Skip to main content

Secondary navigation:

Reading_list

December 2014
Dean Andy Boynton

Reading list


By Dean Andy Boynton

 

In his new book The Innovator’s Hypothesis, MIT research fellow Michael Schrage lobs a full-frontal assault on the belief that ideas are the essence of innovation. As someone who has contributed more than my share to what Schrage calls “the idea of ideas” and their importance to business innovation, I am surprised by the ferocity of this attack—and even more by how much I agree with it.

Subtitled How Cheap Experiments Are Worth More than Good Ideas and published by The MIT Press, the book makes a case for valuing the implementation of ideas over the ideas themselves. The latter are “harmful nonsense”; the “empty calories” of the innovation process, writes Schrage. Ideas are “the enemy,” he says, because they distract innovators from the challenges that matter most: experimentation and implementation.

Schrage points to Greg Linden, whose group at Amazon in its early years “believed that the retailer could create an even better shopping experience for customers if its software could make intelligent recommendations on what to buy” based on their past purchases. Linden “hacked up a prototype,” and an impressive number responded by clicking on the recommendations and adding items to their Amazon shopping carts.  

Schrage’s point: “The prototype enacted the idea. The experiment made the potential real.” True (no one knew it was a good idea until it was tested with the customers), but of course, the idea launched the prototype. Good ideas and experiments go together. You need both.

One-sided as it may be, Schrage’s argument about the importance of experimentation is a good one. It’s hard to argue with his observation: “If you can’t do it, it’s not a good idea.” And too many organizations aren’t doing it. They aren’t adequately testing the ideas to make sure they’re any good or to improve the ideas. That’s key to the implementation.

The Innovator’s Hypothesis (a business hypothesis is defined here as a “testable belief about future value creation”) offers a useful guide to experimentation. Schrage includes case studies of small teams working collaboratively as well as competitively within companies, and adapts Warren Buffett’s approach to value investing—buying dollar bills for fifty cents.

How to get a dollar’s worth of innovation for fifty cents? Schrage’s answer is the “5x5 methodology.” Give a team of five up to five days to come up with five business experiments that cost no more than $5,000 each and take no longer than five weeks to run.

Experimentation is at the heart of our innovation process at the Carroll School. For instance, one of our big ideas has been to establish a one-year master’s program in management (not an MBA) tailored to newly minted liberal arts graduates. We do not adopt ideas because we like the sound of them. We experiment with them and try to learn some lessons from the experimentation.

Last summer, we launched the Summer Management Catalyst Program, designed exclusively for non-management students at Boston College, including graduating seniors. Next summer, we will offer the 10-week program again, this time expanding it to include non-management students from other institutions. We are learning a number of things about this intensive program, such as how to prepare liberal arts students for management careers.

Are we onto something big with this idea? We don’t know yet, but if we are, it will be because the experiment with the summer program demonstrates the value of the idea. It will have (in Schrage’s words) “made the potential real.”