Idea practitioners: Key to every organization's success

Hermawan Kertajaya, Contributor, Jakarta

What's the Big Idea?: Creating and Capitalizing on the Best Management Thinking Thomas H. Davenport and Laurence Prusak with H. James Wilson Harvard Business School Press, Boston. Massachusetts (April 2003) 256 pp

As a consultant, I am well aware of the importance of creative ideas in the consulting business. Every consultation project with a client has its own uniqueness, and is naturally always different from previous ones.

Because these projects cannot be approached using the same methods and generic tools, creative people with new and fresh ideas are always needed to solve problems and simultaneously to develop an organization's competitive advantages.

Davenport and Prusak, veterans in the consulting business, apparently also hold to similar ideas. In their latest book, they describe a group of executives who, to date, have stayed "hidden" but are behind businesses' success. The writers refer to this group as "the idea practitioners". They are the people who study the thinking of business gurus, adjust them to suit real problems they face, then put the modified ideas into practice within their own organizations.

As their first example, the writers compare Westinghouse and GE, both diversified, innovative conglomerates. The businesses of both, too, have some similarities, for instance in broadcasting, power generation, industrial equipment and financing. Nevertheless, why was GE able to become one of the most successful businesses within the last 100 years, while Westinghouse became bankrupt?

Davenport and Prusak consider that the difference in the fates of the two lies in their differing embrace of ideas for business improvement. GE has a reputation primarily for its innovative business and management ideas, rather than any breakthrough products or services. In contrast, although Westinghouse did have innovative products, the only business notions it pursued involved financial analysis, acquisition and divestiture, and a late-in-the-game approach to quality.

GE, especially under Jack Welch, did not just talk about ideas; it applied them in the practice of its day-to day business. Welch was assisted by a group of his advisers, who included academics, consultants and GE's own employees. The group came to be known as idea practitioners.

They were a link between ideas and action. Without them, ideas would have just stayed that way and would never have been put into practice. These idea practitioners possess key skills of "translation, harmonization and timing". They can tell whether an idea needs modification to work inside the firm. They also have the capacity to harmonize key themes which exist externally as well as internally, as well as knowing the right timing to adopt an idea in an organization.

Furthermore, Davenport and Prusak have also identified the personalities of idea practitioners. Idea practitioners are able to filter and then synthesize from multiple ideas, modifying them to suit their organization's needs. They are thoughtful and reflective managers capable of distinguishing good ideas from bad. But, even though they are passionate about their ideas, they are neither fervent or militant proponents, nor unquestioning backers of ill-conceived ideas of others. Most seem quite mild- mannered at first meeting.

On the characteristics of good ideas themselves, the writers explain that almost all share one or more of three business objectives: improved efficiency (doing things right), greater effectiveness (doing the right thing), and innovation in products or processes (doing something new). These three underlie a great many of the business-oriented goals of most management notions.

So, how good are business gurus as sources of sound business ideas? These people -- apart from CEOs or Company Chairmen -- are those the media has put in the spotlight and publicized; they are not idea practitioners. The latter mainly work quietly behind the scenes. Davenport and Prusak argue that these gurus do not really create business ideas. They tend to just assemble, package, and broadcast business ideas; they will rarely create the whole thing from scratch.

One example is the idea of core competence popularized by Gary Hamel and C.K. Prahalad at the beginning of the 1990's. The idea itself was then not actually new. The concept of a "resource- based view of the firm" had been discussed for decades by academics, including by Edith Penrose in 1956.

The backgrounds of business gurus are also looked at in depth and completely explained. Hence the reader can learn about the line of thought underlying the "birth" of their ideas. Davenport and Prusak divide up the backgrounds of these business gurus into four groups: Business academics (for example, Michael Porter, C.K. Prahalad), consultants (Adrian Slywotzky), practising managers (Jack Welch, Andy Grove) and journalists (Tom Stewart, John Byrne).

Based on analyses of the Harvard Business Review and MIT Sloan Management Review in 1998-1999, Davenport and Prusak found that the majority of writers in these two business journals came from academic backgrounds, only then becoming consultants and managers, and finally journalists.

The writers also did not forget to put forward the interaction between ideas and the market. It must be remembered that ideas must also be "sold", not just stored in the minds of idea practitioners. The relationships between idea buyers (managers), idea sellers (the advice industry of consulting, investment banks, business schools, law firms, rating agencies and so on), idea market channels (publishing, conferences, and education), and idea brokers (research groups within investment banks, consulting and IT industry analyst firms) are set out in detail so we can follow this interplay between markets and ideas.

All the authors' arguments concerning the importance of idea practitioners are put forward descriptively and completely, reflecting a high degree of insightful analysis, but still staying reader-friendly all the way. Many examples are put forward. Apart from GE, as mentioned earlier, other examples given in the book include Taco Bell, BP, Dell, Xerox, Johnson & Johnson, and the World Bank.

As a rather interesting addition, the writers also provide an appendix with a list of business and management ideas, a list of the idea practitioners they have been able to identify, together with the rankings of the top 200 business gurus, with Michael Porter occupying top place.

Overall, Davenport and Prusak have succeeded in presenting both a complete and systematic framework and guide for business ideas. This book is also not just head-in-the-clouds concepts, because it is based on the writers' experience as consultants to various businesses over many years.

Inevitably, this will be one of those works which will be a future classic among business and management books.