Payback: Reaping the Rewards of Innovation - Hardcover

Andrew, James P.; Sirkin, Harold L.; Butman, John

Hardcover

ISBN 10: 1422103137 ISBN 13: 9781422103135

Publisher: Harvard Business Review Press, 2007

Synopsis

If you're like most people, you bet your career and company on innovation--because you must. Payback: Reaping the Rewards of Innovation offers you a new way to think about and manage innovation that will dramatically improve the odds of success.

Authors James Andrew and Harold Sirkin, senior partners in The Boston Consulting Group, describe an approach to managing innovation based on the concept of a cash curve--which tracks investment against time. They ask the questions you need to ask: How much should you invest in a new product or service? How fast should you push it to market? How quickly can you get to optimal value? How much additional investment should you pour into sustaining and building the product or service?

Payback offers you practical and economically sound advice on when to pursue cash flow indirectly by first pursuing other benefits, such as brand and knowledge. It also shows you how to reshape the cash curve by using different business models--integrator, orchestrator, and licenser--each of which balances risk and reward differently.

The authors then present a short list of decisions and activities that you must make--not delegate--to achieve a high return on innovation. You won't find facile answers in Payback--but you will find valuable insights and practical guidance for mastering one of the most challenging and critical business activities: innovation.

About this title

About the Author

James P. Andrew is a senior vice president and director of The Boston Consulting Group (BCG), leads BCG’s innovation practice, and helps companies worldwide to improve the return on their investments in innovation. Harold L. Sirkin is senior vice president and director at BCG and leader of the firm’s Global Operations practice. He consults with companies in many business sectors about their innovation activities.

From the Back Cover

"A good business book makes managers stop and think. A great business book teaches managers how to stop and think. This is a great book. It is hard to imagine an executive team that would not benefit from devoting an entire day to discussing it."
-Geoffrey Moore, Chairman and Founder, TCG Advisors, and author, Crossing the Chasm and Living on the Fault Line

"In The Innovator's Solution, Christensen and Raynor address the holy grail of all organizations: how to generate growth and sustain it over long periods. Avoiding the temptation to provide simplistic formulas, they guide the reader through carefully constructed frameworks that teach how to think about the issues that limit-and provide-growth to organizations."
-Dr. Andrew S. Grove, Chairman of the Board, Intel

"Christensen and Raynor have done a superb job of creating a framework for helping to understand the industry dynamics and for planning your own growth alternatives."
-Pekka Ala-Pietilä, President, Nokia Corporation

"Singapore, as a small nation, needs to be innovative and sensitive to disruptive changes more than other countries. Christensen and Raynor have provided an excellent framework to reduce the randomness of the innovation process. This framework will help in our effort to nurture an environment conducive for enterprises to create and capitalize on disruptive innovations."
-Teo Ming Kian, Chairman, Singapore Economic Development Board

"The Innovator's Solution goes directly to the heart of why large companies have failed to sustain innovation. Christensen and Raynor have a deep insight into the challenges that innovative companies face, and they propose practical, realistic solutions to the dilemmas of innovation. This book will be extremely useful to all managers who are committed to using innovation to sustain their growth."
-Bill George, former Chairman and CEO, Medtronic, Inc.

From the Inside Flap

Unless companies can turn ideas into profits, innovation is just a cash trap--a sinkhole of valuable resources that could be better invested elsewhere. With too many projects and too little payback, it's no wonder that so many companies are dissatisfied with the results of their innovation efforts. So how can leaders increase the odds of success? What they need is a way to take the uncertainty out of innovation outcomes by focusing only on the projects that will generate a profit. Impossible to predict? Not any longer.

In Payback: Reaping the Rewards of Innovation (Harvard Business School Press; January 2007), authors James Andrew and Harold Sirkin show that innovation success has little to do with luck and everything to do with understanding--and controlling--the factors that drive profitability. Based on their work with hundreds of leaders, managers, and innovators, Andrew and Sirkin, both executives at The Boston Consulting Group, offer a breakthrough framework for profiting from innovation. The book will benefit anyone who faces the challenge of generating a payback from a new idea, product, or service.

Payback acknowledges that innovation can deliver four types of benefits besides cash: knowledge, brand, ecosystem, and culture. But the authors contend that even these indirect benefits must ultimately generate cash to be of value. The book offers a means and a mindset to focus sharply on doing only those new things that will provide a return on investment. The authors say companies must be able to measure the factors that determine whether or not an innovation will be profitable. They outline four variables--start-up costs, speed to market, speed to scale, and support costs--that help to make this determination. When analyzed, these four factors provide a reality check in the form of a cash curve that shows whether a project is on track to generate cash.

Just as important to a successful outcome is the innovation model that a company chooses. Andrew and Sirkin explore three different models--integration, orchestration, and licensing--and provide guidelines for making the right choice. The authors also offer recommendations on how to organize and lead innovation efforts more effectively, and present a short list of decisions and activities that must be made to achieve a high return on innovation. The book serves up a rich assortment of company examples, including BMW, Bosch, Citigroup, Danaher, Del Monte, Dolby Laboratories, Linde, Microsoft, Nokia, Philips, QUALCOMM, Renault, Schindler, Siemens, Sony, and many more.

Edition details

• Publisher: Harvard Business Review Press
• Publication date: 2007
• Language: English
• ISBN 10: 1422103137
• ISBN 13: 9781422103135
• Binding: Hardcover
• Number of pages: 228