How to be the ‘chief innovation officer’

How to be the ‘chief innovation officer’
Comment E-mail Print Share
First Published: Fri, Sep 26 2008. 11 42 PM IST

The Game-Changer: Penguin, 352 pages, Rs399.
The Game-Changer: Penguin, 352 pages, Rs399.
Updated: Fri, Sep 26 2008. 11 42 PM IST
Face it. The trouble with new management theories, or at least books about new management theories, is that there aren’t too many new management theories.
Fortunately, it doesn’t take all 305 pages of the paperback version of The Game-Changer: How Every Leader Can Drive Everyday Innovation to come to this conclusion. And this isn’t to say that A.G. Lafley and Ram Charan haven’t come up with an interesting read, full of real life examples. It is just that for a book that begins with a clear definition of what they mean by Game-Changer (1. a visionary strategist who alters the game his business plays or conceives an entirely new game), the effort ends up as much more of a reiterating of tried (and repeatedly recycled) and tested management truisms than a game-changing breakthrough in the art of managing for success.
Consider this early summation of the book:
“The overarching or guiding principle for game-changing innovation that delivers sustained organic growth and profits, no matter whether your business is consumer products, services, or business-to-business industrial products, is placing the consumer or customer at the centre of this framework (see chart). While many say they are ‘customer-centric’, few actually put the customer as boss in the centre of the innovation process.”
Innovation; sustained organic growth and profits; customer is king. Sounds like Publishing Management Bestseller 101, doesn’t it?
The Game-Changer: Penguin, 352 pages, Rs399.
Still, the pairing of a successful academic-turned-consultant (“Ram Charan is the most influential consultant alive”–Fortune) and an equally successful chief executive (“A.G. Lafley has made Procter & Gamble great again”–Economist) is always a good enough reason to shell out about Rs1 a page (the Penguin paperback I reviewed is listed at Rs399 in India) and, from a ROI (return on investment) perspective, the book won’t let you down even if you don’t invest your time on every page.
Essentially, the idea behind the book boils down to Charan who, according to the book, has been kicking around the idea of how innovation moves from an idea to the market since 2001. He met Lafley in 2005 and concluded that P&G, where Lafley had unexpectedly become CEO in 2000, would be a good place to showcase this. The rest, as they say, is an attempt at publishing history.
The core of Lafley’s contribution is to use P&G’s successes— and some failures—to illustrate how “the CEO, in fact, must also be the CIO—chief innovation officer”. And if that means a serious overdose of P&G throughout the book, so be it. This is a book that gives 23 pages to Tide (a P&G detergent mega brand) while Crest toothpaste and Pampers diapers get about 11 pages apiece, followed by Pantene haircare (10) and Hugo Boss fragrances (9). Meanwhile, P&G’s largest global rival, Unilever Plc., gets barely passing references on two pages. You get the drift.
Still, the new genre of pulp management books are all about applied theory. And Messrs Lafley and Charan rely heavily not just on P&G but also the other tried and tested corporate icons such as General Electric. It also helps that Lafley is on the board of GE and close to Jeffrey Immelt, the still embattled chieftain of the former Jack Welch empire that has lost quite a bit of its investor glamour under the new CEO.
But the proximity of the authors to GE and P&G (Charan is a consultant for GE) also means that some of the examples used to illustrate larger themes end up being appetizers that leave a reader hungry for actual substance to bite into.
Consider a Lafley example: “In June 2000, we were able to ship only 97% of the cases ordered by customers. That meant we were leaving up to 3% in potential sales ‘on the table.’ Every Monday morning, my leadership team was asked to report on missed cases and what actions were taken to fill orders. We continued the practice until missed cases were in much better control. Today, missed cases run less than 0.4%, and they are no longer a major cause of lost sales and profits.” Ok, so the lesson is that the CEO and his team have to micromanage, I guess. No? Well, I for one would have loved to know— and learnt more from— the “how it happened” than just the “why it happened”.
In fact, Charan and Lafley are much more interesting when they talk about examples other than those of P&G and GE. The example of how Nokia gained its dominance of the Indian mobile phone market is well detailed (India, by the way, gets about 29 pages compared to China’s 15), as is Charan’s own family shoe store example, all the way back in Hapur from 1948. As is the successful positioning and marketing of Gillette’s Mach3, the three-razor blade nicknamed Frankenstein in its prototype phase because of its unsightly bolts.
Also see The eight rules of innovative leadership (Graphic)
Among the book’s other redeeming features are several examples of what didn’t work (failures get about 69 pages) though, again, the P&G examples are all dealt with in a somewhat superficial manner (4 of 11 P&G ideas failed because they were “small ideas”.) The book also attempts to be interactive by having each of the 10 chapters end with an “Ask Yourself Monday Morning” checklist of questions to ask and answer.
The perils of any management book that relies on real examples is that the real examples can backfire or, if you are really unlucky, simply blow up. The Game-Changer ends with a strong chapter called How Jeff Immelt Made Innovation A Way of Life at GE. Interesting stuff but it also jogged my memory of Immelt’s speech at GE’s 2008 annual shareholder meeting in Erie, Pennsylvania, back in April. Immelt notes that he replaced 60% of GE’s top 185 executives since taking over as CEO, four days before the 9/11 World Trade Center bombings, and since sold businesses that generated $50 billion in revenue.
As I write this review on the seventh anniversary of the World Trade Center bombings, I can’t help also note that Immelt had to publicly cut GE’s profit growth targets for 2008 to 0-5% from a promised 10%. And, between 2003-2008, while GE’s profits have nearly doubled, its price-to-earnings ratio (a reflection of how markets and investors value its shares in relation to future profits) has fallen by 50% to early-1990s levels. Tells you that game-changing is easier to read and talk about than implement successfully.
Raju Narisetti is editor of Mint. In a former life, he reported on P&G for The Wall Street Journal, including closely chronicling the Cincinnati company’s game-changing fat substitute, Olestra (brand name Olean), which bombed.
Comment E-mail Print Share
First Published: Fri, Sep 26 2008. 11 42 PM IST