Innovation Book Club

In this episode of the Innovation Book Club, Alex Drago and Wais Pirzad discuss Joseph Schumpeter’s ideas on Creative Destruction.

From Investopedia:

“The term creative destruction was first coined by Austrian economist Joseph Schumpeter in 1942. Schumpeter characterized creative destruction as innovations in the manufacturing process that increase productivity, describing it as the "process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."

Basically, the theory of creative destruction assumes that long-standing arrangements and assumptions must be destroyed to free up resources and energy to be deployed for innovation. To Schumpeter, economic development is the natural result of forces internal to the market and is created by the opportunity to seek profit.

Creative destruction theory treats economics as an organic and dynamic process. This stands in stark contrast with the static mathematical models of traditional Cambridge-tradition economics. Equilibrium is no longer the end goal of market processes. Instead, many fluctuating dynamics are constantly reshaped or replaced by innovation and competition.

As is implied by the word destruction, the process inevitably results in losers and winners. Producers and workers committed to the older technology will be left stranded. Entrepreneurs and workers in new technologies, meanwhile, will inevitably create disequilibrium and highlight new profit opportunities.

In describing creative destruction, Schumpeter was not necessarily endorsing it. In fact, his work is considered to be heavily influenced by The Communist Manifesto, the pamphlet by Karl Marx and Friedrich Engels which decried the bourgeoisie for its "constant revolutionizing of production [and] uninterrupted disturbance of all social conditions."

Here’s a highbrow YouTube lecture on Schumpeter’s Creative Destruction: shorturl.at/rGU08

Here’s a lowbrow YouTube introduction to Schumpeter’s Creative Destruction: shorturl.at/qFZ23

Here’s three questions to help you reflect on what you’ve just heard:

1, To what extent do you agree with Schumpeter’s observations about how capitalism functions?

2, If you were a politician would you embrace creative destruction, reject it, or just try and manage its impact? Why?

3, When was the last time the sector you worked in experienced creative destruction? What will be the underlying factors that would have to change to make it happen again?

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In this episode of the Innovation Book Club, Alex Drago and Wais Pirzad discuss Warren Berger’s noted book A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas.

The book’s blurb:

“In this groundbreaking book, journalist and innovation expert Warren Berger shows that one of the most powerful forces for igniting change in business and in our daily lives is a simple, under-appreciated tool--one that has been available to us since childhood. Questioning--deeply, imaginatively, "beautifully"--can help us identify and solve problems, come up with game-changing ideas, and pursue fresh opportunities. So why are we often reluctant to ask "Why?"

Berger's surprising findings reveal that even though children start out asking hundreds of questions a day, questioning "falls off a cliff" as kids enter school. In an education and business culture devised to reward rote answers over challenging inquiry, questioning isn't encouraged--and, in fact, is sometimes barely tolerated.

And yet, as Berger shows, the most creative, successful people tend to be expert questioners. They've mastered the art of inquiry, raising questions no one else is asking--and finding powerful answers. The author takes us inside red-hot businesses like Google, Netflix, IDEO, and Airbnb to show how questioning is baked into their organizational DNA. He also shares inspiring stories of artists, teachers, entrepreneurs, basement tinkerers, and social activists who changed their lives and the world around them--by starting with a "beautiful question."

You can watch Berger talk about his book here: shorturl.at/elzCN

Here’s three questions to help you reflect on what you’ve just heard:

1, Why do you think Berger states that questions are now more valuable than answers?

2, When thinking about the innovation process, how is Berger’s ‘Why? What if? How?’ framework a useful guide?

3, What’s the question that you constantly return to? Is it a Why, what if or a how question?

Contact us: [email protected] or [email protected]

For some reason, this book isn’t available via Bookshop.org but you can give your hard-earned cash to Jeff Bezos here:

Amazon.co.uk: shorturl.at/wAFJ0

Amazon.com: shorturl.at/mwyX0

In the second episode of the Innovation Book Club, Alex Drago and Wais Pirzad discuss Peter Drucker’s seminal article, The Theory of the Business, originally published in Harvard Business Review in 1994.

The blurb:

“Peter F. Drucker argues that what underlies the current malaise of so many large and successful organizations worldwide is that their theory of the business no longer works. The story is a familiar one: a company that was a superstar only yesterday finds itself stagnating and frustrated, in trouble and, often, in a seemingly unmanageable crisis. The root cause of nearly every one of these crises is not that things are being done poorly. It is not even that the wrong things are being done. Indeed, in most cases, the right things are being done―but fruitlessly. What accounts for this apparent paradox? The assumptions on which the organization has been built and is being run no longer fit reality. These are the assumptions that shape any organization's behaviour, dictate its decisions about what to do and what not to do, and define what an organization considers meaningful results. These assumptions are what Drucker calls a company's theory of the business.”

You can read the article here: shorturl.at/als28

Peter Drucker’s Wikipedia page: shorturl.at/foAGH

Here are three questions to help you reflect on what you’ve just heard:

1, What is the theory of the business for the organisation you’re currently working in?

2, In your opinion, what are the assumptions your organisation gets right and gets wrong?

3, What are you working on ‘fruitlessly’?

Contact us: [email protected] or [email protected]

In this first and pilot episode of the Innovation Book Club, Alex Drago and Wais Pirzad discuss Steven Johnson’s book Where Good Ideas Come From: the Natural History of Innovation.

Here’s the blurb:

“Where do good ideas come from? And what do we need to know and do to have more of them? In Where Good Ideas Come From, Steven Johnson, one of our most innovative popular thinkers, explores the secrets of inspiration.

Steven Johnson has spent twenty years immersed in creative industries, was active at the dawn of the internet and has a unique perspective that draws on his fluency in fields ranging from neurobiology to new media. Why have cities historically been such hubs of innovation? What do the printing press and Apple have in common? And what does this have to do with the creation and evolution of life itself? Johnson presents the answers to these questions and more in his infectious, culturally omnivoracious style, using examples from thinkers in a range of disciplines - from Charles Darwin to Tim Berners-Lee - to provide the complete, exciting, and encouraging story of inspiration.

He identifies the six key principles to the genesis of great ideas, from the cultivation of hunches to the importance of connectivity and how best to make use of new technologies. Most exhilarating is his conclusion: with today's tools and environment, radical innovation is extraordinarily accessible to those who know how to cultivate it. By recognizing where and how patterns of creativity occur - whether within a school, a software platform or a social movement - he shows how we can make more of our ideas good ones.”

Steven Johnson’s TED talk on the book: shorturl.at/pOV48

Here’s three questions to help you reflect on what you’ve just heard:

Contact us: [email protected] or [email protected]

If you want to buy the book then consider supporting your local booksellers with Bookshop.org: shorturl.at/vEI06

Alternatively, if you want to give Jeff Bezos more of your hard-earned cash:

Amazon.co.uk: shorturl.at/lmBGQ

Amazon.com: shorturl.at/jrIKX