Unrelenting Innovation	3
	Copyright	8
	Contents	9
	Figures and Tables	13
	Foreword	15
	Chapter 1 Why Incumbents Fail	21
	Why Incumbents Fail to Innovate Unrelentingly	23
	Paradox of the Incumbent’s Curse	23
	Telling Examples	25
	The Preeminence of Culture	27
	Traits for Innovation	30
	Practices for Innovation	32
	Culture as a Primary Explanation	35
	Basis for the Book	37
	Conclusion	39
	Chapter 2 Willingness to Cannibalize Successful Products	43
	Why Incumbents Are Reluctant to Cannibalize Products	44
	Organizational Factors	45
	Why Willingness to Cannibalize Is Important	48
	Finite Growth of Current Products	48
	Increasing Rate of Innovation	48
	Limitations of Acquisitions	51
	Challenge of Technological Change	53
	Understanding Technological Evolution	53
	On Which Level to Innovate?	54
	What Is the Pattern of Evolution?	55
	On Which Dimension of Performance to Focus?	57
	Blinded to an Opportunity: Microsoft Keywords?	59
	Crippled by Fear of Piracy: Sony MP3 Player	61
	Decline of an Innovator: Eastman Kodak	65
	A Cycle of Cannibalization: Gillette's Innovations in Wet Shaving	69
	Late Move: HP Tablet	73
	Conclusion	74
	Chapter 3 Embracing Risk	79
	Sources of Risk: Innovation's High Failure Rate	79
	The Reflection Effect: Asymmetry in Perceived Risk	83
	The Hot-Stove Effect: Learning from Failure	85
	The Expectations Effect: Hope Versus Reality	88
	Innovation's Gain-Loss Function: Type 1 and 2 Errors	89
	Case Histories	95
	Gambling on an Embryonic Market: Toyota's Prius	95
	Initial Stage: Striving for Kakushin (‘‘Rapid Innovation’’)—Aim High	96
	Experimentation—Undaunted by Failure	99
	Slow Takeoff—A Testament of Toyota’s Faith and Patience	100
	Eventual Success	102
	Gambling on Growth: Amazon.com	104
	Gambling on Vision: Facebook	110
	Hatch of an Idea in a Dorm Room	111
	Bet on Silicon Valley	112
	Risk-Loving Hacker Culture	114
	News Feed Crisis	117
	To Sell or Not to Sell	117
	Opening the Site to Third-Party Applications	121
	Risk Rewards	122
	Gambling on Scale: Federal Express	123
	Conclusion	126
	Chapter 4 Focusing on the Future	129
	Why Future Focus Is Tough	131
	Hot-Hand Bias	131
	Availability Bias	134
	Paradigmatic Bias	136
	Commitment Bias	139
	Planning for the Future	141
	Predicting and Managing Takeoff	142
	Targeting Future Mass Markets	146
	Predicting Technological Evolution	149
	Analyzing Emergent Consumers	154
	Conclusion	158
	Chapter 5 Incentives for Enterprise	161
	Traditional Incentives: Winning Loyalty	162
	Asymmetric Incentives: Turning Failure into Success	163
	Making Incentives Work: Economics and Psychology of Incentives	168
	Moral Incentives	170
	Social Incentives	171
	Fairness of Incentives	172
	Framing Incentives	174
	Power of Incentives: IBM's Transformation	175
	Incentives for Enterprise: Google	177
	Perks, Options, and Awards	178
	Time Off to Explore: Structure and Fruits of 20% Off	179
	Challenge of Talent Retention	182
	Incentives for Loyalty: General Motors	183
	Technology Troubles	184
	Labor and Union Priorities	186
	Incentives for Innovation: 3M	188
	Structuring Team Incentives: IBM's Learning from Online Gamers	191
	Conclusion	193
	Chapter 6 Fostering Internal Markets	197
	Characteristics of Markets	201
	Markets as Idea Generators	202
	Markets as Talent Pools	204
	Markets as Efficient Resource Allocators	205
	Cascades and Bubbles	207
	Cutthroat Competition	207
	Lack of Cooperation	208
	Failure	209
	Duplication	209
	Lack of Focus	211
	Implementing Internal Markets	212
	Managing Internal Markets	219
	Incentivizing Internal Markets	219
	Setting Up Internal Markets	221
	Conclusion	223
	Chapter 7 Empowering Innovation Champions	225
	Luck Versus Innovation Champions	226
	Characteristics of Champions	228
	Testing Luck	230
	Champions Versus Teams	232
	Champions at the Top Versus the Bottom	234
	Distributed Champions: Google's ``Young Turks'' Program	236
	Serial Champion: Roger Newton	238
	Championing Mass Market of the Future: Tata Nano	242
	Championing a Music Revolution: Apple iPod	247
	Mobilizing an Organization for Innovation: Sony Walkman	251
	Steps in Empowering Champions	255
	Conclusion	256
	Chapter 8 Culture Versus Alternate Theories: Arguments and Evidence	257
	Micro-Theories	258
	Wall Street Effect	258
	Size Effect	261
	Disruptive Technology Effect	264
	S-Curve Effect	267
	Macro-Theories	270
	Macro-Theories in a Nutshell	271
	Refutation of Macro-Theories	273
	Conclusion	280
	Notes	283
	Bibliography	309
	Acknowledgments	327
	The Author	329
	Index	331