What could you learn from ‘Serial Innovators’ by Claudio Fesser (2012, 169 pages)?
Nokia started by selling rubber boots, and then grew to be the largest mobile phone maker in the world, only to spectacularly collapse a few years later. Apple was three months from bankruptcy. Lehman Brothers was phenomenally successful, until 2008…
Why do companies die and how do you keep them alive?
In the book Serial Innovators, the authors argue that companies die because they develop individual and organisation rigidities which prevent them from innovating. They argue that rigidities form at the individual level and at the organisation level.
Individuals rigidities include a lack of self-confidence, and biases and habits become entrenched. All of which make the status-quo more attractive than changing and prevent them from seeing how the world and business environment is shifting around them.
Organisational rigidities form when structures grow, performance management and reward systems become more and more complex and culture solidifies through shared experience, rituals and ceremonies.
The authors argue to counter this, you should do the following seven things.
- Cultivate a desire to make a difference
- Build a team of learners at the top
- Frame the vision and strategy positively
- Allow people to work in self-managed groups
- Promote the individual desire to perform and grow
- Invest in capabilities to develop new assets, skills and relationships
- Cultivate a culture that fosters execution and promotes challenge
You can learn a lot from this book as it mixes the fictional tale of Carl, the CEO of a fictional company (AHD), and academic work from some of the preeminent scholars on individual and organisation behaviour. The book follows Carl’s arrival at the beleaguered company and follows him on his journey of turning the company around. There are many insights to be gained from this book, not only on how to turn around a failing company but also on how to foster an environment and culture where people are free to innovate and grow.
You should consider reading this book if you want to turn around a failing and overly bureaucratic organisation, or if you are just interested in creating a culture of innovation.
Additional points from the book which I found useful are:
- Average life cycle for business is now 15 years
- Management team consider strategies which match their perceived skills and capabilities
- Companies are the right size when the sum of the transaction costs and complexity costs are lowest
- People come together to achieve something that they could not achieve on their own
- Company strategies must be altruistic – now one wants to ‘maximise shareholder value’
- The most important thing a leader can do is create and manage culture
- Non-financial incentives can work better than financial incentives (e.g., moral incentives such as feeling good, or growth incentives such as the opportunity to learn)
- Key capabilities include operational skills, privileged assets, growth enabling skills and special relationships
- Burning platforms only work when the platform is burning