Robert’s Rules of Innovation: Book Review
This book is a well laid out, logical book on how to ensure that your company continues to innovate. This is not a touchy feely book or a feel good cheerleader book like so many business books. If you want practical advice from a person who has been there then this is the book for you. As the book subtitle states this book is “A 10-Step Program for Corporate Survival.”
Robert F. Brands, the author, headed the highly successful company Airspray. Airspray makes consumer products, particularly the highly successful instant foam dispensers. These dispensers foam soap products without an aerosol and are found almost everywhere today.
The book has a number of metrics to determine if your company is truly innovating or only giving inventing lip service. He suggests that companies should track new product sales. New products are generally defined as those introduced in the last five years, however this depends on your industry. If new product sales are less than 15% of total sales then your company is at risk of becoming extinct. Note line extensions are not new products. In Chapter 3 the book describes a complete innovation audit to determine if your company is truly committed being a technology leader. He points out that most companies make the fatal mistake of cutting R&D and new product development budgets when time are tough. If you want your company to survive, this should be the last budget item cut.
Creating successful new products is not enough to survive in the marketplace. Your company must protect its new products with strong IP particularly patents to have sustainable advantage. In addition, you company must understand the patent landscape of your marketplace. “It is proven that those companies with a strong patent portfolio creates much more value to their stakeholders than companies without. Airspray, the case study focused on in the book (the company that brought instant foaming dispensers like hand soap to market) was sold at 15 times EBIT, which proves the point.” This 15 EBIT was twice the going EBIT for similar companies and the main reason for this high valuation was Airspray’s patent portfolio protecting its innovative products.
Robert’s Rules of Innovation is a must read for anyone who wants practical, real world advice on how to ensure that their company does not go the way of the dinosaurs.
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