by Jeff Dyer
Occasionally, whenever you face a family, school, or community problem or challenge, think about inviting a focus group of three or four people with different backgrounds to give their perspectives on how to best solve the problem. This could involve a dinner invitation or drinks and refreshments to accompany the discussion.
If you have young people in your home, do some idea networking together by socializing with a diversity of people. For example, pick a person from a different country, different ethnic group, different religion, different age, or unusual occupation and invite him or her to a meal with your family. Explore together how other people live and see the world.
Experimenting Skills
Conduct experiments at home or in your neighborhood and discuss them with children. For example, Bill Dyer (a sociologist and the father of Jeff Dyer) placed an ironed white shirt on the floor of the central walkway in his home. He watched for two days as his children carefully stepped around it, as no one bothered to pick it up. He then discussed with his children why they didn’t think to pick up the shirt and, more broadly, what they viewed as their responsibilities around the house. On another occasion, he swapped a teenage son for a neighbor family’s teenage son for a week. After the week, the two families got together to discuss what each boy, and each family, learned from the experience.
Take a young person to a junkyard or flea market to find something to take apart. Pick something for yourself at the same time. Take the items home and dismantle them together to see what new insights emerge about how and why things work. One father and son did this with an old airplane engine. The experience sparked a future aviation career, as the young boy grew up to become a pilot.
Engage young people in prototyping efforts. Select a product you’d like to improve (or imagine a new one) and design and construct a crude prototype together. Children love the chance to create something new, particularly if Play-Doh is involved; you never know what new feature of the prototype they might discover.
Take your child on a trip to a foreign country (or even a “foreign” part of your hometown) with the explicit goal of experimenting with everything new. Try out new foods, customs, and local products and services. If possible, live in a home to experience life as a local. Try out as many new interactive experiences as possible.
Final Call for Action
What is our final call for action? Adopt a young innovator! Find at least one child (your own, a relative’s, or a neighbor’s) and help that young person appreciate and strengthen his or her innovation skills. Every child deserves at least one adult who values her innovation skills, at least one adult who listens to her honest questions. As Dr. Seuss knew so well, “Unless someone like you cares a whole awful lot, nothing is going to get better. It’s not.” If we don’t collectively nurture the next generation of disruptive innovators, who will? There are far too many children in need for any adult to slack off when it comes to nurturing the next generation. If we collectively do this task well, many young people will grow up acting differently, thinking differently, and, in the end, making a difference in a world bursting with complex, challenging problems. Naively perhaps, we believe in the power of one, that one adult honoring one child’s innovation skills can make all the difference in building a new generation of disruptive innovators. That is our hope.
Appendix B
The Innovator’s DNA Research Methods
Our research project consisted of two phases: (1) an inductive study of innovators compared with noninnovators, and (2) a large sample study comparison of roughly eighty innovators and roughly four hundred noninnovator executives (we later expanded this to a larger sample). We conducted exploratory interviews with a sample of roughly thirty innovative entrepreneurs and a similar number of senior executives in larger organizations (see a subsample of innovators we interviewed in appendix A). The goal of our interviews with innovators was to understand when and how they personally came up with creative ideas on which they built new innovative businesses. We asked questions such as:
What was the most valuable strategic insight or novel business idea that you generated during your business career? Please describe the details of the idea. (For example, how was the idea novel and how did you come up with it?)
In your opinion, do you have any particular skills that are important to helping you generate novel business ideas? How did those skills influence your ability to generate strategic insights or novel business ideas?
To get an outside perspective, whenever possible we also interviewed senior executives who were well acquainted with the innovative entrepreneur. For example, we interviewed senior Amazon executives Jeff Wilke and Andy Jassy about Jeff Bezos; Dell CEO Kevin Rollins about Michael Dell; and former eBay CEO Meg Whitman about eBay founder Pierre Omidyar, Skype founder Niklas Zennström, and PayPal founders Peter Thiel and Elon Musk.
Through the interviews, we identified four behavioral patterns—questioning, observing, networking, and experimenting—that were more pronounced in innovators and which seemed to trigger associational thinking. These four behavioral skills and one cognitive skill comprise the five discovery skills that we discuss in the book.
We then developed a set of survey items to measure the frequency and intensity with which a person engaged in questioning (six survey items), observing (four survey items), experimenting (five survey items), and idea networking (four survey items). Response options ranged from 1 or strongly disagree to 7 or strongly agree. We also conducted an exploratory and confirmatory factor analysis (EFA) to uncover the underlying factor structure of the nineteen items measuring the behaviors.
We then conducted a negative binomial regression to test the relationship between the four discovery behaviors and starting innovative ventures. The results showed that observing, networking, and experimenting were significantly correlated with starting an innovative new business (and questioning was significant when combined with one of the other three behaviors). The four behavioral patterns were also significantly correlated with each other—with correlations typically greater than 0.50—suggesting that an individual who engages in one of the behaviors is more likely to engage in some level of the other behaviors. Results were stronger when each of the behaviors was used in combination with another behavior. Full details of the initial study can be found in: Jeffrey H. Dyer, Hal B. Gregersen, and Clayton M. Christensen, “Entrepreneur Behaviors, Opportunity Recognition, and the Origins of Innovative Ventures,” Strategic Entrepreneurship Journal 2 (2008): 317.
Notes
Preface
1. Markus Baer, Jeffrey Dyer, and Zachariah Rodgers, “Career Benefits of Entrepreneurial Activity for Individuals in Paid Employment: An Application of Signaling Theory,” working paper presented at Academy of Management conference, 2017.
Introduction
1. IBM, “Capitalizing on Complexity: Insights from the Global Chief Executive Officer Study,” May 18, 2010, https://www.ibm.com/downloads/cas/1VZV5X8J.
2. Jeffrey H. Dyer, Hal B. Gregersen, and Clayton Christensen, “Entrepreneur Behaviors, Opportunity Recognition, and the Origins of Innovative Ventures,” Strategic Entrepreneurship Journal 2 (2008): 317.
3. Todd Kashdan, Curious? Discover the Missing Ingredient to a Fulfilling Life (New York: Harper Collins, 2009).
Chapter 1
1. Morten T. Hansen, Herminia Ibarra, and Urs Peyer, “The Best-Performing CEOs in the World,” Harvard Business Review, January–February 2010.
2. Jeffrey S. Young and William L. Simon, iCon: Steve Jobs, the Greatest Second Act in the History of Business (Hoboken, NJ: John Wiley & Sons, 2005), 37.
3. Ibid., 38.
4. Interview with Steve Jobs, Rolling Stone, June 16, 1994.
5. Steve Jobs, commencement address, Stanford University, 2005.
6. Marvin Reznikoff et al., “Creative Abilities in Identical and Fraternal Twins,” Behavior Genetics 3, no. 4 (1973): 365. For example, the researchers gave them the Remote Associations Test (RAT),
where they would present twins with three words and ask them to find a fourth word linking the three. They also gave them the Alternative Uses Test, where they would ask the subjects to brainstorm alternative uses for a common object (like a brick), and coded how many total and divergent responses the subjects provided.
7. See Kathleen McCartney, Monica J. Harris, and Frank Bernieri, “Growing Up and Growing Apart: A Developmental Meta-Analysis of Twin Studies,” Psychological Bulletin 107, no. 2 (1990): 226.
8. Other studies that have found that nurture trumps nature as far as creativity goes include: Frank Barron, Artists in the Making (New York: Seminar Press, 1972); Steven G. Vandenberg, ed., Progress in Human Behavior Genetics (Baltimore: Johns Hopkins Press, 1968); R. C. Nichols, “Twin Studies of Ability, Personality, and Interests,” Homo 29 (1978), 158; Niels G. Waller et al., “Creativity, Heritability, Familiality: Which Word Does Not Belong?” Psychological Inquiry 4 (1993): 235; Niels G. Waller et al., “Why Creativity Does Not Run in Families: A Study of Twins Reared Apart,” unpublished manuscript, 1992. For a summary of research in this area, see R. Keith Sawyer, Explaining Creativity: The Science of Human Innovation, 2nd ed. (New York: Oxford University Press, 2012).
9. Frans Johansson, The Medici Effect: What Elephants and Epidemics Can Teach Us about Innovation (Boston: Harvard Business School Press, 2006).
10. Bao Pham, “Reach for and Realize Your Vision,” LinkedIn, https://www.linkedin.com/pulse/reach-realize-your-vision-bao-pham/.
11. A. G. Lafley and Ram Charan, The Game-Changer (New York: Crown Business, 2008).
12. Indeed, the goal of “gene therapy” is to insert new genes into an individual’s cells to replace a genetic defect with a properly functioning gene.
13. Lowell W. Busenitz and Jay B. Barney, “Differences between Entrepreneurs and Managers in Large Organizations: Biases and Heuristics in Strategic Decision-Making,” Journal of Business Venturing 12, no. 1 (1997): 9.
14. Ronald C. Anderson and David M. Reeb, “Founding-Family Ownership and Firm Performance: Evidence from the S&P 500,” The Journal of Finance 58, no. 3 (2003): 1301. This study found that companies led by the CEO founder were 29 percent more profitable (net income to assets) and had 21 percent higher market valuations. These results cannot be attributed to the fact that founder-led companies are smaller and more likely to grow (the authors controlled for size and age) or are in more-attractive industries (they controlled for industry). The authors conclude that “founders bring unique, value-adding skills to the firm that result in superior accounting performance and market valuations.”
Chapter 2
1. Albert Einstein, Ideas and Opinions, ed. Carl Seelig, trans. Sonja Bargmann (New York: Three Rivers Press, 2012), 25–26; “Why Einstein Used Combinatory Play and How You Can Too,” Aly Juma (personal blog), https://alyjuma.com/combinatory-play/.
2. Walt Disney Company, 1965 Annual Report.
3. We prefer the term associational thinking to pattern recognition because the latter term seems to suggest that there is an identifiable pattern innovative entrepreneurs recognize. As innovators described how they discovered or recognized ideas for innovative new ventures, it seemed to us that while they connected disparate ideas together, they often did not necessarily recognize a pattern, or even recognize that it would be a viable business opportunity. They often discovered that things fit together through trial and error and adaptation.
4. While Frans Johansson coined the term “Medici Effect” for his book (The Medici Effect: What Elephants and Epidemics Can Teach Us about Innovation [Boston: Harvard Business School Press, 2006]), we prefer a less time- and place-bound version of the term. Hence, we use “Innovation Effect” when referring to places past, present, and future where a powerful convergence of different ideas generate substantial innovative results. Historically these were geographic spaces that promoted intersections among people with different backgrounds and knowledge. Today these can be geographic places or virtual market spaces that are designed to foster connections among people with different knowledge.
5. In short, the Medici effect was not limited to the Medici family or the renaissance period in Florence, Italy. Instead, the Medici effect was simply a specific example of the common experience within science and elsewhere that innovations often result at the intersection of disciplines.
6. Francis Crick, “The Impact of Linus Pauling on Molecular Biology,” (video), Oregon State University, March 2, 1995, scarc.library.oregonstate.edu/events/1995paulingconference/video-s1-2-crick.html.
7. Mihaly Csikszentmihalyi, Creativity (New York: HarperCollins, 1996).
8. Leslie Berlin, “We’ll Fill This Space, but First a Nap,” New York Times, September 27, 2008.
9. Gary Wolf, “Steve Jobs: The Next Insanely Great Thing,” Wired, February 1, 1996.
10. If you want books chock-full of insights on how to connect ideas more creatively, pick up either Michael Michalko’s Cracking Creativity or his Thinkertoys. Both books are exceptional.
11. Bill Taylor, “Trading Places: A Smart Way to Change Your Mind,” hbr.org, March 1, 2010, https://hbr.org/2010/03/trading-places-a-smart-way-to.
Chapter 3
1. Quinn Spitzer and Ron Evans, Heads You Win: How the Best Companies Think (New York: Simon & Schuster, 1997), 41; Elizabeth Margulis, “Fairy Tales and More Fairy Tales,” New Mexico Library Bulletin, January 1958.
2. Peter F. Drucker, The Practice of Management (New York: Wiley, 1954), 352.
3. Mihaly Csikszentmihalyi, Creativity (New York: HarperCollins, 1996).
4. Karen Dillon, “Peter Drucker and A. G. Lafley Want You to Be Curious,” hbr.org, October 8, 2010, https://hbr.org/2010/10/what-will-you-be-curious-about.
5. Land not only created the Polaroid camera, but held 532 other patents for a variety of scientific and commercial purposes (a patent output second only to that of Thomas Edison).
6. Marissa Ann Mayer, “Creativity Loves Constraints,” Bloomberg Businessweek, February 13, 2006.
7. Rekha Balu, “Strategic Innovation: Hindustan Lever Ltd.,” Fast Company, May 31, 2001.
8. Alan Deutschman, “The Once and Future Steve Jobs,” Salon, October 11, 2000.
9. Brooks Barnes, “Disney’s Retail Plan Is a Theme Park in Its Stores,” New York Times, October 12, 2009.
10. Jonas Salk, interview by Bill Moyers, February 18, 1990, https://billmoyers.com/content/jonas-salk/.
11. Since our serendipitous discovery of QuestionStorming, we have learned that others also stumbled across similar practices. See, for instance, Jon Roland, “Questorming” (http://www.pynthan.com/vri/questorm.htm), and Marilee C. Goldberg, The Art of the Question (New York: Wiley, 1998).
Chapter 4
1. “Design Thinking . . . Starting with Empathy”: Doug Dietz speech at TEDxSanJoseCA 2012, https://www.youtube.com/watch?v=jajduxPD6H4.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid
6. Tom Kelley, The Art of Innovation (New York: Doubleday, 2001), 16.
7. OpenTable, “Products,” https://restaurant.opentable.com/products/connect.
8. Hugh Hart, “Music: An Instrument Inventor Hears Music Everywhere,” Wired, November 12, 2009.
9. Howard Shultz and Dori Jones Yang, Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time (New York: Hyperion, 1997), 51.
10. Ethan Waters, “Cars, Minus the Fins,” Fortune, July 9, 2007, B-1.
11. Peter M. Leschak, “Notes from a More Real World,” New York Times, January 27, 1991.
Chapter 5
1. Brad Stone, “Uber: The App That Changed How the World Hails a Taxi,” The Guardian, January 29, 2017.
2. Ibid.
3. Ibid.
4. Ibid.
5. Timothy R. Clark, “Innovation Is a Social Process: So Oil t
he Gears of Collaboration,” LeaderFactor (blog), April 24, 2018, https://www.leaderfactor.com/single-post/2018/04/24/Innovation-is-a-Social-Process-So-Oil-the-Gears-of-Collaboration.
6. Ronald S. Burt, “Structural Holes and Good Ideas,” American Journal of Sociology 110, no. 2 (2004): 349.
7. Amy Feldman et al., “Next Billion-Dollar Startups 2016,” Forbes, October 19, 2016.
Chapter 6
1. Steve Jobs, Stanford Commencement Speech, June 12, 2005.
2. Mason A. Carpenter, Gerard Sanders, and Hal B. Gregersen, “Bundling Human Capital with Organizational Context: The Impact of International Assignment Experience on Multinational Firm Performance and CEO Pay,” Academy of Management Journal 44, no. 3 (2001): 493.
3. Walter Isaacson, Einstein (New York: Simon & Schuster, 2007), 2.
Chapter 7
1. How the innovation premium is calculated:
Step 1: In assessing a company’s current valuation, HOLT determines the next two years’ worth of cash generation from existing businesses for each firm based on the consensus estimate of earnings and revenues by analysts. The consensus estimate of earnings and revenues is based on the median of the combined estimates of carefully screened analysts covering a public company as selected by Institutional Brokers Estimate System). Benchmarks for historical periods (as are used in the innovation premium) use actual reported profitability and reinvestment rates as the starting point for the cash-flow forecasts.