Three Star Leadership

Here's the Review in Brief for The New Age of Innovation: Driving Cocreated Value Through Global Networks by C.K. Prahalad and M.S. Krishnan. See below for the Review in Depth and for Additional Resources.

How this book is different:

This book is about cocreation as the new way to do business innovation. I think that means that companies and customers will create new products, services and experiences together. You can decide what you think it means because the authors never actually define it.

The fabric of the book is woven from two threads, expressed as formulas. N = 1 means "value is based on unique, personalized experiences of consumers." R = G means that "All firms will access resources from a wide variety of other big and small firms—a global ecosystem."

Strengths:

This is a deep and thoughtful book. It covers a lot of ground and includes information about the efforts of a variety of companies that go far beyond the usually-cited examples.

Warnings:

There is an awful lot of linguistic sleight of hand. Describing buying coffee at Starbucks as "cocreation" because I decide what to buy, whether to stay and where to sit simply slaps a fancy new word on a very mundane process.

If you are a C. K. Prahalad fan, you will love this book because it tells you all about his other books and concepts. It does that early and often. If you are not a fan or if repetitive self-reference annoys you, beware.

On a more serious note, the authors present concepts that have been covered well by others for a couple of decades without a shred of reference or gratitude.

This book is written for large companies whose operations stretch across borders. If you're a smaller company, it may give you insight and inspiration but you won't get any tools.

Bottom Line:

In some ways there's nothing new here. N = 1 echoes what Peppers and Rogers covered in One-to-One Marketing. R = G sounds a lot like "The World is Flat." This is an informed rumination by a couple of very smart men about how the world of business is changing

When you are done you will have stretched your thinking. You will ponder how the world is changing and how smart the authors of the book are.

Those are not bad outcomes. But neither are they practical ones.

Now for the Review in Depth.

The New Age of Innovation is divided into an Introduction and eight chapters. The Introduction will tell you how the authors came to write the book and how their key ideas of N = 1 and R = G were developed.

The Transformation of Business is the authors' description of how business is moving toward a focus on the individual customer experience and drawing resources from everywhere.

Chapter two discusses Business Processes as the way a company can gain competitive advantage by reconfiguring resources in real time. There are many examples here, but not much guidance on what it means for you.

The Analytics chapter calls for sophisticated systems that can mine every scrap of data, identify trends, and reveal opportunities. The emphasis is on mining internal information but the part about R = G seems to have gotten lost. There's virtually no discussion of outside data sources or collaborators.

IT Matters is about the technical architecture for innovation. It is primarily a wish list about what IT ought to do. This could easily be converted into a checklist for system capability if you're considering changes in your IT systems.

Chapter five, Organizational Legacies, is about how companies have cultures and values and those cultures and values need to change if the business is going to change successfully. The main illustration in this chapter is the first Indian firms to offer outsourcing. The authors don't seem to know about the second wave of outsourcing firms, mostly founded after 2000 who are modeling their business plans on what to do differently than their predecessors.

This was the most disappointing chapter of the book for me. There were lots of neat diagrams and lots of pronouncements but there didn't seem to be much understanding of how very hard it is to change a company's culture. The entire process is treated as similar to changing the operating system in an IT department, technically difficult perhaps, but nothing some good planning and dedicated engineers can't handle.

The chapter on Efficiency and Flexibility highlights a challenge that every company that has ever tried to be both nimble and efficient has faced. There is a distinct tension between the two and it is often not resolvable. The chapter also discusses problems moving from the old way to the new way.

Chapter seven, Dynamic Reconfiguration of Talent, makes the point that you need to treat employees and vendors as unique individuals. The examples are good, but firmly rooted in IT. You won't find much here about companies designed for innovation, like WL Gore or who revamped their innovation model around business practices like Proctor & Gamble.

The final chapter, An Agenda for Managers, promises that the author's model is the one that will be the basis for innovation and value creation. For me, this was a mixed bag of a chapter. There's good advice like "learn by doing, take small steps." But then there's a twelve step agenda that offers gloriously non-specific advice like you might get from a fortune cookie. Example: "A long-term focus with short-term actions is the essence of organizational transformation."

Read The New Age of Innovation if you want a deep, thoughtful discussion of some major trends in business. There are many statements and examples that will get you to stop and think.

Don't be surprised if a lot of what you read seems familiar. N = 1 echoes what Peppers and Rogers covered in One-to-One Marketing. R = G sounds a lot like "The World is Flat." This is an informed rumination by a couple of very smart men about how the world of business is changing

When you are done you will have stretched your thinking. You will ponder how the world is changing and how smart the authors of the book are.

Those are not bad outcomes. But they aren't practical ones, either. .

Additional Resources

Game Changer, by A. G. Lafley and Ram Charan is an excellent book about how Proctor and Gamble changed the way it approached innovation. It is better written and more practical than New Age of Innovation.

Don Peppers and Martha Rogers have written a slew of books about developing relationships with individual customers. One of the more recent is Return on Customer: Creating Maximum Value From Your Scarcest Resource.

The World Is Flat 3.0: A Brief History of the Twenty-first Century by Tom Friedman does a great job of describing the interconnectedness of the world.

Dov Seidman's How is an excellent review of what changing technology and business competition have done to the importance of people and relationships.

To see what other folks thought of this book, or to purchase it from Amazon, click here.