June 2017 | 

The Power of Little Ideas

The Power of Little Ideas

There is a potentially fatal flaw in innovation thinking today — a false dichotomy. Conventional wisdom says that there are two types of innovation: incremental or radical. To survive, companies must do more than invest in incremental improvements in existing products. We’re told that, to remain relevant and profitable, companies must also invest in radical, disruptive innovation — they must reinvent the future of their industry before someone else does. The rallying cry is “Disrupt or be disrupted.”

In his new book The Power of Little Ideas (HBR Press, 2017), David Robertson argues that for many organizations there’s a better way, or what he calls a “Third Way” to innovate. Robertson, a Wharton professor who teaches Innovation and Product Design, argues that between sustaining and disruptive innovation lies a low-risk, high-reward approach.

This concept took shape in part because of an unlikely source — Robertson’s house painter, Stephen. After Stephen explained why he exclusively uses Sherwin-Williams paint (it provides a range of important services to painting contractors), Robertson took a deeper look. What he found was a business model remarkably similar to the one LEGO used to recover from its brush with bankruptcy in 2003 — one recounted in Robertson’s previous book Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry.

Both companies, and many others whose stories are told in The Power of Little Ideas, found success without disrupting their respective industries. Instead, they created families of complementary innovations around their core products. As Robertson explains, those innovations have three key features: they are designed to carry out a single strategy or promise, they work together to make a central product or service more appealing and competitive without changing it in any fundamental way, and they are closely and centrally managed by the company.

The Power of Little Ideas provides a blueprint for companies seeking to embrace this approach to innovation. The book lays out the potential pitfalls and necessary changes to organizations’ innovation processes, management systems, and team structure. It illustrates best practices from many well-known companies, including such diverse examples as USAA, Guinness, Novo Nordisk, and Victoria’s Secret, and reveals the insights, guidelines, and working principles needed to successfully pursue the Third Way.