The Chemistry of Strategy tm Newsletter October 31, 2012

Creating a culture of innovation

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The senior team was asking how to translate its parent's strategic direction into specific tactical action. Mike, the president, launched the discussion. "Our parent company has established a strategic direction for all its subsidiaries to adopt a core value of innovation. How do we do it?" I suggested that there are innovation lessons to be learned from the history of AT&T's legendary Bell Labs.

I'm an electrical engineer, educated in New Jersey, the home of the Bell Labs. My engineering professors and fellow students all wondered how Bell Labs was able to innovate again and again. The answers can be found in Jon Gertner's engaging book The Idea Factory.

The Bell Labs defined innovation as “the lengthy and wholesale transformation of an idea into a technological product (or process) meant for widespread practical use.” As their leaders often repeated, “if you haven’t manufactured the new thing in substantial quantities, you have not innovated ... if you haven’t found a market to sell the product, you have not innovated.”

Gertner writes: “While our engineering prowess has advanced a great deal over the past sixty years, the principles of innovation largely have not.” Innovation isn't about hiring creative, Nobel Prize-winning geniuses, although having some on board helps. It isn't about motivational posters and speeches, although reinforcing the commitment to innovation helps. It isn't about luck, although breakthroughs often happen when there is a lucky confluence of events. It is about creating an environment that fosters innovation.

Physical proximity, in the view of Bell Labs President Mervin Kelly, was everything. The Bell facilities were built with long, wide corridors, stairs rather than elevators, and office placements that forced chance interactions between people in different disciplines, such as "geniuses" working closely with engineers and technicians.

Gertner sums up: “Perhaps most important, the institute of creative technology needed markets for its products.” Strategic marketing, which brings you close to the ultimate customers and their problems, is what feeds the innovative environment. Simply put, the people of Bell Labs mainly were looking for good problems.

The answer to the planning team's question, then, is to combine strategic marketing that identifies "good problems" with an environment that nurtures the development of innovative solutions and bringing them to market.

Create a strategic plan with your team

"Management is doing things right,
leadership is doing the right things." -Peter Drucker

The "too good" trap is just one of a myriad of issues that can be identified and dealt with as part of a strategic planning process.

How long have you been saying that you are going to develop your strategic plan, but you haven't yet done so? Why? Perhaps it remains on your to-do list because it feels like a huge, laborious process and you haven't the time to spare to do it. Peak-performing companies have a clearly defined strategic plan…and it doesn't have to take long to create an effective one.

Your executive team costs you over a million dollars a year. Are you fully utilizing them? It's a waste of time and money to create a plan that they don't own and implement.

John W. Myrna

is co-founder of
Myrna Associates Inc


Create and Communicate Your Strategic Plan

John Recommends

The Idea Factory: Bell Labs and the Great Age of American Innovation
by Jon Gertner

Bell Labs laid the foundation for technology innovation in the 20th century.

They conceived and perfected a myriad of status quo-changing technologies -- the transistor, solar cell, communications satellite, cell phone ...

Gertner shares the fascinating history of the Labs' impact while zeroing in on their secrets for sustained innovation.

Read it for the history. Read it for insights on innovation. Read it with sadness as we mourn the loss of one of the 20th century's great institutions.

Speaking Gigs

John loves to share his insights. Email him if you'd like to have him speak at your next meeting.

True or False?

"Less is more."



"We have used Myrna to help us with our strategic planning for over FIVE YEARS. We continue to stay the course."

Rick Werner, President, Independence Tube Corporation


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Copyright 2012 Myrna Associates Inc.