The Innovator's Hypothesis: How Cheap Experiments Are Worth More than Good Ideas

by Michael Schrage

Overview

Achieving faster, better, cheaper, and more creative innovation outcomes with the 5x5 framework: 5 people, 5 days, 5 experiments, $5,000, and 5 weeks

What is the best way for a company to innovate? Advice recommending “innovation vacations” and the luxury of failure may be wonderful for organizations with time to spend and money to waste. The Innovator’s Hypothesis addresses the innovation priorities of companies that live in the real world of limits. Michael Schrage advocates a cultural and strategic shift: small teams, collaboratively—and competitively—crafting business experiments that make top management sit up and take notice. He introduces the 5x5 framework: giving diverse teams of five people up to five days to come up with portfolios of five business experiments costing no more than $5,000 each and taking no longer than five weeks to run. Successful 5x5s, Schrage shows, make people more effective innovators, and more effective innovators mean more effective innovations.

Product Details

ISBN-13:	9780262528962
Publisher:	MIT Press
Publication date:	02/12/2016
Series:	The MIT Press
Edition description:	Reprint
Pages:	256
Product dimensions:	6.00(w) x 8.90(h) x 0.70(d)
Age Range:	18 Years

About the Author

Michael Schrage is a Research Fellow at the MIT Sloan School of Management's Initiative on the Digital Economy. A sought-after expert on innovation, design, and network effects, he is the author of Serious Play: How the World's Best Companies Simulate to Innovate, The Innovator's Hypothesis: How Cheap Experiments Are Worth More than Good Ideas (MIT Press), and other books.

Table of Contents

Preface vii

Acknowledgments xiii

I The Innovator's Hypothesis

1 The Innovator's Visoin 3

2 What Is a Business, Hypothesis? What Are Business Experiments? 9

II The Innovator's Focus

3 Ideas Are the Enemy 17

4 Simple, Fast, Cheap, Smart, Lean, Important 35

5 The Fundamental Value Innovation: Stealing from Warren Buffet 49

6 Investing in Experiments 65

III The Innovator's Portfolio

7 Blockbusted: A Case Study in Experimental Frustration and Failure 77

8 Exploring and Exploiting Experimentation: The 5×5×5 Approach 95

9 The 5×5 Portfolio: Three Real World Examples 103

10 Key Steps to the 5×5 119

IV The Innovator's Culture

11 Crafting Great Business Experiments: Three Themes 141

12 A Guide for X-Teams 155

13 What Makes "Hypothesis" So Hard? 177

14 Q & A 191

V Exploring The 5×5 Exponential Future

15 Experimenting with Experimentation 197

Appendix: The Innovator's Hypothesis Math 213

Bibliographic Essay 221

Index 229

What People are Saying About This

Jim Manzi

This is a really terrific book. The style is disarmingly casual but Schrage makes important fundamental points about how business could and should explore experimentation to create profitable innovation.

Brad Feld

If you, like me, believe that ideas are worthless in the context of innovation, this is the book for you. Michael Schrage presents us with an excellent methodology, using business hypotheses and rapid experiments, along with lots of examples, for accelerating the innovation process, rather than just getting stuck on ideas.

Peter Steinlauf

Most books on innovation fail to deliver practical guidance that a business can execute immediately. The Innovator's Hypothesis isn't one of them. Michael Schrage's 5x5 framework has helped us instill and sustain a true ethos of experimentation in our organization.

Andy Sieg

Michael Schrage has created a powerful and practical guide for innovators in organizations large and small. He vividly illustrates that the road to a bold and brilliant future is often best travelled in steps that are simple, small, fast, and frugal. You'll never think the same way about innovation.

Dan Ariely

In a world where intuition too often rules, it is important to realize the value of testing and exploring the world around us. In The Innovator's Hypothesis, Michael Schrage provides a practical guide for a simple and promising way to force ourselves to do better for ourselves, our customers, and society as a whole.

Qi Lu

Michael Schrage's writing has profoundly influenced my work over the years. The core essence of this book is a must-read for anyone seeking to accelerate the pace of innovation.

Victoria R. Montgomery-Brown

As CEO of a 21st century company, I need to make sure that we are catalyzing innovation, not just thinking about it. The Innovator's Hypothesis is the first book I've read that explains how to do this through a clear methodology. It's 'must' reading for any business leader.

Seth Godin

Schrage delivers (again). This is a new classic, a book that will change the way thousands of companies innovate, grow, and thrive.

Endorsement

Schrage delivers (again). This is a new classic, a book that will change the way thousands of companies innovate, grow, and thrive.

—Seth Godin, author of The Icarus Deception

From the Publisher

In a world where intuition too often rules, it is important to realize the value of testing and exploring the world around us. In The Innovator's Hypothesis, Michael Schrage provides a practical guide for a simple and promising way to force ourselves to do better for ourselves, our customers, and society as a whole.

—Dan Ariely, James B. Duke Professor of Psychology and Behavioral Economics, Duke University; author of Predictably Irrational and The Upside of Irrationality

Michael Schrage has created a powerful and practical guide for innovators in organizations large and small. He vividly illustrates that the road to a bold and brilliant future is often best travelled in steps that are simple, small, fast, and frugal. You'll never think the same way about innovation.

—Andy Sieg, Managing Director, Bank of America Merrill Lynch

This is a really terrific book. The style is disarmingly casual but Schrage makes important fundamental points about how business could and should explore experimentation to create profitable innovation.

—Jim Manzi, Chairman, Applied Predictive Technologies

If you, like me, believe that ideas are worthless in the context of innovation, this is the book for you. Michael Schrage presents us with an excellent methodology, using business hypotheses and rapid experiments, along with lots of examples, for accelerating the innovation process, rather than just getting stuck on ideas.

—Brad Feld, Managing Director, Foundry Group; author of Startup Communities; and coauthor of Venture Deals

Most books on innovation fail to deliver practical guidance that a business can execute immediately. The Innovator's Hypothesis isn't one of them. Michael Schrage's 5x5 framework has helped us instill and sustain a true ethos of experimentation in our organization.

—Peter Steinlauf, Chairman of the Board and “Chief Experiment Officer,” Edmunds.com

Michael Schrage's writing has profoundly influenced my work over the years. The core essence of this book is a must-read for anyone seeking to accelerate the pace of innovation.

—Qi Lu, Executive Vice President, Applications & Services Group (ASG), Microsoft Corporation

As CEO of a 21st century company, I need to make sure that we are catalyzing innovation, not just thinking about it. The Innovator's Hypothesis is the first book I've read that explains how to do this through a clear methodology. It's 'must' reading for any business leader.

—Victoria R. Montgomery-Brown, CEO, Big Think

The Innovator's Hypothesis is a brilliant breakthrough of a book that includes the first fresh thinking on innovation in years. Simple, profound, empowering methods any company can use immediately.

—Rosabeth Moss Kanter, Ernest L. Arbuckle Professor of Business Administration, Harvard Business School; author of SuperCorp: How Vanguard Companies Create Innovation, Profits, Growth, and Social Good

Schrage delivers (again). This is a new classic, a book that will change the way thousands of companies innovate, grow, and thrive.

—Seth Godin, author of The Icarus Deception

Rosabeth Moss Kanter

The Innovator's Hypothesis is a brilliant breakthrough of a book that includes the first fresh thinking on innovation in years. Simple, profound, empowering methods any company can use immediately.