In the wake of the worst US economic catastrophe since the Great Depression, everybody realized this: Making money is harder than we thought. So, this year, books on innovation had special resonance. Luckily, there were some great ones out there. So many, in fact, that this year’s best-of list includes two “companion volumes”–other good books from this year that cover similar material from another perspective.
These are the best books I read this year:
1. Design-Driven Innovation – Roberto Verganti. A fascinating book that looks at companies that don’t merely create new products, but develop products and services that create new meaning for customers. Is that important? Well, companies that do it well avoid commoditization and generate outsized profits for long periods of time. Think Apple.
(companion volume: The Design of Business by Roger Martin)
2. Discovery-Driven Growth – Rita Gunther McGrath and Ian MacMillan. Verganti’s book covers the more creative side of innovation, while McGrath and MacMillan discuss the process that established companies should use to improve their innovation efficiency–that is, bringing more successful products to market and spending less on the failures. The central lesson: do more work on paper, and scrupulously document & validate assumptions as you go.
(companion volume: Innovation Tournaments by Christian Terweisch and Karl Ulrich)
3. Enterprise 2.0 – Andrew McAfee. A clear description for the general business audience of how web 2.0 products, like social network software, wikis, messaging services, and the like, can be deployed to help corporations work more effectively. Excellent combination of case studies, theoretical models, and a clear-eyed assessment of the obstacles in the way of wide adoption.
4. Think Again: Why Good Leaders Make Bad Decisions and How to Keep it From Happening to You – Sydney Finkelstein, Jo Whitehead and Andrew Campbell. A timely book that shows how smart, experienced people can make terrible decisions, and what safeguards companies can use to improve their decisionmaking. Illuminates the many cognitive biases at work during the decision process, which helps the reader to understand why so many decisions that look atrocious in hindsight were considered reasonable and logical at the time.
5. Collaboration – Morten Hansen. Discusses how collaboration in business works, and when it doesn’t work, then provides a map for companies to improve their collaborative behavior – including unifying your workforce, nurturing “T-shaped” management and using networks intelligently. Key message: collaboration has a cost, and you need to make sure the payoff of collaboration outweighs it.