
No-Excuses Innovation
Strategies for Small- and Medium-Sized Mature Enterprises
Categories
Business
Content Type
Book
Binding
Kindle Edition
Year
2022
Publisher
Stanford Business Books
Language
English
ASIN
B0B4F11KDD
ISBN13
9781503633469
File Download
PDF | EPUB
No-Excuses Innovation Plot Summary
Introduction
In a world of relentless change and disruption, the ability to create and innovate has become the defining skill of our time. While many organizations struggle to maintain relevance in rapidly evolving markets, those who embrace a creator's mindset find themselves not merely surviving but thriving amidst uncertainty. The difference between stagnation and growth often lies not in external circumstances but in our willingness to take ownership of innovation. This journey into innovation isn't reserved for Silicon Valley startups or Fortune 500 companies with massive R&D budgets. Small and medium-sized enterprises possess unique advantages in their ability to pivot quickly, maintain close customer relationships, and implement changes without bureaucratic hurdles. The pages ahead will reveal how companies of all sizes have transformed their trajectories through innovation, not as a sporadic event but as a deliberate, systematic approach that can be learned, practiced, and mastered by anyone willing to embrace the challenge.
Chapter 1: Embrace Innovation as Your Survival Strategy
Innovation isn't a luxury—it's the fundamental survival strategy for businesses in today's competitive landscape. At its core, innovation means implementing creativity in a way that creates commercial value. It's not merely having novel ideas but successfully translating those ideas into products, processes, services, or business models that meet market needs and generate revenue. The story of Wes-Tech Automation Solutions provides a compelling illustration of this principle in action. In 2016, Wes-Tech faced a transformative opportunity when approached by NOVUS, an emerging electric vehicle manufacturer. NOVUS needed to mass-produce its next-generation electric vehicle, NOVISSIMA, but faced significant challenges. The company lacked collective capability in automated assembly and had limited experience with fragile body components in high-volume production settings. Moreover, they established an extremely aggressive timeline by industry standards. This environment was volatile, uncertain, complex, and ambiguous—a true VUCA situation that demanded innovation. Traditional manufacturers might have declined this challenging project or attempted to force it into existing processes. Instead, Wes-Tech's leadership—Steve McShane, John Veleris, and George Garifalis—saw this as an opportunity to lead their industry through collaboration with NOVUS to renew it. The team abandoned their standard practice of delegating projects to individual engineers and formed a small core team of top technical and business experts who met daily with NOVUS and other suppliers. They immersed themselves in understanding NOVUS's needs, culture, and technical challenges. What emerged was a new service paradigm that revolutionized the custom automation systems industry. Wes-Tech learned to return to first principles, innovate rapidly, and accomplish what seemed impossible. They developed expertise in leveraging internal capabilities while working collaboratively with external partners. The result wasn't just a successful project but a transformation of Wes-Tech's business model, establishing them as a leader in a new market category. The key steps in embracing innovation as a survival strategy begin with recognizing opportunities where others see only challenges. Next, assemble diverse teams with complementary expertise who can tackle problems from multiple angles. Then, be willing to abandon standard processes when they don't serve the situation at hand. Create environments where rapid learning and adaptation are encouraged, and develop systems for capturing and implementing insights gained through challenging projects. Remember that innovation doesn't require massive upfront investments or radical departures from your core business. Wes-Tech started with a relatively small initial investment, testing their approach with a lead customer before scaling up. This "place small bets first" approach minimizes risk while maximizing learning opportunities.
Chapter 2: Master Design Thinking for Real-World Impact
Design thinking is a methodology that captures the essence of innovation regardless of whether we're considering product, process, service, or business model innovation. At its heart, design thinking is a human-centered approach that focuses on deeply understanding customer needs, generating multiple possible solutions, testing ideas with users, and constantly iterating based on feedback. Consider the transformation of Breuer Electric Manufacturing Company, a third-generation family-owned manufacturer of electric cleaning equipment. By the late 1990s, the company was struggling against larger competitors who had achieved greater operating efficiencies through mergers and consolidation. Linda, the founder's granddaughter who was running the company, recognized that without innovation, Breuer Electric would not survive in an increasingly competitive landscape. Linda engaged with Herbst LaZar Bell (HLB), a design development firm, to explore potential innovation opportunities. The HLB team began by immersing themselves in understanding both the manufacturing capabilities of Breuer Electric and the needs of end-users. Through shadowing users, they discovered that while commercial floor-cleaning machines were traditionally large and cumbersome by necessity—needing to carry clean water for cleaning and then collect dirty water—this size created significant problems. Many users, particularly in Asian and Latin American markets, were smaller in stature and struggled with maneuvering these machines. Additionally, the bulky size made it difficult to clean near shelving without causing damage. This research led to a breakthrough insight: what if they could reduce the physical size without reducing cleaning capacity? The engineering team theorized that by inserting a flexible bladder inside the unit, dirty water could displace the space where clean water had been, potentially reducing the machine's overall size by as much as half. This would create a revolutionary advantage in the market. To implement design thinking effectively, the team followed a structured phase-gate process. They began with minimal investment in research and concept development, gradually increasing their commitment as they validated their ideas. They created multiple concepts—over a hundred sketches—and developed several full-size mockups for testing with users. Rather than using traditional focus groups, they had users individually evaluate the prototypes and write down their responses before discussing them, preventing groupthink and ensuring authentic feedback. The resulting product reduced the machine's size by 40% while maintaining cleaning capacity. The new design was not only more maneuverable and caused less damage to surrounding fixtures but also appealed to a broader range of users. This innovation allowed Breuer Electric to survive and eventually thrive as a leader in their industry. To master design thinking in your organization, start by placing small bets on research and concept exploration before making larger investments. Develop genuine empathy for your users through direct observation rather than relying solely on what they say they want. Generate multiple solutions and test them quickly with real users. Finally, be willing to challenge industry assumptions about what's possible—often the biggest innovations come from questioning constraints that everyone else has accepted as immutable.
Chapter 3: Harness the Power of Emotional Design
Emotional design recognizes that beyond functionality, successful products and services must connect with users on a deeper level. This approach isn't limited to aesthetics—it encompasses how users feel when interacting with your offering across every touchpoint. When products evoke positive emotions, customers not only pay premium prices but become advocates who spread the word about their experiences. The journey of Pattern Bioscience illustrates how emotional design transforms even highly technical products. Nick, an electrical engineer, along with a mechanical engineer and a dermatologist, founded Pattern to address a critical healthcare challenge: pneumonia diagnoses that took nearly a week, despite being the number one infectious killer worldwide. They developed revolutionary technology that could isolate and identify live bacterial cells and measure their response to antibiotics in just 3-4 hours instead of days. While their proof-of-concept device worked technically, the team recognized that to succeed in the marketplace, they needed hospital microbiology lab directors—their customers—to emotionally connect with the product. These medical professionals, though scientifically trained, are still influenced by design and aesthetics when making purchasing decisions. The team understood that their device would be "the face" of the company, its ambassador to the market. Working with design firm Herbst Produkt, they created a final design that reflected the company's core identity—using optical patterns to differentiate bacteria inside microscopic droplets. The resulting product wasn't just functional; it was visually striking and intuitive to use. This emotional connection with customers helped Pattern secure the attention and investment needed to bring their life-saving technology to market. To implement emotional design in your own products or services, begin by identifying all touchpoints where customers interact with your offering. For each touchpoint, consider not just functionality but how users feel during and after the interaction. Research shows price points can increase dramatically when emotional design is employed—the OXO Good Grips peeler sells for approximately $9 compared to functional peelers at under $1, despite using nearly identical blades. Remember that emotional design applies equally to services, digital products, and business-to-business offerings. Even industrial products benefit from thoughtful design that considers user comfort, intuitive operation, and visual appeal. Companies that excel at design grow revenues and shareholder returns at nearly twice the rate of industry peers, according to McKinsey research. When approaching a new product or service development, ask yourself: "What emotions do I want my customers to experience?" Then design explicitly to evoke those feelings. The most successful companies create offerings that customers not only use but love—and emotional design is the bridge between mere utility and genuine customer delight.
Chapter 4: Deploy Proven Innovation Processes and Tools
Innovation processes and tools serve as the essential framework that transforms creative ideas into commercial successes. They provide structure and discipline to what might otherwise be a chaotic endeavor, ensuring that investments in innovation yield measurable returns. While processes alone cannot guarantee innovation success, they dramatically improve your odds by guiding teams through proven pathways to market impact. Midtronics, a leader in battery management for the automotive industry, exemplifies the effective deployment of innovation processes. Founded in 1984 by Steve McShane, the company grew from a small operation to a global leader through systematic innovation. One critical tool in their arsenal was a well-defined phase-gate process that guided ideas from conception to commercialization. In the late 2010s, as Midtronics sought to expand beyond its core business supporting internal-combustion vehicles, Jason Ruban took on responsibility for a newly formed innovation initiative. He quickly recognized that the company's ad hoc approach to innovation, which had worked when they were smaller, was causing valuable ideas to be lost. As he noted, many ideas were simply forgotten "in the bottom of a beer glass at the airport" after customer visits, despite their potential value. In response, Jason established an internal phase-gate process to capture the flow of innovative ideas. The process comprised two key phases. First, anyone could submit an idea via email, addressing three simple questions: describe the idea, explain its impact on customers or markets, and outline its impact on Midtronics. This low but essential hurdle required submitters to think through their proposals rather than offering passing thoughts. Second, teams would review proposals, group similar concepts, and assign individuals to develop simple business cases addressing feasibility, marketability, and potential market size. This structured approach allowed Midtronics to feed promising ideas into their new product development process, converting concepts into profitable products. Equally important, the process helped identify potential customer needs beyond current problems, positioning the company to capitalize on emerging opportunities in electric vehicle battery management and other growth areas. To implement effective innovation processes in your organization, begin with a simple phase-gate system that fits your company's size and culture. Ensure that each phase has clear deliverables and that gates have well-defined decision criteria. Start with what Robert Cooper calls a "phase-gate light" approach, which you can enhance over time as your innovation capability matures. Complement your phase-gate process with tools like lean innovation, which emphasizes testing minimum viable products with customers early in the development cycle. Consider open innovation approaches that tap into external expertise through partnerships, customer co-creation, or crowdsourcing. Use visual tools like 2x2 matrices to map your innovation portfolio and ensure you're balancing incremental improvements with more disruptive opportunities. Remember that processes and tools should enable innovation, not constrain it. The most successful innovators, like Midtronics, adapt their processes to fit different types of projects while maintaining the discipline needed to allocate resources effectively and drive ideas to completion.
Chapter 5: Cultivate Your Innovators and Their Environment
Innovation doesn't happen in a vacuum—it emerges from the minds and collaborative efforts of talented individuals working within supportive environments. Understanding who these innovators are, how they think, and what conditions enable their success is critical for any organization hoping to thrive through innovation. Nancy Dawes exemplifies the characteristics of what Griffin, Price, and Vojak call "Serial Innovators"—those rare individuals who repeatedly create breakthrough innovations in mature organizations. During her career at Procter & Gamble, Nancy led transformations that had significant impacts on the company's top and bottom lines. She reinvented the once-stagnant Pringles brand, tripling its value by creating a new "crisps" product category. Later, she grew Olay into one of P&G's billion-dollar brands by reframing the beauty aisle in mass-market retail stores and creating a new "masstige" (mass market plus prestige) anti-aging skincare category. What made Nancy effective wasn't just technical expertise—it was her ability to engage deeply with problems, seeking patterns where others saw only data points. She approached projects with tenacity, seeing initiatives through to completion despite obstacles. She understood the business implications of her innovations and could articulate how they would create value. Perhaps most importantly, she built relationships and influenced others, bringing colleagues along with her vision through informal leadership. In smaller organizations, innovation often emerges from different patterns. At Midtronics, Kevin Bertness emerged as their Serial Innovator. As CTO, Kevin demonstrated a burning curiosity and willingness to explore ideas that others might dismiss. As Steve McShane put it, "If I can get you interested in something, you can do it." Kevin was given "permission to fail"—learning through experiments that might catastrophically fail in the lab, but ultimately led to breakthrough insights. To cultivate innovators in your organization, focus first on identifying those with natural innovative tendencies. Look for individuals who ask different questions, connect seemingly unrelated ideas, and show passion for solving customer problems. These may be people who don't fit neatly into organizational hierarchies but demonstrate the four characteristics of Serial Innovators: they engage deeply with problems, pursue projects tenaciously, understand business implications, and work effectively with others. Create an environment where these innovators can thrive by giving them meaningful problems to solve and the resources necessary to explore solutions. Protect them from organizational politics and short-term pressures that might derail their work. Manage them relationally, not transactionally—understand their motivations and provide the right balance of guidance and autonomy. Remember that innovation requires diversity of thought and perspectives. While Serial Innovators often drive breakthrough innovations, incremental improvements come from engaging your broader workforce. Help employees develop creative confidence by connecting innovation to their existing skills and interests. Show them that innovation isn't mysterious—it's an extension of problem-solving skills they already possess but applied with greater intention and method. The most innovative organizations create systems that identify, develop, and retain innovators while simultaneously building an innovation-friendly culture that engages everyone in continuous improvement. They recognize that innovation is fundamentally about people—their insights, their collaborations, and their persistent efforts to create something better.
Chapter 6: Implement Strategic Innovation Management
Innovation without strategic direction resembles a ship without a rudder—powerful but aimless. Strategic innovation management aligns creative efforts with organizational goals, ensuring that investments in new ideas generate meaningful returns. It provides the context and purpose that transforms random innovation attempts into a cohesive system for sustainable growth. At Midtronics, strategic innovation management took shape through a deliberate planning process. The leadership team formulated a straightforward strategy with three clear objectives: grow the current business supporting battery management for internal-combustion engines, expand into specific geographic regions, and develop new applications beyond those currently addressed, including vehicle electrification. This clarity enabled everyone to understand how innovation efforts connected to the company's future. Midtronics employed a planning structure similar to the Objectives, Goals, Strategies, Measures, Tactics (OGSMT) approach described in the book. At the highest level, their objective was simple yet ambitious: to lead in improving how the world manages batteries. This vision cascaded down to specific goals, strategies, measures, and tactics that guided day-to-day decisions. This alignment allowed the company to make targeted investments in innovation while maintaining focus on their core business. The power of their strategic approach became evident when Midtronics explored opportunities in electric vehicles. Rather than making massive speculative investments, they bought their first Toyota Prius in 2001 to begin understanding how hybrid vehicles worked. By 2008, they had created a product to capture information about hybrid battery conditions. While this initial product didn't sell well, it positioned the company to respond when Nissan needed help with their all-electric Leaf just six months before launch. Because Midtronics had been systematically building knowledge in this area, they could create the first electric vehicle module balancer in time for Nissan's launch—something no competitor could accomplish. To implement strategic innovation management in your organization, begin by clarifying your company's overall direction and competitive advantage. Are you pursuing differentiation, low cost, or focus on a specific niche? How does innovation support this strategy? Establish a simple planning structure—whether OGSMT, V2MOM (Vision, Values, Methods, Obstacles, Measures), or OKRs (Objectives and Key Results)—that connects innovation activities to strategic priorities. Recognize that innovation can occur in three main categories: configuration (business models and operations), offering (products and services), and experience (customer engagement and brand). Most companies focus predominantly on product innovation, but competitive advantage often comes from innovations in business models or customer experience. Create a balanced portfolio of innovation investments across different time horizons and risk levels. Will Sampson, Midtronics' president, describes their approach as a cycle of penetration (establishing value propositions), reinvention (creating reasons for customers to upgrade), and expansion (solving additional customer problems). This balanced approach ensures both near-term results and long-term renewal. Finally, attend to the cultural and organizational aspects of strategic innovation management. Foster a renewal-friendly culture that values exploration alongside optimization. Avoid creating separate "innovation labs" disconnected from the core business; instead, build mechanisms that enable the entire organization to contribute to and benefit from innovation efforts.
Chapter 7: Learn from Success: The Midtronics Story
The journey of Midtronics from a small operation to an industry leader provides a comprehensive case study in how innovation transforms companies. Founded in 1984 by Steve McShane, Midtronics addresses battery management needs for the transportation industry, with products ranging from handheld car battery testers to sophisticated diagnostic systems for electric vehicles. Midtronics' innovation story began when Steve discovered that Motorola was divesting its electronic battery tester business based on conductance measurement technology. Where Motorola saw limited potential, Steve recognized opportunity. After acquiring the business for the book value of inventory, he immediately began testing market assumptions. While Motorola had routinely discounted the product to $100, Steve experimented with raising the price—and found customers willing to pay significantly more for a product that delivered genuine value. The company's breakthrough came in 1993 when Steve began working with Ford. Initially facing resistance from Ford's chief battery engineer, Karl Keckan, Steve persisted by listening carefully to Karl's concerns and demonstrating how Midtronics' technology could solve Ford's battery warranty cost problems. This reframing—from selling a tester to addressing warranty costs—transformed the relationship. Midtronics' product became an "essential tool" for all US Ford dealers, commanding premium prices aligned with the value it delivered. This pattern of identifying unmet needs and developing innovative solutions continued throughout Midtronics' history. They created diagnostic chargers that eliminated the need for overnight battery charging during service, developed ways to test alternators without direct access, and pioneered preventive battery maintenance. When electric vehicles emerged, they leveraged their expertise to create specialized tools for this new market, starting with the Nissan Leaf and expanding to General Motors and other manufacturers. What makes Midtronics' approach distinctive is their consistent application of innovation principles. They practice design thinking by deeply understanding customer needs before developing solutions. They employ lean innovation by testing ideas with lead customers before broader rollouts. They manage innovation strategically, balancing investments across their core business and emerging opportunities. To apply lessons from Midtronics in your organization, start by reframing how you think about customer needs. Look beyond what customers explicitly request to understand their underlying challenges. Cultivate relationships with demanding customers who push you to improve—as Steve notes, "There is no champion like a convert, your toughest challenger, as they are the ones who care." Develop a systematic approach to capturing and evaluating ideas, recognizing that innovation requires both creative exploration and disciplined execution. Build a culture where curiosity drives continuous learning and where failure is viewed as a necessary step toward breakthrough insights. Perhaps most importantly, "play the long game" as Midtronics does. Innovation isn't about quick wins but sustained investment in capabilities that create lasting competitive advantage. By balancing short-term optimization with long-term renewal, you can build an organization that doesn't just survive market changes but shapes them to your advantage.
Summary
Throughout these chapters, we've explored how organizations of all sizes can harness innovation to create sustainable competitive advantage. From Wes-Tech's collaborative innovation with NOVUS to Breuer Electric's design-thinking transformation, from Pattern's emotional design approach to Midtronics' systematic innovation management, each story illustrates that innovation success comes not from luck but from deliberate practice guided by proven principles. As Steve McShane's Founding Philosophy at Midtronics reminds us, "The future belongs to those who create." This fundamental truth applies whether you're developing products, reimagining services, or transforming business models. Innovation isn't reserved for tech startups or corporate giants—it's available to any organization willing to invest in understanding customers deeply, generating creative solutions, testing ideas iteratively, and persisting through the inevitable challenges of bringing something new to market. Your journey starts with a simple decision: will you be among those who create the future, or will you merely react to changes created by others? The choice, and the future it creates, belongs to you.
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Review Summary
Strengths: The book offers a compelling exploration of fostering innovation by eliminating common excuses. A significant positive is its emphasis on leadership's role in encouraging risk-taking and creativity. The authors' blend of real-world examples and actionable insights provides a practical roadmap for change. Their extensive experience in engineering and design enriches the content with depth and applicability.\nWeaknesses: Occasionally, the book leans on general concepts that may not be universally applicable to all industries or company sizes. Some readers express a desire for more detailed case studies from a broader range of sectors, which could enhance the book's relevance and depth.\nOverall Sentiment: Reception is largely positive, with many appreciating the motivational tone and practical strategies. The book is highly regarded as a valuable resource for leaders and managers aiming to cultivate a culture of innovation.\nKey Takeaway: Creating a culture of innovation requires a clear vision, strategic alignment, and empowering employees, all while eliminating excuses that hinder progress.
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No-Excuses Innovation
By Bruce A Vojak