INDEX

Page numbers in bold refer to figures and tables.

ABB company, 165

A/B experiments, 36

accelerators, innovation, 111–112, 116

acquisitions, 67, 83–84, 92, 111, 131

Adell, Manel, 5

Airbnb.com, 59

Alcoa, 83

Aldi, 174

Allen, Paul, 109

Amazon, 14, 36, 45, 47, 150, 152, 159, 161, 162, 180

Android, 87–88, 97

Ansari X Prize, 108–109

Apple: complex business model of, 92

Jobs’s leadership of, xiii, 13, 18, 42, 118, 166, 185

smart phones produced by, xii, 2, 7

topdown innovation at, 13, 18

Aristotle, 144–145

AstraZeneca, 91

attracting, as phase of innovation process, 81–84, 128

solutions for, 96, 97, 103–110

at Startup Corporation, 128, 130–133, 133

automobile industry, x, 5–6, 86, 113, 153, 174

back-end activities for innovation, 97, 97

Bell Labs, 33

Benioff, Marc, 47

Best Buy, 86

Better Place, x

Bezos, Jeff, 14, 150, 152, 159, 161, 162, 180

biotech industry, 60, 85, 114

Blackberry, 2

BMVSS, 102

BMW, 86, 159

boards, in startups, 56–57

Boeing, 40

bottom-up innovation, 12–20, 15, 21, 22, 36–37, 143, 189, 190

bounded innovation, 102–103, 129, 130, 131, 136

Branson, Richard, 165

breakthrough innovation, 9–12

budgets for, 179

and business plans, 50–51

and business units, 28, 74, 121, 122

and co-creation, 113–114

combined with incremental innovation, 11, 22, 25, 75, 157

compared to scientific discovery, 52

contrasted with incremental innovation, xi–xii, 2–3, 4, 4–6, 5, 7, 11, 12, 25, 28, 96

and curiosity-driven research, 62, 62–64, 64

and customer testing, 151–152

at established companies, 3, 18, 30, 71, 87, 92, 112, 188

and fast seconds, 29

front-end vs. back-end activities for, 96–97, 97

government stimulus of, 71

incentives for, 173, 174, 180–183, 184

and leadership, 42–43, 157–159, 158, 168–169

learning period for, 87, 88, 89

management of, 126–128, 173, 174–175, 184–186

market impacted by, 3, 10, 29

open model of, 12

organizational components of, 24

resources for, 76, 77, 97, 178–179, 179

and risk of failure, 10, 11, 52, 125–126

smart phone as example of, 2, 7, 10

at Startup Corporation, 21–23, 68–69, 78, 78, 190, 190–193

at startups, ix, x, 45–46, 51–52, 69, 91–92

and strategic bets, 15, 18–19, 20, 176, 177, 178, 189

and strategic discoveries, 15, 19–20, 20, 21, 22, 75–76, 96, 97, 178, 190–191

strategy for, 172–173, 173, 175–180, 179

topdown vs. bottom-up, 12–20, 15, 21, 22

and visionary leadership, 42–43

British Airways, 165

British Telecom (BT), 122

Buckley, Ryan, 55

budgets for innovation, 178–179, 179

bureaucracy, 163

business model: and breakthrough vs. incremental innovation, 5, 5, 11, 96, 189

complex, 92

learning period for, 89

and prototyping, 118

and startups, 55, 60, 105

business plans, 50, 50, 51, 168

business units: benefits of, x, 30, 30–37

and breakthrough innovation, 28, 74, 121, 122

and continuous progress, 30, 30, 33

and emergent improvements, 30, 36

and execution, 30–31, 41

at General Motors, 27, 38

and incremental innovation, 14–15, 28–34, 30, 32, 36–37, 74–75, 175, 188–189

limits of, 37–41, 38

structure of, 27, 28

and targeted resource allocation, 30, 31–32

and top-down innovation, 32, 32

Camper, 70

cell phones. See mobile phones; smart phones

Chromecast, 114

Churchill, Winston, 181

CircleUp Network, 106

Cisco, 83–84, 93, 107

Citigroup, 82

cloud computing, 94

co-creation, 113–114

collaboration units, 113–114, 134, 135

combining, as phase of innovation process, 46–49, 49, 84–86, 98, 128

solutions for, 96, 97, 111–114

at Startup Corporation, 128, 133–134, 135

company forces, 76, 77, 77, 78, 126, 129, 131

complexity, management of, 71, 92

Connect + Develop program, 48

Constellium, 107

continuous progress, 15, 16–17, 20, 30, 30, 33

Continuum, 150

Cook, Scott, 185

copying and combining for innovation, 46–49, 49, 98

corporate venture capital (CVC), 103–105, 111, 114, 131–132, 133, 135

creative destruction, 2, 45

creativity: derived from copying and combining, 46, 48

and design units, 98

and innovation process, xv, 79, 80, 129

and organizational culture, 35–36

resources for, 155, 175

Credit Suisse, 107

crowdsourcing, 106, 110, 113

culture, organizational, 119, 139, 142–144, 143

changing, 144–146, 145, 155

and creativity, 35–36

and management systems, 184

as soft foundation, 142, 143, 172

at Startup Corporation, 137, 155

and stealth innovation, 101

curiosity-driven research, 62, 62–64, 64

customers, focusing on, 150–152, 161

Daimler-Benz, 113

data gathering, 100

decision making, 164

Dell, 80, 165, 166

Dell, Michael, 161, 165, 166

Design Continuum, 76

design units, 98–100, 129, 130, 131

Desiguel, 5

Diapers.com, 152

digital photography, 39

Dior, Christian, 5

discovery planning, 117

discovery units, 106–107, 131, 132, 133

divergence-convergences stages of innovation, 75–76

Dropbox, 59

eBay, 45–46

École Politechnique Fédérale de Lausanne (EPFL), 107

Eco-Patent Commons platform, 12

ecosystems, business networks as, 82–83, 132

Edison, Thomas, 87

Elan Pharmaceuticals, 114

Eli Lilly, 109, 121

EMC, 165

emergent improvements, 15, 17–18, 20, 30, 36

employees: abilities of, 146–148

ideas of, 142–143, 152–153. See also bottom-up innovation

energy industry, 39

environment, natural, innovations relating to, 12

established companies, 112

breakthrough innovation at, 3, 18, 30, 71, 87, 92, 112, 188

combination at, 84, 86, 91

complexity managed by, 71, 92

and corporate venturing, 132

execution in, x, 30, 57

investment management in, 50

markets accessed by, 70–71

networks accessed by, 71, 77, 89

“Not Invented Here” syndrome in, 47, 73

planning in, 50, 57

and regional hubs of innovation, 82–83, 108

scaling advantage of, 89, 92, 106

and Startup Corporation, 21, 21, 22, 23, 68, 69, 71, 190–193

startups contrasted with, ix–x, 57, 80, 81, 84

startups imitated by, 46, 71, 73, 74, 75, 89, 91

startups integrated with, 21, 59, 61, 92, 105, 106, 112

execution: and back-end activities, 97

and business units, 30–31, 41, 74

in established companies, x, 30, 57

management of, 157

in startups, 46, 57–58, 60

experimenting, 115–116, 117, 117, 118

exploration-exploitation dichotomy, 15–16

Exxon Mobil, 39

Facebook, 7, 24

failure, xii, 10, 11, 52, 54, 88, 94, 116

fashion industry, 5, 10–11, 80

fast seconds, 7, 29, 106, 152, 173, 176

Fiat, 42

Financial Engines, 60

Ford, Henry, 9, 27, 28, 151–152, 153

foundations for innovation: hard, 142, 172–175, 173, 191

soft, 142, 157, 172, 191

Freer, Zachary, 55

Frog Design, 76, 150

front-end activities for innovation, 96–97, 97

frugal innovation, 89, 90, 91, 103, 129, 177

future life, 100

gaming companies, 80, 113

Genentech, 85, 148

General Electric, 90, 91, 143

General Mills, 83, 86, 106

General Motors, 27, 38, 174

Gerstner, Lou, 42, 159, 166

Gillette, 185

Gilt, 152

goals: and goal-driven research, 62, 62, 64

stretching, 153–154

Godrej & Boyce, 177

Google: A/B experiments at, 36

acquisitions of, 67, 88

Android produced by, 87–88

bottom-up innovation at, 13–14

breakthrough innovation at, 13–14, 179

budget for innovation at, 179

creative destruction at, 45

culture of, 143–144

employees’ projects at, 67–68, 174

Google X research lab at, 148, 168

incremental innovation at, 7, 179

innovations of, 67

search engine of, 67

and television partnerships, 114

government support for innovation, 71, 107, 111, 193

Green Xchange, 12

Groupon, 152

Grove, Andy, 164

Gucci, 5

Guidant, 121–122

Hastings, Reed, 149

Henkel, 35

Hewlett-Packard (HP), 80

Higginson, Andrew, 165

high-speed trains, 34

Honda, 5–6, 132

Hsieh, Tony, 147

IBM, xii, 12, 42, 159, 165, 176–177

ice-harvesting industry, 28–29

IDEO, 76, 150

incentives for breakthrough innovation, 173, 174, 180–183, 184

incremental innovation, 6–9

bottomup approach to, 15, 17–18, 36–37

budgets for, 179

and business units, 14–15, 28–34, 30, 32, 36–37, 74–75, 175, 188–189

combined with breakthrough innovation, 11, 22, 25, 75, 157

and continuous progress, 15, 16–17, 20

contrasted with breakthrough innovation, xi–xii, 2–3, 4, 4–6, 5, 7, 11, 12, 25, 28, 96

and emergent improvements, 15, 17–18, 20

and goaldriven research, 64

importance of, 24–25

investments in, 32–35

resources for, 8, 32, 34, 176

and social media, 7, 24

at startups, 60

and suggestion boxes, 37

top-down approach to, 15, 16–17, 32, 32

incubators, 111–112, 116, 134, 135, 136, 136

Infosys, 186

Innocentive, 109

innovation: accelerators, 111–112, 116

bottom-up, 12–20, 15, 21, 22, 36–37, 143, 189, 190

bounded, 102–103, 129, 130, 131, 136

cells, 107–108, 134

copying and combining for, 46–49, 49, 98

and divergence-convergence stages, 75–76

frugal, 89, 90, 91, 103, 129, 177

import-in, 98–99

incubators, 111–112, 116, 134, 135, 136, 136

interdisciplinary, 184

lead-user, 99

matrix of, 5, 195n7

open vs. closed, 12, 73–74

regional hubsof, 82–83, 108

reverse, 90–91, 103, 129

social, 102

spectrumof, 4, 4

stealth, 100–102, 116, 129, 130, 131, 136

top-down, 12–20, 15, 32, 32, 189

tournaments, 108–110, 110, 131, 133, 133

value, 100. See also breakthrough innovation; incremental innovation; innovation paradox; innovation process

innovation paradox: and breakthrough vs. incremental innovation, xi–xii, 2–3, 16, 25, 188–189

and fast seconds, 29

Startup Corporation’s solution for, 68–69, 126

and stealth innovation, 101

and top-down vs. bottom-up innovation, 16

innovation process: attracting, 81–84, 96, 97, 103–110

combining, 84–86, 96, 97, 111–114

experimenting, 115–116, 117, 117, 118

and front-end vs. back-end activities, 96–97, 97

inspiring, 79–81, 96, 97, 97–103, 98

integrating, 93–95, 97, 97, 120–123, 121

learning, 87–89, 96, 97, 115, 115–118

leveraging, 89–93, 97, 97, 118–120, 119

managing, 77–79

outsourcing, 106

inspiring, as phase of innovation process, 79–81, 128

solutions for, 96, 97, 97–103, 98

at Startup Corporation, 128–130

integrating, as phase of innovation process, 93–95, 128, 140, 140

solutions for, 97, 97, 120–123, 121

at Startup Corporation, 128, 131, 138–140

Intel, 164

and Intel Venture Capital, 82–83

intellectual property, 12, 64

Internet, ix, 40, 45, 46, 48, 54, 58, 59, 70, 109, 114, 117, 118, 135

Intuit, 185

investments in innovation, 32–35

iPad, 7, 42

iPhone, 7, 42

iPod, 10, 42, 92, 113

iTunes, 42, 92, 113

JC Penney, 150

Jobs, Steve, xiii, 13, 18, 42, 87, 118, 146–147, 159, 166, 167–168, 185

Johnson, Ron, 150

Johnson & Johnson, 79–80, 83, 114

Joselevich, Ernesto, 62–63

Kennametal, 85

keyboards, computer, 8–9

Keyence, 36–37

Kodak, 39

Lafley, A. G., 38, 73

Lauren, Ralph, 5

leadership: and breakthrough innovation, 42–43, 157–159, 158, 168–169

and integration of innovation, 94

and leaders as innovation architects, 161–164

and leaders as innovation evangelists, 164–167

and leaders as innovation sponsors, 160–161

and leaders as innovation strategists, 159–160

and personal characteristics of leaders, 167–170

as soft foundation, 142, 157, 172

Leahy, Terry, 150

learning, as phase of innovation process, 87–89, 128

solutions for, 96, 97, 115, 115–118

at Startup Corporation, 128, 134–136, 136

LEDs, 93, 121

leveraging, as phase of innovation process, 89–93, 128

solutions for, 97, 97, 118–120, 119

at Startup Corporation, 128, 137–138, 139

LinkedIn, 7

Linux, 114

Logitech, 8–9, 85, 92, 93, 107, 128

L’Oréal, 147

Lucent Technologies, 122

Luma Institute, 150

management of innovation, 126–128, 154–155, 173, 174–175, 184–186

bottom-up approach to, 14–20, 15, 20

and focusing on customers, 150–151

and infrastructure, 138, 139

and planning, 35

and process control, 162–163

and resource allocation, 32, 32, 155, 162

and risk, 6, 18, 20, 34, 35–36, 53–55, 55, 75, 149

and stage-gate process, 34, 34–35

and strategic bets, 177–178

top-down approach to, 14–20, 15, 20, 32, 32. See also leadership

Mandela, Nelson, 153

Manzoni, Jean-François, xvi,

Marchionne, Sergio, 42

markets: impact of breakthrough innovation on, 3, 10, 29

and innovation process, 78, 96

and market forces, 40, 61, 76, 77, 77, 78, 84, 98, 103, 105, 106, 107, 126, 129, 131, 190, 192

Startup Corporation’s access to, 70–71

Mason, Tim, 165

medical technology, 90

Medwinds, 69–70, 96

Mercadona, 174

Meyer, Thomas, 5

Microsoft, 35, 109, 173

Misys, 112

mobile phones, 1–3, 72, 90–91. See also smart phones

Morita, Akiro, 181

motivation, extrinsic vs. intrinsic, 180, 182

MySpace, 7

nanotubes, 62–63

Nespresso, xiii, 24, 88, 93, 119, 123, 128

Nestlé, xiii, 88, 93, 107, 119, 123

Netflix, 80, 149

networks, 19, 20, 21, 23, 36

external, 12, 18, 72, 77, 135

open, 76–77, 77, 96

and regional hubs of innovation, 83

Startup Corporation’s access to, 68, 69, 71, 72, 77, 77

startups’ access to, 56–57, 59, 104

newspaper industry, 40

Nokia, 1–3, 12, 21, 39, 72, 90

“Not Invented Here” syndrome, 47–48, 73, 130–131, 134

Novartis, 116

open networks, 76–77, 77, 96, 106, 129, 131

open-source intiatives, 112, 114

open vs. closed models of innovation, 12, 73–74

outsourcing, 70, 71, 106, 134

Page, Larry, 179

Palmisano, Sam, 176

Panke, Helmut, 159

paranoia, usefulness of, 164–165

PARC research center, 13, 193

Parmigiani, Pilar, xvi,

partnerships, 113–114

passion: as intrinsic motivation, 180–181

leadership characterized by, 167–168

rewards for, 182, 184

Pasteur, Louis, xiii

patents, 12

Patton, George S., 169

Peapod, 47

Penrose, Edith, 45, 70

Pfizer, 101–102, 114

pharmaceutical industry, 74, 83, 84–85, 114, 116, 121

Philips, 82, 92, 93, 108, 112, 121

Pienaar, François, 153

planning: and continuous improvement, 35

as discovery path, 74–75, 117

in startups, 50–51, 56

strategic, 175, 176

Prada, 5

Procter and Gamble, 38, 48, 73, 79, 83, 106

prototyping, 117–118, 135–136, 136

Qualcomm, 79

Rajaraman, Sunil, 55

R&D (research and development), x, 32–33, 34, 45, 46, 48, 69, 73, 83, 91, 108, 112, 131, 132, 136, 177, 178, 186

Razor, 27

recruiting talent, 147–148

Redpoint Ventures, 59

Reebok, 79

refrigerators, 29, 177

regional hubs of innovation, 82–83, 108

research, curiosity-driven vs. goaldriven, 62, 62–64, 64. See also R&D; scientific research

resources: for breakthrough innovation, 76, 77, 97, 178–179, 179

and employees’ ability to innovate, 155

external, 46

for incremental innovation, 8, 32, 34, 176

internal, 12, 76, 77, 77, 96

management of, 32, 32, 155, 162

required by back-end activities, 97

at research centers, 62, 63, 69

Startup Corporation’s access to, 21, 22, 23, 68, 69, 70, 71, 72, 77, 77

startups ’access to, 58–59, 61, 65, 69, 74

reverse innovation, 90–91

RIM (Research in Motion), 2, 21

risk, 10, 13, 25, 43, 125, 148

aversion to, 41, 104–105

management of, 6, 18, 20, 34, 35–36, 53–55, 55, 75, 149

Roche, 84–85

Rorsted, Kasper, 35

Ruettgers, Michael, 165

Salesforce.com, 47

Samsung, 2, 7

Samwer brothers, 46–47

scaling up, 91–92, 106, 128, 137

Schumpeter, Joseph, 45, 70

scientific research, ix, 52, 57, 61–64, 62, 107, 190

Scripted.com, 54–55

self-confidence, 169–170

Shell, 39

Shelton, Robert, xv, xvi,

Shouraboura, Nadia, 161

Siebel Systems, 119, 184–185

Siemens, 178

Singapore, 165–166

SIT, 150

Sixdegrees, 7

Smart car, 113

smart phones, 1–3, 7, 10

social innovation, 102

social media, 7, 24

Sodexho, 153

Sony, 12, 92, 181

Southwest Airlines, 25

space technology, 108–109

spin-offs, 121–122, 139

stage-gate process, 34, 34–35

Startup Corporation, xiii, xiv, 21–23, 21, 22, 94, 190, 190

and access to market, 70–71

and access to resources, 21, 22, 23, 68, 69, 70, 71, 72, 77, 77

attracting at, 96, 128, 130–133, 133

breakthrough innovation at, 21–23, 68–69, 70, 78, 78, 190, 190–193

combining at, 96, 128, 133–134, 135

compared to startups, 70–73, 72, 190–192

culture of, 137, 155

and established companies, 21, 21, 22, 23, 68, 69, 71, 190–193

growth of, 120

infrastructure of, 120

and innovation paradox, 68–69, 126

inspiring at, 96, 128–130

integrating at, 96, 128, 131, 138–140

learning at, 96, 128, 134–136, 136

leveraging at, 96, 128, 137–138, 139

startups: acquisitions of, 83–84, 92

boards in, 56–57

breakthrough innovation at, ix, x, 45–46, 51–52, 69, 91–92

business models in, 55, 60, 105

compared to Startup Corporation, 70–73, 72, 190–192

copying and combining in, 46–49, 49

established companies’ collaboration with, 69–71, 91–92, 105, 106, 112

execution in, 46, 57–58, 60

governing in, 46, 55–57, 57

incremental innovation at, 60

learning from activities of, 58–61, 61, 69, 71, 73

learning quickly and cheaply in, 46, 50–53, 52

planning in, 50–51, 56

research institutes compared to, 61–64, 64

risk management in, 46, 53–55, 55

and venture capital, 73, 82–83, 84, 86, 104, 105, 131–132, 182

stealth innovation, 100–102, 116, 129, 130, 131, 136

strategic bets, 15, 18–19, 20, 176, 177, 178, 189

strategic discoveries, 15, 19–20, 20, 22, 22, 75–76, 85, 87, 92, 96, 97, 101, 113, 129, 134, 137–140, 178, 190–191

strategy for breakthrough innovation, 172–173, 173, 175–180, 179

suggestion boxes, 37

supply chains, 32, 51, 77, 115, 120, 128, 161

Suzlon Energy, 86

Swatch Group, 113

Tata, 102, 153, 177

technology: breakthrough innovation in, 10

and breakthrough vs. incremental innovation, 4–5, 5

and innovation cells, 107–108

and R&D labs, 32–33

and regional hubs of innovation, 83, 107

and research institutes, 62, 62–63, 107

startups based on, 60

universities’ transfer of, 107

Teller, Astro, 168

Tesco, 146, 150, 151, 165

Tesla, 174

3M, xiii, 67, 174

Tier One project, 109

top-down innovation, 12–20, 15, 32, 32, 189

tournaments, 108–110, 110, 131, 133, 133

Toyota, 25, 38, 79

trade sales, 139–140, 140

Trovit, 58

TWIST program, 151

Twitter, 7

universities, 12, 46, 82, 83, 101, 107

value innovation, 100

Vasella, Dan, 116

Vente-Privee, 48–49

venture capital, ix, 46, 73, 82–83, 84, 86, 182, 188

and corporate venture capital (CVC), 103–105, 111, 114, 131–132, 133

Virgin Atlantic, 165

virtual stores, 85

Walmart, 31, 89, 174

Weizmann Institute, 62–63

Whirlpool, 88–89

Workplace Futures, 49

Wozniak, Steve, 147, 169

Xerox, 13, 165, 193

Y Combinator, 59

YEDA Research and Technology Company, 64

Zajfman, Daniel, 63

Zappos, 47, 147, 159–160

Zara, 10–11, 31, 100