Book Summary: “The Innovator’s DNA” by Clayton Christensen et al

Title: The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators
Author: Jeff Dyer, Hal Gregersen and Clayton M. Christensen
Scope: 3 stars
Readability: 4 stars
My personal rating: 5 stars
See more on my book rating system.

If you enjoy this summary, please support the author by buying the book.

Topic of Book

The authors interviewed thousands of entrepreneurs and corporate executives to identify what characteristics separate the innovators from the rest.

Key Take-aways

  • Innovators do not differ psychologically from more conventional executives. Nor is innovation in-born. While twin studies show that 80-85% of intelligence can be attributed to genetics, creativity is only about 30% genetic.
  • Virtually everyone has some capacity for creativity and innovative thinking.
  • Innovations come from repeated behaviors that include:
    • Questioning
    • Observing
    • Networking
    • Experimenting
  • These discovery skills lead to the Associational Thinking (connecting seemingly unrelated ideas) that generate innovative business ideas.
  • Innovative companies have leaders that create a culture where the above behaviors are done in their daily business.
  • Most executives excel at execution, including the following four delivery skills: analyzing, planning, detail-oriented implementing, and disciplined executing. This type of thinking will not lead to disruptive innovation.

Important Quotes from Book

The Innovator’s DNA emerged from an eight-year collaborative study in which we sought a richer understanding of disruptive innovators—who they are and the innovative companies they create. Our project’s primary purpose was to uncover the origins of innovative—and often disruptive— business ideas. So we interviewed nearly a hundred inventors of revolutionary products and services, as well as founders and CEOs of game-changing companies built on innovative business ideas.

We also studied CEOs who ignited innovation in existing companies… competition. Our goal was less to investigate the companies’ strategies than it was to dig into the thinking of the innovators themselves.

As we reflected on the interviews, consistent patterns of action emerged. Innovative entrepreneurs and executives behaved similarly when discovering breakthrough ideas. Five primary discovery skills—skills that compose what we call the innovator’s DNA—surfaced from our conversations. We found that innovators “Think Different.”

A critical insight from our research is that one’s ability to generate innovative ideas is not merely a function of the mind, but also a function of behaviors. This is good news for us all because it means that if we change our behaviors, we can improve our creative impact.

Innovators were simply much more likely to question, observe, network, and experiment compared to typical executives.

We then turned to see what we could learn about the DNA of innovative organizations and teams.

Perhaps one of the most surprising findings from the past thirty years of entrepreneurship research is that entrepreneurs do not differ significantly (on personality traits or psychometric measures) from typical business executives.

The fact is that most entrepreneurs launch ventures based on strategies that are not unique and certainly not disruptive. Among entrepreneurs as a whole, only 10 percent to 15 percent qualify as “innovative entrepreneurs” of the kind we’re discussing.

Our study includes four types of innovators: (1) start-up entrepreneurs (as we described earlier), (2) corporate entrepreneurs (those who launch an innovative venture from within the corporation), (3) product innovators (those who invent a new product), and (4) process innovators (those who launch a breakthrough process).

Innovative companies are almost always led by innovative leaders. The bottom line: if you want innovation, you need creativity skills within the top management team of your company. We saw how innovative founders often imprinted their organizations with their behaviors.

Perhaps not surprisingly, we discovered that the DNA of innovative organizations mirrored the DNA of innovative individuals. In other words, innovative people systematically engage in questioning, observing, networking, and experimenting behaviors to spark new ideas.

How does any innovator think different?

The common answer is that the ability to think creatively is genetic. Most of us believe that some people, like Jobs, are simply born with creative genes, while others are not… If you believe this, we’re going to tell you that you are largely wrong. At least within the realm of business innovation, virtually everyone has some capacity for creativity and innovative thinking.

When we examine the origins of these ideas, we typically find that the catalyst was: (1) a question that challenged the status quo, (2) an observation of a technology, company, or customer, (3) an experience or experiment where he was trying out something new, or (4) a conversation with someone who alerted him to an important piece of knowledge or opportunity.

In fact, the most comprehensive study confirming this was done by a group of researchers, Merton Reznikoff, George Domino, Carolyn Bridges, and Merton Honeymon,who studied creative abilities in 117 pairs of identical and fraternal twins. Testing twins aged fifteen to twenty-two, they found that only about 30 percent of the performance of identical twins on a battery of ten creativity tests could be attributed to genetics. In contrast, roughly 80 percent to 85 percent of the twins’ performance on general intelligence (IQ) tests could be attributed to genetics.7 So general intelligence (at least the way scientists measure it) is basically a genetic endowment, but creativity is not. Nurture trumps nature as far as creativity goes. Six other creativity studies of identical twins confirm the Reznikoff et al. result: roughly 25 percent to 40 percent of what we do innovatively stems from genetics.8 That means that roughly two-thirds of our innovation skills still come through learning—from first understanding the skill, then practicing it, and ultimately gaining confidence in our capacity to create.

Our research on roughly five hundred innovators compared to roughly five thousand executives led us to identify five discovery skills that distinguish innovators from typical executives.

First and foremost, innovators count on a cognitive skill that we call “associational thinking” or simply “associating.” Associating happens as the brain tries to synthesize and make sense of novel inputs. It helps innovators discover new directions by making connections across seemingly unrelated questions, problems, or ideas. Innovative breakthroughs often happen at the intersection of diverse disciplines and fields.

Put simply, innovative thinkers connect fields, problems, or ideas that others find unrelated.

Associating—or the ability to make surprising connections across areas of knowledge, industries, even geographies—is an often-taken-for-granted skill among the innovators we studied. Innovators actively pursue diverse new information and ideas through questioning, observing, networking, and experimenting—the key catalysts for creative associations.

In our research, every high-profile innovator excelled at associating (scoring at the seventieth percentile or higher.

Innovative entrepreneurs often exhibit the capacity to do two things at once: they dive deep into the details to understand the subtle nuances of a particular customer experience, and they fly high to see how the details fit into the bigger picture. Synthesizing these two views often results in surprising associations.

If innovators have one thing in common, it is that they love to collect ideas, like kids love to collect Legos.. This is important because the innovators we studied rarely invented something entirely new; they simply recombined the ideas they had collected in new ways, allowing them to offer something new to the market. Questioning, observing, networking, and experimenting helped innovators slowly build larger, richer stocks of building-block ideas in their heads. The more building blocks they acquired, the better they were able to combine newly acquired knowledge to generate a novel idea.

This knowledge profile typically generates innovative associations in two ways: (1) by importing an idea from another field into his area of deep expertise, or (2) by exporting an idea from his area of deep expertise to one of the broad fields he is exploring where he has shallow knowledge.

The other four discovery skills trigger associational thinking by helping innovators increase their stock of building-block ideas from which innovative ideas spring. Specifically, innovators engage the following behavioral skills more frequently:

Questioning. Innovators are consummate questioners who show a passion for inquiry. Their queries frequently challenge the status quo, just as Jobs did when he asked, “Why does a computer need a fan?” They love to ask, “If we tried this, what would happen?” Innovators, like Jobs, ask questions to understand how things really are today, why they are that way, and how they might be changed or disrupted. Collectively, their questions provoke new insights, connections, possibilities, and directions. We found that innovators consistently demonstrate a high Q/A ratio, where questions (Q) not only outnumber answers (A) in a typical conversation, but are valued at least as highly as good answers

Most innovators are intense observers. They carefully watch the world around them, and as they observe how things work, they often become sensitized to what doesn’t work. They may also observe that people in a different environment have found a different—often superior—way to solve a problem. As they engage in these types of observations, they begin to connect common threads across unconnected data, which may provoke uncommon business ideas.

Observing. Innovators are also intense observers. They carefully watch the world around them—including customers, products, services, technologies, and companies—and the observations help them gain insights into and ideas for new ways of doing things.

Networking. Innovators spend a lot of time and energy finding and testing ideas through a diverse network of individuals who vary wildly in their backgrounds and perspectives. Rather than simply doing social networking or networking for resources, they actively search for new ideas by talking to people who may offer a radically different view of things.

Most executives network to sell themselves, to sell their companies, or to build relationships with people who possess desired resources. In contrast, innovators are less likely to network for resources or career progression; rather, they actively tap into new ideas and insights by talking with people who have diverse ideas and perspectives.

Experimenting. Finally, innovators are constantly trying out new experiences and piloting new ideas. Experimenters unceasingly explore the world intellectually and experientially, holding convictions at bay and testing hypotheses along the way. They visit new places, try new things, seek new information, and experiment to learn new things.

Collectively, these discovery skills—the cognitive skill of associating and the behavioral skills of questioning, observing, networking, and experimenting—constitute what we call the innovator’s DNA, or the code for generating innovative business ideas.

Why do innovators question, observe, network, and experiment more than typical executives? As we examined what motivates them, we discovered two common themes. First, they actively desire to change the status quo. Second, they regularly take smart risks to make that change happen.

”These innovators steer entirely clear of a common cognitive trap called the status quo bias—the tendency to prefer an existing state of affairs to alternative ones.

We found that innovative entrepreneurs (who are also CEOs) spend 50 percent more time on discovery activities (questioning, observing, experimenting, and networking) than CEOs with no innovation track record.

The key skill for generating innovative ideas is the cognitive skill of associational thinking. The reason that some people generate more associations than others is partly because their brains are just wired that way. But a more critical reason is that they more frequently engage in the behavioral skills of questioning, observing, networking, and experimenting. These are the catalysts for associational thinking.

Most executives excel at execution, including the following four delivery skills: analyzing, planning, detail-oriented implementing, and disciplined executing.

It is vital to understand that the skills critical to an organization’s success vary systematically throughout the business life cycle. For example, in the start-up phase of an innovative venture, the founders are obviously more discovery-driven and entrepreneurial. Discovery skills are crucial early in the business life cycle because the company’s key task is to generate new business ideas worth pursuing. Thus, discovery (exploration) skills are highly valued at this stage and delivery (execution) skills are secondary. However, once innovative entrepreneurs come up with a promising new business idea and then shape that idea into a bona fide business opportunity, the company begins to grow and then must pay attention to building the processes necessary to scale the idea.

At this point in the business life cycle, professional managers who are better equipped to scale the business often replace the entrepreneur founders. When such replacement occurs, however, key discovery skills walk away from the top management team.

Eventually, for most organizations, the initial innovations that created the business in the first place complete their life cycle. Growth stalls as the business hits the downward inflection point in the well-known S curve. These mature and declining organizations are typically dominated by executives with excellent delivery skills. Meanwhile, investors demand new growth businesses, but senior executive teams can’t seem to find them because the management ranks are dominated by folks with strong delivery skills. With discovery skills largely absent from the top management team, it becomes increasingly difficult to find new business opportunities to fuel new company growth. The company once again starts to see the imperative for discovery skills.

The key point here is that large companies typically fail at disruptive innovation because the top management team is dominated by individuals who have been selected for delivery skills, not discovery skills. As a result, most executives at large organizations don’t know how to think different. It isn’t something that they learn within their company, and it certainly isn’t something they are taught in business school. Business schools teach people how to be deliverers, not discoverers.

Drawing on a sample of companies that lead both lists, we dove deeply into the practices of some of the world’s most innovative companies… The first insight to emerge from these interviews is that founder innovators typically imprint their organizations with their own innovator’s DNA.

As we talked to innovative founders about creating innovative organizations and teams, they repeatedly discussed the value of populating the organization with people who are like them (in other words, innovative), processes that encourage the innovative skills they depended on (e.g., questioning, observing, networking, experimenting), and philosophies (a culture that encourages everyone to innovate and take smart risks).

If you would like to learn more about innovation in history, read my book From Poverty to Progress.

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