The Innovator’s Hypothesis | Michael Schrage

Summary of: The Innovator’s Hypothesis: How Cheap Experiments Are Worth More Than Good Ideas
By: Michael Schrage

Introduction

In ‘The Innovator’s Hypothesis,’ author Michael Schrage takes us on a journey to uncover the modern method of innovation that has begun to replace traditional research and development (R&D) models. As the world evolves, businesses are moving away from costly R&D practices, opting for small-scale experiments to test innovative ideas in a quick and cost-effective manner. Driven by success from these humble beginnings, companies can scale up their efforts to drive further innovation. In this summary, we’ll dive deep into how this new way of thinking has streamlined the innovation process, and explore real-world examples such as the 5×5 model and the roles of ‘searchers’ and ‘planners’.

From R&D to Business Experimentation

Businesses are shifting away from the costly R&D model to smaller, inexpensive experiments as a means of innovation. This experimental approach to innovation saves time and money, allowing for a more efficient development process. Windows and Mac products were developed using this experimentation model.

The 5×5 Model for Innovation

The book illustrates the 5×5 model, a modern and efficient approach to innovation, inspired by chemistry class experiments. It focuses on assembling cross-functional teams of 5 individuals who develop and test 5 ideas over the course of 5 weeks. Furthermore, the book outlines how this model can cut down on time and cost compared to the traditional analysis-based R&D model. As an example, the book presents a video game company that implemented the 5×5 method to increase newsletter sign-ups. By conducting fast and cheap experiments, the company was able to change the timing of the newsletter request, test it with users, and ultimately scale up the results. The 5×5 method can be used as an efficient solution to a variety of problems in different industries.

Innovation Mindset

To implement the 5×5 model and foster innovation in your company, a cultural shift is necessary. Traditional top-down managerial approaches can resist experiments coming from small teams. Managers who have a planner mentality might view experiments as a lack of direction. However, a searcher mentality is needed to drive innovation as they admit to not having all the answers and focus on actionable ideas. Therefore, it’s essential to foster a searcher mindset to help bring about innovation in your company.

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