Rizzolatti (et.al.), U of Parma
Electrodes on macaque monkey to study neurons specialized for
hand and mouth actions
Neurons response when a Monkey observes other monkeys
picking up food IS VERY SIMILAR to the neuron response
when the monkey itself picks up food
10% of neurons have "mirror" properties
The brain gives similar responses to performed and observed
actions
Humans:
Christian Keysers (et.al) (2002)
Humans have similar mirror neurons systems

34. Identified brain regions which respond during both action and
observation of action.
“The observer feels what it feels like to move in the observed
way”
Prosocial Monkeys: “Mirror Neuron”
Dacher Keltner, Psychologist, UC Berkeley, Co-Director of the
Greater Good Science Center
Compassion & Empathy are our strongest instincts
Necessary for human evolution and survival of the species
Compassion is at the heart of human culture and our very
biology
https://www.youtube.com/watch?v=fmS8L6pQYss
Empathy and Human Evolution
“Perspective-taking”
The ability to see the world through others’ eyes
Gives us a mental sense of how another person’s thinking
works.
Tells us how best to communicate with that person; what
matters most to them; their models of the world; and even what
words to use
Leads to better than expected performance from their direct
reports

35. 1. Cognitive Empathy
We feel (physically) what the other person does in an
instantaneous body-to-body connection.
Tuning into another persons feeling
Pick-up their facial, vocal, and stream of other non-verbal signs
of how they feel instant to instant.
Depends on our tuning in to our body’s emotional signals,
which automatically mirror the other person’s feelings.
2. Emotional Empathy

36. We are spontaneously moved to help the individual if needed.
Empathic concern:
Sympathy and compassion for others in response to their
suffering
Personal distress:
Self-centered feelings of discomfort and anxiety in response to
another's suffering.
Developmental aspects(?)
Ex., Infants respond to distress of others by getting distressed
themselves
3. Compassionate Empathy
Daniel Goleman; Psychologist & Journalist (New York Times)
Emotional Intelligence (1995)
Non-cognitive skills matter as much as IQ (intelligence) for
workplace success
Self-awareness
Self-regulation
Empathy
Social Skills/ Skilled Relationships
https://www.youtube.com/watch?v=Y7m9eNoB3NU
Empathy: The Key to Professional Success(?)

37. Sarah Konrath and Edward O’Brien, University of Michigan
Study (2010)
Data on 14,000 college students over the last 30 years; Biggest
drop after 2000
College kids today are 40 percent lower than 20 or 30 years ago
Measured by standard tests of this personality trait."
Less likely to agree: "I sometimes try to understand my friends
better by imagining how things look from their perspective" and
"I often have tender, concerned feelings for people less
fortunate than me."
Why in decline?
Increased exposure to media
Exposure to media numbs people to pain of others
Inflated expectations of success, borne of celebrity "reality
shows," and a social environment that works against listening to
someone who needs sympathy
Today’s Empathy Deficit
Empathy and Creativity

38. Carlozzi (et.al.) (1995). “Empathy as Related to Creativity,
Dogmatism, and Expressiveness”. Journal of Psychology, 129:4
Question: What is the relationship b/w creativity, dogmatism
and empathy?
56 graduate students administered the Affective Sensitivity
Scale, Statement of Past Creative Activities, and Opinion Scale
Results: Empathy is positively related to creativity and
inversely related to dogmatism
Empathy & Creativity
Growing body of research in creativity suggests empathy
enables better:
Perspective taking (McLeod et al., 1996)
Problem Finding/ Perception (Wakefield, 1991)
Openness to Experience (Parker, Atkins, & Axtell, 2008)
Why the relationship?

39. Empathize with others/ w/ your audience

40. “If I had asked people what they wanted, they would have said
faster horses.”
Henry Ford, Founder, Ford motor company
Empathy and Design
Who/where is your audience/user?
How are people feeling/hurting?
What are people really needing/wanting/ or missing out on?
What are people’s goals/motivations/ aspirations/ and/or fears?
Creative Performance grounding in an understanding of others.
Why?
Precise way of thinking about
how your target audience behaves
their motivations
how they think
what they wish to accomplish (goals)
why they want to do what they do
Designing towards the target user/audience
Personas

41. “People don’t buy the what of an idea… they buy the why of an
idea”
“People don’t buy what you do… they buy why you do it”
vision

42. Getting people excited: The Golden Triangle and
the power of “Why”
Start With Why: How Great Leaders Inspire Everyone to Take
Action (2009)
People are inspired to act/give/buy by sense of purpose (or
‘why”)
Why should come first (over how and what)
The “Golden Circle”
Simon Sinek’s Golden Circle
Simon Sinek
The Golden Circle + The Cone
Leadership- establishing the ‘why’ (vision)

43. How: Planning and organizing to bringing it to life
What: Actually making it tangible (doing it)
The Golden Circle is not just a communication tool; it also
provides some insight into how great organizations are
organized. If we we imagine The Golden Circle as a 3
dimensional model, it’s a top down view of a cone…a
megaphone.
The megaphone represents a company or an organization - an
inherently organized system. At the top of the system,
representing the Why, is a leader. The next level down, the How
level, typically includes the senior executives who are inspired
by the leader’s vision and work to bring it to life. The Whats at
the bottom of the cone are the things the company says and does
that breathe life into the Why. They make it tangible. Through
everything they say and do, an organization can clearly
communicate its Why to the world; the marketing, the products
and services the company provides…everything.
Just like a megaphone, for a message to spread, it must be loud
AND clear.
Loud is easy, just drive sales or buy marketing. Clear is harder.
When an organization is clear about its purpose or its WHY,
everyone, from employees to customers, can understand it. This
clarity allows everyone who interacts with the organization to
become champions of the cause. Ideally, this clarity starts at the
top of the organization and moves through the company and
inspires every person, every product, service and piece of
marketing that comes out the bottom of the megaphone. When
everything you say and do echoes what you believe, you end up

44. with a message that’s loud AND clear.
34
They work/practice properly… and much, much, much more
than most of us.
Ellen Winner,
(1996) “Rage to Master: The Role of Talent in the Visual Arts”
Intrinsic motivation (performing an action because you enjoy
the activity itself) of gifted and talented children to master an
area of interest
Obsessive in nature, driving child to focus intensely on that
subject matter; voraciously consume new information and skills
A child would happily spend whole days at a time focusing on
their chosen domain.
The “Rage to Master” a Domain
Herbert Simon and William Chase (1973) Study of Chess:
“There are no instant experts in chess… where a person reached
grandmaster level with less than about a decade’s intense
preoccupation with the game. We would estimate, very roughly,
that a master has spent perhaps 10,000 to 50,000 hours staring

45. at chess positions…”
Rage to… practice
Practice
Act of rehearsing a behavior over and over, or engaging in an
activity again and again, for the purpose of improving or
mastering it,
Deliberate Practice
Improve efficiency of expertise acquisition, therefore speeding
up the rate of skill acquisition
Practicing complex tasks that produce errors
Errors provide the learner with rich feedback that results in
scaffolding for future performance
Feedback from an expert that allows for successful
approximation of the target performance (minimize errors and
frustration that result from trial-error)
Practice & Deliberate Practice
K. Anders Ericsson,
Swedish Psychologist & Professor
“The Role of Deliberate Practice in the Acquisition of Expert
Performance (1993)
Study of young pianists and violinists at the Music Academy of
West Berlin.
Findings:
DELIBERATE PRACTICE is key difference between a) most
outstanding, b) very good, and c) future music teachers

46. The most outstanding violinists, on average, practiced MUCH
more than the good ones.
“Individual differences in ultimate performance can largely be
accounted for by differential amounts of past and current levels
of deliberate practice."
Deliberate Practice- A Key Different
Duckworth, A. (2016). Grit: The Power of Passion and
Perseverance.
Grit Scale
Grit’s two components:
Passion: consistency of intrinsic motivation towards one
goal/philosophy/behaviour over time
Perseverance: quiet determinism to stick to a course once
decided upon
Findings:
Grittier adults more likely attain a higher level of education.
Grittier individuals more likely stick it out in the same career.
Grit correlated with the GPA of college students
Grit increased the likelihood that a cadet would make it
through military training
“Passion” as a Driver of “Perseverance”

47. Four areas of focus:
Interest: passion and intrinsic enjoyment
What do I love to do? What do I really care about? What
matters most to me? How do I want to spend my time?
Practice: Daily discipline to get better in domain of which you
are passionate
Are my ‘stretch goals’ clearly defined ( radical expectations
that go beyond current capabilities and performance)? Am I
engaging in ‘deliberate practice’? Am I receiving feedback?
Am I repeating talent/skill with continuous reflection and
refinement (trial/error for improvement)?
Purpose: Conviction that what you’re doing matters to
others/the world
Are you reflecting on how the work your passionate
about/already doing is meaningful? How does it contribute to
society? Why it’s ‘bigger than yourself’?
Hope/Growth Mindset: the belief that you have the power to
make a difference; make things better
Do you expect your own efforts to change/ improve the future?
Do you believe you can adapt, overcome, and grow in the face
of adversity?
Improving “Grit”
They’ve honed certain behavioural skills related to to success

48. Cognitive Skills:
Associational Thinking: Brain’s ability to synthesize novel
inputs to make connections across seemingly unrelated
ideas/concepts
Behavioural Skills:
Questioning: Queries that challenge status quo
Observing: Attending to details of the world around them
Networking: Exploring ideas within radically diverse network
of individuals
Experimenting: Constantly trying out new experiences/ piloting
& tinkering w/ new ideas/projects
5 Discovery Skills of Innovator’s DNA
Our ability to innovative is function of our minds AND of our
behaviors.
By changing our behaviors and regularly incorporating these
“discovery skills” into our daily lives, we can improve our
innovation aptitude.
FIND A MENTOR/ROLE MODELS: Many of the Innovators
cited in the study described how they acquired innovation skills
from role models who made it "safe" as well as exciting to
discover new ways of doing things
The Innovator’s DNA

49. Habits and Behaviours
Practice vs. Deliberate Practice
Vision
Empathy
Grit (Passion + Perseverance)
Associational Thinking
Questioning
Observing
Networking
Experimenting
Recap
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Purpose of the Unit: This week’s unit means to introduce you to
the concept of ‘innovation’ as something discrete (but
connected) to ‘creativity’. Here, we will explore the different
forms and types of ‘innovation’ as well as exploring the
argument that the study and practice of ‘
creativity isn’t enough’. My hope is that, through this
unit, students will learn to appraise the relation between
creativity and innovation and begin to identify and develop their
innovation skillset (as a necessary compliment to their acquired
skills in creativity). I’ll be interested to see what your thoughts
are on these arguments and ideas.
Purpose of the Unit: This week’s unit means to introduce you
the literature on the traits, habits and behaviours of the ‘great
innovator’. Here, specifically, I will introduce you to the
concept of the “Innovator’s DNA”; as developed by Dyer,
Gregerson, and Christensen. We will explore both the cognitive
and behavioural traits associated with ‘high-innovators’. The
understandings offered here set the stage for some useful
practices students might use to develop their own innovation
potential. Additionally, this unit serves as a cornerstone for the
upcoming “Role Model Assignment”.

52. BEST OF HBR
1963
Are great ideas
destroying your
company?
Creativity Is
Not Enough
by Theodore Levitt
Ted Levitt, a former editor of HBR and one ofthe most incisive
commentators
on innovation to have appeared in our pages, takes dead aim at
the assumption
that creativity is superior to conformity. He argues that
creativity as it's com-
monly defined-the ability to come up with brilliantly novel
ideas-can actually
be destructive to businesses. By failing to take into account
practical matters
of implementation, big thinkers can inspire organizational

53. cultures dedicated
to abstract chatter rather than purposeful action. In such
cultures, innovation
never happens-because people are always talking about it but
never doing it.
Often, the worst thing a company can do, in Levitt's view, is put
innovation
into the hands of "creative type5"-those compulsive idea
generators
whose distaste for the mundane realities of organizational life
renders
them incapable of executing any real project. Organizations, by
their very
nature, are designed to promote order and routine; they are
inhospitable
environments for innovation. Those who don't understand
organizational
realities are doomed to see their ideas go unrealized. Only the
organizational
insider-the apparent conformist-has the practical intelligence to
overcome
bureaucratic impediments and bring a good idea to a fruitful
conclusion.
"CREATIVITY" is not the miraculous road

54. to business growth and affluence that is
so abundantly claimed these days. And
for the line manager, particularly, it may
be more ofa millstone than a milestone.
Those who extol the liberating virtues of
corporate creativity over the somnam-
bulistic vices of corporate conformity
may actually be giving advice that in
the end will reduce the creative anima-
tion of business. This is because they
tend to confuse the getting of ideas with
their implementation-that is, confuse
creativity in the abstract with practical
innovation; not understand the operat-
ing executive's day-to-day problems; and
underestimate the intricate complexity
of business organizations.
The trouble with much ofthe advice
business is getting today about the need
to be more vigorously creative is, essen-
tially, that its advocates have generally
failed to distinguish between the rela-
tively easy process of being creative in
the abstract and the infinitely more
difficult process of being innovationist
in the concrete. Indeed, they misdefine
"creativity" itself. Too often, for them,
THE INNOVATIVE ENTERPRISE AUGUST 2002 137
BEST OF HBR

55. "creativity" means having great, origi-
nal ideas. Their emphasis is almost all on
the thoughts themselves. Moreover, the
ideas are often judged more by their
novelty than by their potential useful-
ness, either to consumers or to the com-
pany. In this article, 1 shall show that in
most cases, having a new idea can be
"creative" in the abstract but destruc-
tive in actual operation, and that often
instead of helping a company, it will
even hinder it.
Suppose you know two artists. One
tells you an idea for a great painting,
but he does not paint it. The other has
the same idea and paints it. You could
easily say the second man is a great cre-
ative artist. But could you say the same
thing of the first man? Obviously not.
He is a talker, not a painter.
That is precisely the problem with so
much of today's pithy praise of creativ-
ity in business-with the unending fiow
of speeches, books, articles, and "cre-
ativity workshops" whose purpose is to
produce more imaginative and creative
managers and companies. My observa-
tions of these activities over a number
of years lead me firmly to this conclu-
sion. They mistake an idea for a great
painting with the great painting itself.
They mistake brilliant talk for construc-
tive action.

56. But, as anybody who knows anything
about any organization knows only too
well, it is hard enough to get things
done at all, let alone to introduce a new
way of doing things, no matter how
good it may seem. A powerful new idea
can kick around unused in a company
for years, not because its merits are not
recognized but because nobody has as-
sumed the responsibility for convert-
ing it from words into action. Vtfhat is
often lacking is not creativity in the
Theodore Levitt, a longtime professor
of marketing at Harvard Business School,
is now professor emeritus. He is the author
of numerous HBR articles. His most re-
cent books are Thinking About Manage-
ment (1990) and The Marketing Imagi-
nation (1986), both from Free Press.
idea-creating sense but innovation in
the action-producing sense, i.e., putting
ideas to work.
Ideas Are Not Enough
Why don't we get more innovation?
One ofthe most repetitious and, I am
convinced, most erroneous answers we
get to this question is that businessmen
are not adequately creative and that
they are enslaved by the incubus of con-
formity. It is alleged that everything in
American business would be just dandy
if industry were simply more creative

57. and if it would hire more creative peo-
ple and give them the chance to show
their fructifying stuff.
But anybody who carefully looks
around in any modem business organi-
zation and speaks freely and candidly
with the people in it will, 1 believe,
discover something very interesting:
namely, there is really very little short-
age of creativity and of creative people
in American business. The major prob-
lem is that so-called creative people
often (though certainly not always) pass
off on others the responsibility for get-
ting down to brass tacks. They have
plenty of ideas but little businesslike
follow-through. They do not make the
right kind of effort to help their ideas
get a hearing and a try.
All in all, ideation is relatively abun-
dant. It is its implementation that is
more scarce.
Many people who are full of ideas
simply do not understand how an or-
ganization must operate in order to get
things done, especially dramatically
new things. AU too often, there is the
peculiar underlying assumption that
creativity automatically leads to actual
innovation. In the crippled logic of this
line of thinking, ideation (or creativity,
if you emphasize the idea-producing
aspect of that term) and innovation are

58. treated as synonyms. This kind of think-
ing is a particular disease of advocates
of "brainstorming," who often treat
their approach as some sort of ultimate
business liberator.' Ideation and inno-
vation are not synonyms. The former
deals with the generation of ideas; the
latter, with their implementation. It is
the absence of a constant awareness of
this distinction that is responsible for
some ofthe corporate standpattism we
see today. (Lest there be any confusion,
it is not essential that innovation be suc-
cessfully implemented to qualify as in-
novation. The object ofthe innovation is
success, but to require in advance that
there be no doubt of its success would
disable its chance of ever getting tried.)
The fact that you can put a dozen in-
experienced people into a room and
conduct a brainstorming session that
produces exciting new ideas shows how
little relative importance ideas them-
selves actually have. Almost anybody
with the intelligence of the average
businessman can produce them, given
a halfway decent environment and stim-
ulus. The scarce people are those who
have the know-how, energy, daring, and
staying power to implement ideas.
Whatever the goals of a business may
be, it must make money. To do that, it

59. must get things done. But having ideas
is seldom equivalent to getting things
done in the business or organizational
sense. Ideas do not implement them-
selves - neither in business nor in art,
science, philosophy, politics, love, war.
People implement ideas.
A Form of Irresponsibility
Since business is a uniquely "get things
done" institution, creativity without
action-oriented follow-through is a
uniquely barren form of individual
behavior. Actually, in a sense, it is even
irresponsible. This is because: (1) The
creative man who tosses out ideas and
138 HARVARD BUSINESS REVIEW
Creativity ts Not Enough
does nothing to help them get imple-
mented is shirking any responsibility
for one of the prime requisites of the
business, namely, action; and (2) by
avoiding follow-through, he is behaving
in an organizationally intolerable-or,
at best, sloppy-fashion.
The trouble with much creativity
today, in my observation, is that many
of the people with the ideas have the
peculiar notion that their jobs are fin-
ished once the ideas have been sug-

60. gested. They believe that it is up to
somebody else to work out the dirty
details and then implement the pro-
posals. Typically, the more creative the
man, the less responsibility he takes for
action. The reason is that the genera-
tion of ideas and concepts is often his
sole talent, his stock-in-trade. He seldom
has the energy or staying power, or in-
deed the interest, to work with the
grubby details that require attention be-
fore his ideas can be implemented.
Anybody can verify this for himself.
You need only to look around in your
own company and pick out the two or
three most original idea men in the
vicinity. How many of their ideas can
you say they have ever vigorously and
systematically followed through with
detailed plans and proposals for their
implementation-even with only some
modest, ballpark suggestions of the
risks, the costs, the manpower requi-
sites, the time budgets, and the possible
payout?
The usual situation is that idea men
constantly pepper everybody in the or-
ganization with proposals and memo-
randa that are just brief enough to get
attention, to intrigue, and to sustain in-
terest-but too short to include any re-
sponsible suggestions regarding how
the whole thing is to be implemented
and what's at stake. In some instances it

61. must actually be inferred that they use
novel ideas for their disruptive or their
self-promotional value. To be more
specific:
One student of management succes-
sion questions whether ideas are al-
ways put forth seriously. He suggests
that often they may simply be a tacti-
cal device to attract attention in order
to come first to mind when promo-
tions are made. Hence, ideas are a
form of "public relations" within the
organization.^
it should be pointed out, however,
that something favorable can be said
about the relationship of irresponsibil-
ity to ideation. The generally effective
executive often exhibits what might be
called controlled momentary irrespon-
sibility. He recognizes that this attitude
is virtually necessary for the free play of
imagination. But what distinguishes
him is his ability to alternate appropri-
ately between attitudes of irresponsibil-
ity and responsibility. He doesn't hold to
the former for long - only long enough
to make himself more productive.
Psychology of the
"Creative Type"
The fact that a consistently highly cre-
ative person is generally irresponsible
in the way I have used the term is in

62. part predictable from what is known
about the freewheeling fantasies of very
young children:
They are extremely creative, as any
kindergarten teacher will testify. They
have a naive curiosity which stumps
parents with questions like: "Why can
you see through glass?" "Why is there
a hole in a doughnut?" "Why is the
grass green?" It is this kind of ques-
tioning attitude that produces in
them so much creative freshness. Yet
the unique posture of their lives is
their almost total irresponsibility
from blame, work, and the other
routine necessities of organized soci-
ety. Even the law absolves them from
responsibility for their actions. But
all sources testify to childrens' cre-
ativity, even Biblical mythology with
its assertion about wisdom issuing
from "the mouths of babes." More
THE INNOVATIVE ENTERPRISE AUGUST 2002 139
BEST OF HBR
respectable scientific sources have
paralleled the integrative mechanism
of adult creativity with the childhood
thought process that "manifests itself
during the preschool period - pos-
sibly as early as the appearance of

63. three-word sentences..."^
Clinical psychologists have also illus-
trated what I call the irresponsibility of
creative individuals in Rorschach and
stroboscopic tests. For example:
One analyst says,"Those who took to
the Rorschach like ducks to water, who
fantasied and projected fi:eely, even too
freely in some cases, or who could per-
mit themselves to tamper with the form
of the blot as given, gave us our broad-
est ranges of movement""' In short, they
were the least "form-bound," the least
inhibited by the facts of their experi-
ence, and hence let their minds explore
new, untried, and novel alternatives to
existing ways of doing things.
The significance of this finding for the
analysis of organizations is pointed up
by the observation of another psychol-
ogist that "the theoreticians on the
other hand do not mind living danger-
ously."̂ The reason is obvious. A theo-
retician is not immediately responsible
for action. He is perfectly content to live
dangerously because he does so only on
the conceptual level, where he cannot
get hurt. To assume any responsibility
for implementation is to risk dangerous
actions, and that can be painfully un-
comfortable. The safe solution is to steer
clear of implementation and ail the
dirty work it implies.

64. The Advice Business
It is to be expected, therefore, that
today's most ardent advocates of cre-
ativity in business tend to be profes-
sional writers, consultants, professors,
and often advertising agency executives.
Not surprisingly, few of these people
have any continuing day-to-day respon-
sibility for the difficult task of imple-
menting powerful new business ideas
of a complex nature in the ordinary
type of business organization. Few of
them have ever had any responsibility
for doing work in the conventional kind
of complex operating organization.
They are not really practicing business-
men in the usual sense. They are literary
businessmen. They are the doctors who
say,"Do as I say, not as I do,"reminiscent
ofthe classic injunction ofthe boxer's
manager, "Get in there and fight. They
can't hurt us."
The fact that these people are also so
often outspoken about the alleged viru-
lence of conformity in modern business
is not surprising. They can talk this way
because they have seldom
had the nerve to expose
themselves for any substan-
tial length of time to the
rigorous discipline of an
organization whose prin-
cipal task is not talk but ac-

65. tion, not ideas but work.
Impressive sermons are
delivered gravely proclaim-
ing the virtues of creativity and the vices
of conformity. But so often the authors
of these sermons, too, are "outsiders" to
the central sector ofthe business com-
munity. Thus, the best-known asserters
that American industry is some sort of
vast quagmire of quivering confor-
mity - the men who have tumed the
claim into a tiresome cliche-are peo-
ple like William H. Whyte, jr., author
of The Organization Man,'' who is a pro-
fessional writer; Sloan Wilson, author
of The Man in the Cray Flannel Suit,'
who was a college English professor
when he wrote the book; and C. North-
cote Parkinson (more on him later), also
a professor.
Actually, it is not totally fair to con-
demn this gratuitous crusade of consul-
tants, writers, professors, and the like.
American business appears generally
to benefit from their existence. Harm is
done, however, when the executive fails
to consider that the very role of these
men absolves them from managerial
responsibility. It is hard to accept un-
critically the doleful prophesy that so
many U.S. companies are hypnotically
following each other in a deadly con-
formist march into economic oblivion.

66. It is hard to accept the tantalizing sug-
gestion that their salvation lies so easily
in creativity and that from this will au-
tomatically flow profit-building innova-
tion. Perhaps the source of these sug-
gestions should be kept in mind.
The Chronic Complainers
As I have already said, ideation is not a
synonym for innovation, conformity is
not its simple antonym, and innovation
is not the automatic consequence of
"creative thinking." Indeed, what some
people call conformity in business is less
related to the lack of abstract creativity
than to the lack of responsible action,
whether it be the implementation of
new or old ideas.
The proof of this is that in most busi-
ness organizations, the most continually
creative men in the echelons below the
executive level-men who are actively
discontent with the here and now and
140 HARVARD BUSINESS REVIEW
Creativity Is Not Enough
are full of suggestions about what to
do about it-are also generally known
as corporate malcontents. They tend to
be complaining constantly about the
standpat senility ofthe management,

67. about its refusal to see the obvious facts
of its own massive inertia. They com-
plain about management refusing to
do the things that have been suggested
to it for years. They often complain that
management does not even want cre-
ative ideas, that ideas rock the boat
(which they do), and that management
is interested more in having a smoothly
running (or is it smoothly ruining?)
organization than in a rapidly forward-
vaulting business.
In short, they talk about the company
being a festering sore of deadly confor-
mity, full of decaying vegetables who
systematically oppose new ideas with
the old ideologies. And then, of course,
they frequently quote their patron saint,
William H. Whyte, Jr., with all his mis-
informed moralizing and his conjectural
evidence about what goes on inside an
operating organization. (Whyte's fanci-
ful notions of such operations have re-
cently been demolished by the careful
studies ofthe veteran student of social
organization W. Lloyd Warner in his
The Corporation in the Emergent Ameri-
can Society.'^)
Why Doors Are Closed
The reason the creative malcontent
speaks this way is that so often the peo-
ple to whom he addresses his flow of
ideas do, indeed, after a while, ignore
him and tell him to go away. They shut

68. their doors to his endless entreaties;
they refuse to hear his ideas any longer.
Why? There is a plausible explanation.
The reason the executive so often re-
jects new ideas is that he is a busy man
whose chief day-in, day-out task is to
handle an ongoing stream of problems.
He receives an unending flow of ques-
tions on which decisions must be made.
Constantly he is forced to deal with
problems to which solutions are more
or less urgent and the answers to which
are far from clear-cut. It may seem
splendid to a subordinate to supply his
boss with a lot of brilliant new ideas
to help him in his job. But advocates of
creativity must once and for all under-
stand the pressing facts of the execu-
tive's life: Every time an idea is submit-
ted to him, it creates more problems for
him - and he already has enough.
My colleague. Professor Raymond A.
Bauer, has pointed out an instructive
example from another field of activity.
He notes that many congressmen and
senators have the opportunity to have
a political science intern assigned to
"help" them. However, some congress-
men and senators refuse this "help" on
the grounds that these interns generate
so many ideas that they disrupt the leg-
islator's regular business.

69. Making Ideas Useful
Yet innovation is necessary in business-
and innovation begins with somebody's
proposal. What isthe answer for the man
with a new idea? I have two thoughts
to offer:
1. He must work with the situation as it
is. Since the executive is already con-
stantly bombarded with problems, there
is little wonder that after a while he
does not want any more new ideas. The
"idea man" must leam to accept this as
a fact of life and act accordingly.
2. When he suggests an idea, the re-
sponsible procedure is to include at least
some minimal indication of what it in-
volves in terms of costs, risks, manpower,
time, and perhaps even specific people
who ought to carry it through. That /5 re-
sponsible behavior, because it makes
it easier for the executive to evaluate
the idea and because it raises fewer
problems. That /5 the way creative think-
ing will more likely be converted into
innovation.
It will be argued, of course, that to
saddle the creative individual with the
responsibility of spelling out the details
of implementation would curb or even
throttle his unique talent. This is proba-
bly true. But this could be salutary, both
for him and for the company. Ideas are
useless unless used. The proof of their

70. value is their implementation. Until
then they are in limbo. If the executive's
job pressures mean that an idea seldom
gets a good hearing unless it is respon-
sibly presented, then the unthrottled
and irresponsible creative man is use-
less to the company. If an insistence
on some responsibility for implemen-
tation throttles him, he may produce
fewer ideas, but their chances of a judi-
cious hearing and therefore of being
followed through are greatly improved.
The company will benefit by trying the
ideas, and the creative man will benefit
by getting the satisfaction of knowing
he is being listened to. He will not have
to be a malcontent any more.
Deciding Factors
This is not to suggest that every idea
needs a thoroughly documented study
before it is mentioned to anyone. Far
from it. What is needed will vary from
case to case depending on four factors:
The Position or Rank ofthe Idea Orig-
inator in the Organization. How "re-
sponsible" a man needs to act for an
idea to get a hearing clearly depends
on his rank.
The powerful chief executive officer
can simply instruct subordinates to take
and develop one of his ideas. That is
enough to give it a hearing and perhaps

71. even implementation. To that extent,
talk (5 virtually action. Similarly, the
head of a department can do the same
thing in his domain. But when the ideas
fiow in the opposite direction - upward
instead of downward-they are unlikely
to fiow unless they are supported by
the kind of follow-through 1 have been
urging.
The Complexity ofthe Idea. The more
complex and involved the implications
of an idea, and the more change and
rearrangement it may require within
the organization or in its present way of
doingthings,then obviously the greater
is the need to cover the required ground
in some responsible fashion when the
proposal is presented.
But I do not suggest that the "how
to" questions need to be covered as
THE INNOVATIVE ENTERPRISE AUGUST 2002 141
BEST OF HBR
thoroughly and carefully as would be
required by, say, a large corporation's
executive committee when it finally de-
cides whether to implement or drop the
suggestion. Such a requirement would
be so rigid that it might dry up all ideas
because their originators simply would

72. not have the time, competence, or staff
help to go to that much effort.
The Nature ofthe Industry. How much
supporting detail a subordinate should
submit along with his idea ofren de-
pends on the industry involved and the
intent of the idea.
One reason there is such a high pre-
mium put on "creativity" in advertising
is because the first requisite of an ad is
to get attention. Hence "creativity" fre-
quently revolves around the matter of
trying to achieve visual or auditory im-
pact such that the ad stands out above
the constantly expanding stream of ad-
vertising noise to which the badgered
consumer is subjected. To this extent,
in the advertising industry, being "cre-
ative" is quite a different thing, by and
large, from what it is, say, in the steel in-
dustry. Putting an eye patch on the man
in the Hathaway shirt is "no sooner said
than done." The idea is virtually syn-
onymous with its implementation. But
Many people who are full of ideas simply
do not understand how an organization
must operate to get things done.
in the steel industry, an idea, say, to
change the discount structure to en-
courage users of cold, rolled sheet steel

73. to place bigger but fewer orders is so
full of possible complications and prob-
lems that talk is far from being action or
even a program for action. To get even
a sympathetic first hearing, such an idea
needs to be accompanied by a good deal
of factual and logical support.
The Attitude and Job ofthe Person to
Whom the Idea Is Submitted. Everybody
knows that some bosses are more re-
ceptive to new ideas than others. Some
are more receptive to extreme novelty
than others. The extent of their known
receptiveness will in part determine the
elaborateness of support a suggested
new idea requires at its original stage.
But, equally important, it is essential
to recognize that the greater the pres-
sures of day-to-day operating responsi-
bilities on the executive, the more resis-
tance he is likely to have to new ideas. If
the operating burden happens to fall on
him, his job is to make the present setup
work smoothly and well. A new idea re-
quires change, and change upsets the
smooth (or perhaps faltering) regularity
of the present operation on whose ef-
fectiveness he is being judged and on
which his career future depends. He has
very good reason to be extremely care-
ful about a new proposal. He needs lots
of good risk-reducing reasons before he
will look at one very carefully.

74. What his actual requirements are
will also depend on the attitudes of his
superiors to risk taking and mistakes. In
one company I am famihar with, the
two most senior officers have a unique
quality of enormous receptivity to nov-
elty - sometimes the wilder the pro-
posal, the better. The result is that new
ideas, no matter how vaguely stated
or extreme, get sym-
pathetic and quick
hearings throughout
all levels of the com-
pany. But this is a rare
organization for two
reasons.
First, the chairman
is now about 40 years old. He became
president when he was 28, having been
selected by his predecessor as the heir
apparent when he was about 24. He
vaulted quickly from one top job to
another, never really having to spend
very much time "making good" in the
conventional sense in a difficult day-to-
day operating job at a low level. Virtu-
ally his entire career was one of high-
level responsibility where his ideas
could be passed down to a corps of sub-
ordinates for detailed examination and
evaluation. These experiences taught
him the value of wild ideation without

75. his having to risk his rise to the top
by seeming to suggest irresponsible
projects.
Second, the present president of this
same company came in as a vice presi-
dent, also at 28, and directly from an ad-
vertising agency. His career experiences
were similar to the chairman's.
It is easy for both of these men to be
permissive, in part because they have
never really had to risk their climb up
the hierarchical ladder by seeming to
shoot wild. They always had teams of
subordinates to check their ideas and
willing superiors to listen to them. Any-
body who has not had this history or
conditioning will find it extremely hard
to change once he gets very far up the
corporate pecking order.
ln short, a pemiissive,open, risk-taking
environment cannot be created simply
by the good intentions ofthe top man-
agement. The reason is either that high-
level executives who have got to their
top posts by a lifetime of judicious ex-
ecutive behavior are incapable of chang-
ing their habits or that, if their habits
are changed, their subordinates will not
believe they really mean it. And in lots
of small ways, they see the Justifica-
tion of their disbeliefs.
Need for Discipline

76. Writers on the subject of creativity and
innovation invariably emphasize the es-
sential primacy ofthe creative impulse
itself. Almost as an afterthought they
talk about the necessity of teaching
people to sell their ideas and of stim-
ulating executives to listen to the ideas
of subordinates and peers. Then they
ofren go on casually to make some "do-
gooder" statement about the impor-
tance of creating a permissive organi-
zational climate for creative people.
They rarely try to look at the executive's
job and suggest how the creative genius
might alter his behavior to suit the
boss's requirements. It is always the boss
who is being told to mend his ways. The
reason for their one-sided siding with
the creative man is that they are ofren
142 HARVARD BUSINESS REVIEW
Creativity Is Not Enough
hostile, just as he is, to the idea of "the
organization" itself. They actively dis-
like organizations, but they seldom
know exactly why.
I think 1 know the reason. It is that
organization and creativity do not
seem to go together, while organiza-
tion and conformity do. Advocacy of a
"permissive environment" for creativ-

77. ity in an organization is often a veiled
attack on the idea ofthe organization
itself. This quickly becomes clear when
one recognizes this inescapable fact:
One of the collateral purposes of an
organization is to be inhospitable to a
great and constant flow of ideas and
creativity.
Whether we are talking about the
U.S. Steel Corporation or the United
Steelworkers of America, the U.S. Army
or the Salvation Army, the United
States or the U.S.S.R., the purpose of
organization is to achieve the kind and
degree of order and conformity neces-
sary to do a particular job. The organi-
zation exists to restrict and channel the
range of individual actions and behavior
into a predictable and knowable rou-
tine. Without organization there would
be chaos and decay. Organization exists
in order to create that amount and kind
of inflexibility that are necessary to get
the most pressingly intended job done
efficiently and on time.
Creativity and innovation disturb that
order. Hence, organization tends to be
inhospitable to creativity and innova-
tion, though without creativity and in-
novation it would eventually perish.
That is why small, one-man shops are
so often more animated and "innova-
tionary" than large ones. They have vir-
tually no organization (precisely because

78. they are one-man shops) and often are
run by self-willed autocrats who act on
impulse.
Organizations are created to achieve
order. They have policies, procedures,
and formal or powerfully informal (un-
spoken) rules. The job for which the or-
ganization exists could not possibly get
done without these rules, procedures,
and policies. And these produce the
so-called conformity that is so blithely
deprecated by the critics of the organi-
zation and life inside it.
Parkinson's Flaw
It is not surprising that C. Northcote
Parkinson and his Parkinson's Law enjoy
such an admiring following among
teachers, writers, consultants, and pro-
fessional social critics. Most of these
people have carefully chosen as their
own professions work that keeps them
him probably is too paranoid to be
tmsted with a responsible job. But most
of today's blithe cartoonists of the or-
ganization would be impoverished for
material were they not blessed with an
enormous ignorance ofthe facts of orga-
nizational life. Let me put it as emphat-
ically as I can. A company cannot func-
tion as an anarchy. It must be organized,
it must be routinized, it must be planned
in some way in the various stages of its

79. operation. That is why we have so many
Advocates of creativity must understand the pressing facts
of the executive's life: Every time an idea is submitted to him,
it creates more problems for him - and he already has enough.
as far as modem society lets anyone get
from the rigorous taskmaster of the
organization. Most of them more or less
lead a sort of one-man, self-employed
existence in which there are few make-
or-break postmortems oftheir activities.
They live pretty much in autonomous
isolation. Many of them, I suspect, have
avoided life in the organization because
they are incapable of submitting to its
rigid discipline. Parkinson has provided
them a way in which they can laugh at
the majority, who do submit to the or-
ganization, and feel superior rather than
oppressed, as minorities usually do.
It is also not surprising (indeed it is
quite expected) that Parkinson himself
should be anything but an organization
man-that he is a teacher of history, a
painter, and, of all things, a historian
on warfare in the Eastem Seas. This is
about as far as you can get from the
modern landbound organization. Par-
kinson's vmtings have in recent years
brought him into such continuing con-
tact with business that he has now de-
cided to go into business himself. In

80. doing so, he has proved the truth of all
that I have been saying: The business
he has decided to enter is, of course, the
consulting business!
Parkinson is very entertaining. The
executive who carmot laugh along with
organizations of so many different
kinds. And to the extent that operations
planning is needed, we get rigidity,
order, and therefore some amount of
conformity. No organization can have
everybody running off uncoordinated
in several different directions at once.
There must be rules and standards.
Where there are enough rules, there
will be damn fool rules. These can be
mercilessly cartooned. But st̂ me rules
which to an expert on ancient naval his-
tory look ftx>lish are far from foolish if
he bothers to leam about the problems
of the business, or the government, or
whatever group the particular organi-
zation is designed to deal with.
From Creativity
to Innovation
All this raises a seemingly frightening
question. If conformity and rigidity are
necessary requisites of organization,
and if these in turn help stifle creativ-
ity, and furthermore if the creative man
might indeed be stifled if he is required
to spell out the details needed to con-

81. vert his ideas into effective innovations,
does all this mean that modem organi-
zations have evolved into such invo-
luted monsters that they must suffer the
fearful fate ofthe dinosaur-too big and
unwieldy to survive?
THE INNOVATIVE ENTERPRISE AUGUST 2002 143
BEST OF HBR
The answer to this is no. First, it is
questionable whether the creative im-
pulse would automatically dry up if the
idea man is required to take some re-
sponsibility for follow-through. The peo-
ple who so resolutely proclaim their
own creative energy will scarcely assert
that they need a hothouse for its fiow-
ering. Secondly, the large organization
Ideas are useless unless used. The proof
of their value is their implementation.
Until then they are in limbo.
has some important attributes that ac-
tually facilitate innovation. Its capacity
to distribute risk over its broad eco-
nomic base and among the many indi-
viduals involved in implementing new-
ness are significant. They make it both
economically and, for the individuals

82. involved, personally easier to break un-
tried ground.
What ofren misleads people is that
making big operating or policy changes
requires also making big organizational
changes. Yet it is precisely one of the
great virtues of a big organization that,
in the short run at least, its momentum
is irreversible and its organizational
structure is, for all practical purposes,
nearly impenetrable. A vast machinery
exists to get a certain job done. That job
must continue to get the toughest kind
of serious attention, no matter how
exotically revolutionary a big operating
or policy change may be. The boat can
and may have to be rocked, but one
virtue of a big boat is that it takes an
awful lot to rock it. Certain people or
departments in the boat may feel the
rocking more than others and to that
extent strive to avoid the incidents
that produce it. But the built-in stabiliz-
ers of bigness and of group decision
making can be used as powerful infiu-
ences in encouraging people to risk these
incidents.
Finally, the large organization has an
organizational alternative to the alleged
"conservatizing" consequences of big-
ness. There is some evidence that the
relatively rigid organization can build
into its own structure certain flexibilities

83. which would provide an organizational
home forthe creative but irresponsible
individual. What may be required, es-
pecially in the large organization, is not
so much a suggestion-box system as a
specialized group whose
function is to receive ideas,
work them out, and follow
them through in the nec-
essary manner. This would
be done afrer the group
has evaluated each idea
and, preferably, spoken at
length with its originator. Then when
the idea and the necessary follow-
through are passed on to the appro-
priate executive, he will be more willing
to listen. To illustrate:
• An organizational setup that approxi-
mates this structure has been estab-
lished in the headquarters Marketing
Department ofthe Mobil Oil Company.'
• A similar approach exists at the Scher-
ing Corporation under the name Man-
agement R&D. Its purpose is to nur-
ture and develop new ideas and new
methods of decision making.'"
• Another suggestion which takes less
solidly tangible organizational form in
practice has been made by Murray D.
Lincoln, president of Nationwide In-

84. surance Company. He makes a plea for
the notion of a company having a Vice
President in Charge of Revolution.^'
Beyond these, the problems and
needs of companies differ. To this ex-
tent, they may have to find their own
special ways of dealing with the issues
discussed in this article. The important
point is to be conscious of the possible
need or value of some system of making
creativity yield more innovation.
Some companies have greater need
for such measures than others have.
And, as pointed out earlier, the need
hinges in part on the nature of the in-
dustry. Certainly it is easier to convert
creativity into innovation in the adver-
tising business than it is in an operating
company with elaborate production
processes, long channels of distribution,
and a complex administrative setup.
For those critics of and advisers to
U.S. industry who repeatedly call for
more creativity in business, it is well to
try first to understand the profound dis-
tinction between creativity and innova-
tion and then perhaps to spend a little
more time calling on creative individu-
als to take added responsibility for im-
plementation. The fi:iictifying potentials
of creativity vary enormously with the
particular industry, with the climate in

85. the organization, with the organiza-
tional level of the idea man, and with
the kinds of day-in, day-out problems,
pressures, and responsibilities of the
man to whom he addresses his ideas.
Without clearly appreciating these facts,
those who declare that a company will
somehow grow and prosper merely by
having more creative people make a
fetish of their own illusions. ^
1. See, for instance, Alex F. Osbom, Applied Imagi-
nation: Principles and Procedures of Creative Think-
ing (New York, Charles Scribner's Sons, 1953).
2.See Bernard Levenson,"Bureaucradc Succession,"
in Complex Organizations: A Sociological Ri'adcr,
edited by Amitai Etzioni (New York, Rinehart &
Company, 1961).
3. See Stanley Stark,"Mills, Mannheim, and the Psy-
chology of Knowledge," mimeographed (Urbana,
University of Illinois, 1960).
4. G.S. Klein, "The Personal World Through Per-
ception," in Perception: An Approach to Personality,
edited by R.R. Biake and G.V. Ramsey (New York,
The Ronald Press, I95i)- For more on "the creative
personality," see Morris I. Stein and Shirley J.
Heinze, Creativity and the Individual (Glencoe, Illi-
nois, The Free Press, 1960).
5. Herbert Feigl," Philosophical Embarrassments of
Psychology," ;4merf'c(iJi Psychologist, March 1959.
6. New York, Simon & Schuster, 1956.

86. 7. New York, Simon & Schuster, 1955.
8. New York, Harper & Brothers, 1962,
9. For a detailed discussion of how such a setup
might operate and be organized, see my Innovation
in Marketing (New York, McGraw-Hill, 1962).
10. See Victor M. Longstreet," Management R & D,"
HBR July-August 1961.
n. New York, McGraw-Hill, i960.
Reprint R0208K
To order reprints, see the last p a ^
of Executive Summaries.
To further explore the topic of this
article, go to httpv7explore.hbr.org.
144 HARVARD BUSINESS REVIEW
To learn more about the ideas in
"Creativity is Not Enough," explore
the related articles listed at the right.
You may access these materials on
the Harvard Business School Publishing
Web site, www.harvardbusinessonline.org,

87. or by calling 800-988-0886 (in the United
States and Canada) or 617-783-7500.
EXPLORING FURTHER
Creativity Is Not Enough
ARTICLES
"Managing Innovation: Controlled Chaos"
James Brian Quinn
Harvard Business Review, May-June 1985
Product No, 85312
Quinn agrees that striking the right balance between
organizational flexibility
and rigidity is an essential characteristic of successfully
innovative companies.
He argues that large companies can be just as innovative as
small businesses
and entrepreneurs-if they accept the tumultuous realities ofthe
innovation
process. To balance predictable orderliness and creative chaos,
successful inno-
vators pay close attention to customers' needs, avoid overly
detailed technical
or marketing plans early in the innovation process, and let
entrepreneurial
teams pursue competing ideas within a clear framework of goals
and limits.
They also take a long-term view and establish incentive systems
that reward
risk taking. In short, they act very much like successful small
entrepreneurs.

88. "How to Kill Creativity"
Teresa M. Amabile
Harvard Business Review, September-October 1998
Product No. 3499
Amabile suggests that companies' overreliance on control and
order can under-
mine employees' ability to generate and implement powerful
ideas. How to
avoid killing creativity? Boost employees' expertise (technical,
procedural, and
intellectual knowledge), creative-thinking skills (imaginative
problem-solving),
and motivation (passion for speciflc challenges). In particular,
increase employ-
ees' intrinsic motivation: Give stretch assignments and decision-
making
freedom. Support innovations with sufficient time and
resources. And let
employees know that what they do matters.
"Change the Way You Persuade"
Gary A. Williams and Robert B. Miller
Harvard Business Review, May 2002
Product No. 9969
This article focuses on strategies for ensuring that a good idea
gets a hearing
and a champion - essential steps toward innovation. To gain
support for their
ideas, creative thinkers must understand their listeners'
particular decision-
making styles and adapt their presentations accordingly. The
authors identify
flve styles: charismatics, thinkers, skeptics, followers, and

89. controllers. Each style
requires certain kinds of information at specific steps in the
decision-making
process. Charismatics, for example, are easily enthralled but
base their final
decisions on balanced information and bottom-line results.
Skeptics challenge
every data point and decide based on their gut feelings. The
article details
tactics for each style.
THE INNOVATIVE ENTERPRISE AUGUST 2002 145
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pleased to grant permission to make this content
available through such means. For rates and permission, contact
[email protected]
www.hbr.org
S
POTLIGHT
ON
I
NNOVATION
The Innovator’s DNA
by Jeffrey H. Dyer, Hal B. Gregersen, and
Clayton M. Christensen

91. •
Included with this full-text
Harvard Business Review
article:
The Idea in Brief—the core idea
1
Article Summary
2
The Innovator’s DNA
Five “discovery skills” separate
true innovators from the
rest of us.
Reprint R0912E

92. S
P O T L I G H T
O N
I
N N O V A T I O N
The Innovator’s DNA
page 1
The Idea in Brief
C
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93. T
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95. ER
VE
D
.
The habits of Steve Jobs, Jeff Bezos, and
other innovative CEOs reveal much about
the underpinnings of their creative think-
ing. Research shows that five discovery
skills distinguish the most innovative
entrepreneurs from other executives.
DOING
•
Questioning
allows innovators to break
out of the status quo and consider new
possibilities.
•
Through
observing

96. , innovators detect
small behavioral details—in the
activities of customers, suppliers, and
other companies—that suggest new
ways of doing things.
•
In
experimenting
, they relentlessly try on
new experiences and explore the world.
•
And through
networking
with individuals
from diverse backgrounds, they gain rad-
ically different perspectives.

97. THINKING
•
The four patterns of action together help
innovators
associate
to cultivate new
insights.
S
POTLIGHT
ON
I
NNOVATION

98. The Innovator’s DNA
by Jeffrey H. Dyer, Hal B. Gregersen, and
Clayton M. Christensen
harvard business review • december 2009 page 2
C
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A

100. T
IO
N
. A
LL
R
IG
H
T
S
R
ES
ER
VE
D
.
Five “discovery skills” separate true innovators from the rest of
us.
“How do I find innovative people for my
organization? And how can I become more
innovative myself?”
These are questions that stump senior exec-
utives, who understand that the ability to

101. innovate is the “secret sauce” of business
success. Unfortunately, most of us know very
little about what makes one person more cre-
ative than another. Perhaps for this reason,
we stand in awe of visionary entrepreneurs
like Apple’s Steve Jobs, Amazon’s Jeff Bezos,
eBay’s Pierre Omidyar, and P&G’s A.G. Lafley.
How do these people come up with ground-
breaking new ideas? If it were possible to
discover the inner workings of the masters’
minds, what could the rest of us learn about
how innovation really happens?
In searching for answers, we undertook a six-
year study to uncover the origins of creative—
and often disruptive—business strategies in
particularly innovative companies. Our goal
was to put innovative entrepreneurs under
the microscope, examining when and how
they came up with the ideas on which their
businesses were built. We especially wanted to
examine how they differ from other executives
and entrepreneurs: Someone who buys a
McDonald’s franchise may be an entrepreneur,
but building an Amazon requires different
skills altogether. We studied the habits of 25
innovative entrepreneurs and surveyed more
than 3,000 executives and 500 individuals who
had started innovative companies or invented
new products.
We were intrigued to learn that at most
companies, top executives do not feel person-
ally responsible for coming up with strategic
innovations. Rather, they feel responsible for

102. facilitating the innovation process. In stark
contrast, senior executives of the most innova-
tive companies—a mere 15% in our study—
don’t delegate creative work. They do it
themselves.
But
how
do they do it? Our research led us
to identify five “discovery skills” that distin-
guish the most creative executives: associat-
ing, questioning, observing, experimenting,
and networking. We found that innovative
The Innovator’s DNA
•
•
•
S

103. POTLIGHT
ON
I
NNOVATION
harvard business review • december 2009 page 3
entrepreneurs (who are also CEOs) spend 50%
more time on these discovery activities than
do CEOs with no track record for innovation.
Together, these skills make up what we call
the innovator’s DNA. And the good news is, if
you’re not born with it, you can cultivate it.
What Makes Innovators Different?
Innovative entrepreneurs have something
called creative intelligence, which enables
discovery yet differs from other types of intel-
ligence (as suggested by Howard Gardner’s
theory of multiple intelligences). It is more
than the cognitive skill of being right-brained.
Innovators engage both sides of the brain as
they leverage the five discovery skills to create

104. new ideas.
In thinking about how these skills work
together, we’ve found it useful to apply the
metaphor of DNA. Associating is like the
backbone structure of DNA’s double helix;
four patterns of action (questioning, observ-
ing, experimenting, and networking) wind
around this backbone, helping to cultivate
new insights. And just as each person’s physi-
cal DNA is unique, each individual we studied
had a unique innovator’s DNA for generating
breakthrough business ideas.
Imagine that you have an identical twin,
endowed with the same brains and natural
talents that you have. You’re both given
one week to come up with a creative new
business-venture idea. During that week, you
come up with ideas alone in your room. In
contrast, your twin (1) talks with 10 people—
including an engineer, a musician, a stay-
at-home dad, and a designer—about the ven-
ture, (2) visits three innovative start-ups to
observe what they do, (3) samples five “new to
the market” products, (4) shows a prototype
he’s built to five people, and (5) asks the ques-
tions “What if I tried this?” and “Why do you
do that?” at least 10 times each day during
these networking, observing, and experiment-
ing activities. Who do you bet will come up
with the more innovative (and doable) idea?
Studies of identical twins separated at birth
indicate that our ability to think creatively
comes one-third from genetics; but two-thirds

105. of the innovation skill set comes through
learning—first understanding a given skill,
then practicing it, experimenting, and ulti-
mately gaining confidence in one’s capacity to
create. Innovative entrepreneurs in our study
acquired and honed their innovation skills
precisely this way.
Let’s look at the skills in detail.
Discovery Skill 1: Associating
Associating, or the ability to successfully con-
nect seemingly unrelated questions, problems,
or ideas from different fields, is central to
the innovator’s DNA. Entrepreneur Frans
Johansson described this phenomenon as
the “Medici effect,” referring to the creative
explosion in Florence when the Medici family
brought together people from a wide range
of disciplines—sculptors, scientists, poets, phi-
losophers, painters, and architects. As these
individuals connected, new ideas blossomed
at the intersections of their respective fields,
thereby spawning the Renaissance, one of the
most inventive eras in history.
To grasp how associating works, it is impor-
tant to understand how the brain operates.
The brain doesn’t store information like a
dictionary, where you can find the word
“theater” under the letter “T.” Instead, it asso-
ciates the word “theater” with any number of

106. experiences from our lives. Some of these are
logical (“West End” or “intermission”), while
others may be less obvious (perhaps “anxiety,”
from a botched performance in high school).
The more diverse our experience and knowl-
edge, the more connections the brain can
make. Fresh inputs trigger new associations;
for some, these lead to novel ideas. As Steve
Jobs has frequently observed, “Creativity is
connecting things.”
The world’s most innovative companies
prosper by capitalizing on the divergent as-
sociations of their founders, executives, and
employees. For example, Pierre Omidyar
launched eBay in 1996 after linking three un-
connected dots: (1) a fascination with creating
more-efficient markets, after having been
shut out from a hot internet company’s IPO
in the mid-1990s; (2) his fiancée’s desire to
locate hard-to-find collectible Pez dispensers;
and (3) the ineffectiveness of local classified
ads in locating such items. Likewise, Steve
Jobs is able to generate idea after idea be-
cause he has spent a lifetime exploring new
and unrelated things—the art of calligraphy,
meditation practices in an Indian ashram, the
fine details of a Mercedes-Benz.
Associating is like a mental muscle that can
grow stronger by using the other discovery
Jeffrey H. Dyer

107. ([email protected]) is
a professor of strategy at Brigham
Young University in Provo, Utah, and
an adjunct professor at the University
of Pennsylvania’s Wharton School.
Hal B. Gregersen
([email protected]
insead.edu) is a professor of
leadership at Insead in Abu Dhabi,
UAE, and Fontainebleau, France.
Clayton M. Christensen
([email protected]) is a professor
of business administration at Harvard
Business School in Boston.
The Innovator’s DNA
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108. •
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harvard business review • december 2009 page 4
skills. As innovators engage in those behaviors,
they build their ability to generate ideas that
can be recombined in new ways. The more
frequently people in our study attempted
to understand, categorize, and store new
knowledge, the more easily their brains could
naturally and consistently make, store, and
recombine associations.
Discovery Skill 2: Questioning

109. More than 50 years ago, Peter Drucker de-
scribed the power of provocative questions.
“The important and difficult job is never to
find the right answers, it is to find the right
question,” he wrote. Innovators constantly
ask questions that challenge common wisdom
or, as Tata Group chairman Ratan Tata puts
it, “question the unquestionable.” Meg Whit-
man, former CEO of eBay, has worked directly
with a number of innovative entrepreneurs,
including the founders of eBay, PayPal, and
Skype. “They get a kick out of screwing up the
status quo,” she told us. “They can’t bear it.
So they spend a tremendous amount of time
thinking about how to change the world. And
as they brainstorm, they like to ask: ‘If we did
this, what would happen?’”
Most of the innovative entrepreneurs
we interviewed could remember the specific
questions they were asking at the time
they had the inspiration for a new venture.
Michael Dell, for instance, told us that his
idea for founding Dell Computer sprang from
his asking why a computer cost five times
as much as the sum of its parts. “I would
take computers apart...and would observe
that $600 worth of parts were sold for
$3,000.” In chewing over the question, he
hit on his revolutionary business model.
To question effectively, innovative entrepre-
neurs do the following:
Ask “Why?” and “Why not?” and “What if?”

110. Most managers focus on understanding how
to make existing processes—the status quo—
work a little better (“How can we improve
widget sales in Taiwan?”). Innovative entre-
preneurs, on the other hand, are much more
likely to challenge assumptions (“If we cut the
size or weight of the widget in half, how would
that change the value proposition it offers?”).
Marc Benioff, the founder of the online sales
software provider Salesforce.com, was full of
questions after witnessing the emergence of
Amazon and eBay, two companies built on
services delivered via the internet. “Why are
we still loading and upgrading software the
way we’ve been doing all this time when
we can now do it over the internet?” he
wondered. This fundamental question was the
genesis of Salesforce.com.
Imagine opposites.
In his book
The Oppos-
able Mind,
Roger Martin writes that innova-
tive thinkers have “the capacity to hold two
diametrically opposing ideas in their heads.”

111. He explains, “Without panicking or simply
settling for one alternative or the other,
they’re able to produce a synthesis that is
superior to either opposing idea.”
Innovative entrepreneurs like to play devil’s
advocate. “My learning process has always
been about disagreeing with what I’m being
told and taking the opposite position, and
pushing others to really justify themselves,”
Pierre Omidyar told us. “I remember it was
very frustrating for the other kids when I
would do this.” Asking oneself, or others, to
imagine a completely different alternative
can lead to truly original insights.
Embrace constraints.
Most of us impose
constraints on our thinking only when forced
to deal with real-world limitations, such as re-
source allocations or technology restrictions.
Ironically, great questions actively impose
constraints on our thinking and serve as a
catalyst for out-of-the-box insights. (In fact,
one of Google’s nine innovation principles is
“Creativity loves constraint.”) To initiate a
creative discussion about growth opportuni-
ties, one innovative executive in our study
asked this question: “What if we were legally
prohibited from selling to our current custom-
ers? How would we make money next year?”
This led to an insightful exploration of ways
the company could find and serve new cus-

112. tomers. Another innovative CEO prods his
managers to examine sunk-cost constraints
by asking, “What if you had not already hired
this person, installed this equipment, imple-
mented this process, bought this business, or
pursued this strategy? Would you do the same
thing you are doing today?”
Discovery Skill 3: Observing
Discovery-driven executives produce uncom-
mon business ideas by scrutinizing common
phenomena, particularly the behavior of
potential customers. In observing others, they
act like anthropologists and social scientists.
Sample of Innovative
Entrepreneurs from
our Study
Sam Allen:
ScanCafe.com
Marc Benioff:
Salesforce.com

113. Jeff Bezos:
Amazon.com
Mike Collins:
Big Idea Group
Scott Cook:
Intuit
Michael Dell:
Dell Computer
Aaron Garrity:
XanGo
Diane Green:
VMWare

114. Eliot Jacobsen:
RocketFuel
Josh James:
Omniture
Chris Johnson:
Terra Nova
Jeff Jones:
NxLight; Campus Pipeline
Herb Kelleher:
Southwest Airlines
Mike Lazaridis:
Research In Motion

115. Spencer Moffat:
Fast Arch of Utah
David Neeleman:
JetBlue; Morris Air
Pierre Omidyar:
eBay
John Pestana:
Omniture
Peter Thiel:
PayPal
Mark Wattles:
Hollywood Video

116. Corey Wride:
Movie Mouth
Niklas Zennström:
Skype
The Innovator’s DNA
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harvard business review • december 2009 page 5
Intuit founder Scott Cook hit on the idea
for Quicken financial software after two key
observations. First he watched his wife’s
frustration as she struggled to keep track of
their finances. “Often the surprises that lead
to new business ideas come from watching
other people work and live their normal
lives,” Cook explained. “You see something
and ask, ‘Why do they do that? That doesn’t
make sense.’” Then a buddy got him a sneak
peek at the Apple Lisa before it launched. Im-
mediately after leaving Apple headquarters,
Cook drove to the nearest restaurant to write
down everything he had noticed about the
Lisa. His observations prompted insights
such as building the graphical user interface
to look just like its real-world counterpart
(a checkbook, for example), making it easy
for people to use it. So Cook set about solving
his wife’s problem and grabbed 50% of the
market for financial software in the first year.
Innovators carefully, intentionally, and
consistently look out for small behavioral
details—in the activities of customers, suppli-
ers, and other companies—in order to gain

118. insights about new ways of doing things.
Ratan Tata got the inspiration that led to the
world’s cheapest car by observing the plight
of a family of four packed onto a single mo-
torized scooter. After years of product devel-
opment, Tata Group launched in 2009 the
$2,500 Nano using a modular production
method that may disrupt the entire automo-
bile distribution system in India. Observers
try all sorts of techniques to see the world in
a different light. Akio Toyoda regularly prac-
tices Toyota’s philosophy of
genchi genbutsu
—
“going to the spot and seeing for yourself.”
Frequent direct observation is baked into the
Toyota culture.
Discovery Skill 4: Experimenting
When we think of experiments, we think of
scientists in white coats or of great inventors
like Thomas Edison. Like scientists, innovative
entrepreneurs actively try out new ideas by
creating prototypes and launching pilots.
(As Edison said, “I haven’t failed. I’ve simply
found 10,000 ways that do not work.”) The
world is their laboratory. Unlike observers,
who intensely watch the world, experimenters

119. construct interactive experiences and try to
How Innovators Stack Up
This chart shows how four well-known innovative entrepreneurs
rank on each of the discovery skills. All our high-profile inno-
vators scored above the 80th percentile on questioning, yet each
combined the discovery skills uniquely to forge new insights.
Rankings are based on a survey of more than 3,000 executives
and entrepreneurs.
100
80
60
40
PERCENTILE
Noninnovators
QUESTIONINGASSOCIATING OBSERVING
EXPERIMENTING NETWORKING
Michael Dell
Michael Lazaridis
Scott Cook
Pierre Omidyar

120. The Innovator’s DNA
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harvard business review • december 2009 page 6

121. provoke unorthodox responses to see what
insights emerge.
The innovative entrepreneurs we inter-
viewed all engaged in some form of active
experimentation, whether it was intellectual
exploration (Michael Lazaridis mulling over
the theory of relativity in high school), physi-
cal tinkering (Jeff Bezos taking apart his
crib as a toddler or Steve Jobs disassembling
a Sony Walkman), or engagement in new sur-
roundings (Starbucks founder Howard Shultz
roaming Italy visiting coffee bars). As execu-
tives of innovative enterprises, they make
experimentation central to everything they
do. Bezos’s online bookstore didn’t stay where
it was after its initial success; it morphed
into an online discount retailer, selling a full
line of products from toys to TVs to home
appliances. The electronic reader Kindle is an
experiment that is now transforming Amazon
from an online retailer to an innovative
electronics manufacturer. Bezos sees experi-
mentation as so critical to innovation that
he has institutionalized it at Amazon. “I en-
courage our employees to go down blind
alleys and experiment,” Bezos says. “If we can
get processes decentralized so that we can do
a lot of experiments without it being very
costly, we’ll get a lot more innovation.”
Scott Cook, too, stresses the importance of
creating a culture that fosters experimenta-
tion. “Our culture opens us to allowing lots
of failures while harvesting the learning,”
he told us. “It’s what separates an innovation