1. Set unreasonable expectations
No company out-performs its aspirations. Non- linear innovation begins with unreasonable goals. Demonstrate that it is actually possible to dramatically outperform the average.
2. Form an elastic business definition
Define your company by what you know (core competencies) and own (strategic assets), not by what you do (products or services). Re-define your market so that you have less than a 10 per cent market share.
3. Promote a cause, not a business
Without a transcendent purpose, individuals will lack the courage to behave like revolutionaries. Charles Schwab co-chief executive officer David Pottruck says, “We are the guardians of our customers’ financial futures [but] around here we think we are curing cancer.”
4. Listen to new voices
Management must learn to listen. Create a process where revolutionaries can be heard. Teach people to challenge, especially young people and newcomers.
5. Establish an open market for ideas
Silicon Valley is a hothouse of business concept innovation due to tightly interconnected “markets” for ideas, capital and talent. Reject the idea that the only place to pitch an idea is “up the chain of command.”
6. Establish an open market for capital
Promote innovation. Help great business ideas pass the financial screens. The goal is to find a big winner, not to make sure there are no losers.
7. Establish an open market for talent
“A” people work on “A” opportunities. To attract, retain and fully utilize “A” people, create an internal auction for talent where executive vice presidents bid against venture managers to attract t he best talent. Become an amalgam of disciplined resource allocation and impromptu resource attraction.
8. Promote low-risk experimentation
Make a lot of small bets. Think of your experiments as a portfolio of options. Pass off risk to strategic partners. Make the important distinction between project risk and portfolio risk. Be prudent and bold, careful and quick.
9. Consider cellular division
Dividing big companies into lots of differentiated, small ones frees human and financial capital from the tyranny of any single business model and provides opportunities to nurture entrepreneurial talent. Small, focussed divisions keep general managers close to the customer.
10. Foster personal wealth accumulation
Share the weath! Pay people like entrepreneurs. Implement employee stock ownership plans. Give deserving employees the chance to swing for the fence.