BOOK REVIEWS

covers reviews of current

books on management

10 Rules for Strategic Innovators:

From Ideas to Execution
Vijay Govindarajan and Chris Trimble
Boston, Mass.: Harvard University Press, 2005, pp 224, $29.95

T
here have been numerous books on how to foster innovation but few on how
to carry those innovations to the logical end by converting them into business
propositions. Most top-level managers have no doubt had the frustrating
experience of not being able to implement their breakthrough strategic ideas into
execution. The problem is greater when the new idea involves devising a new
business model and hence implies the setting up of a new organizational unit with
a different business modelBarnes and Noble with its online business, R R Donnelley
with its digital division, Hindustan Lever with its IT Division or Gujarat Cooperative
Milk Marketing Federation (GCMMF) with its pizza business.1 The new unit has
a clear business model which ought to work, but does not, despite the organization
staffing it with its best and brightest executives and setting up tried and tested
systems similar to what had worked in the parent company.

Well, not despite, but because of the above actions, argue Govindarajan and
Trimble in their new book. The central argument of the book is that when a new
strategic unit is set up to exploit a new idea with a new business model, it would
be a big mistake to borrow the old business model or transfer its old staff. When
a company, Core-Co, spins off a new unit, New-Co, its natural tendency is to transfer
as much of its personnel, systems, and know-how from the parent company as
possible. But, the New-Co typically requires new models, new systems, and often
a new culture to work and this is not going to happen if the Core-Co tries to replicate
its old models and transfer the Core-Co personnel to the new venture.

Anyone familiar with public sector enterprises in India can see the point straight-
away. When PSUs were formed, the systems of checks prevalent in the government
were transferred, often along with its bureaucracy, to run the PSUs and the result
THEMES
is there for all to see. This happens equally in the private sector as well, and not
BOP just in India, as shown by a number of case studies in this book. All the cases, in
Development fact, have American content but there is nothing culture-or context-specific about
Innovators these studies.
Sustainability
The core of the problem lies in what Govindarajan and Trimble call forgetting
Technology
Management Practices 1
GCMMF, however, did not set up a new organizational unit for its pizza business.

VIKALPA VOLUME 31 NO 1 JANUARY - MARCH 2006 157

157
challenges. Much has been written on organizational
learning but an important contribution of this book is
to bring to the centre-stage the technology of forgetting.
Those familiar with the literature on exploration vs.
exploitation of technology (March, 1991) will readily
recognize the problem in such radical innovations as
their being treated as problems of exploitation whereas
they ought to be treated as problems of exploration. The
problem is amplified by the new ventures being treated
as nothing more than related diversification. Old models,
assumptions, and actions are applied in a new setting
and they become orthodoxy. Their appropriateness is
seldom questioned.
What should the New-Co forget? Three things, argue
the authors: the Core-Cos business definition, its old
competencies, and its exploitation of a proven business
model. It should also learn to unlearn and apply new
technologies of foolishness (March, 1976) to see what
works in the new setting. This is virtually impossible
if the New-Co is staffed by Core-Cos executives or is
linked to the Core-Co at a low level in the organization
so that it is effectively controlled by the Core-Co. The
functioning of an organization is encoded in what the
authors call its organizational DNA its staff, struc-
ture, systems, and culture. These are deeply embedded
into its systems; and, it is virtually impossible to split
open the DNA and address the problems in parts. So
when the DNA finds its way into the New-Co, it rep-
licates itself.
The authors show how each of the above elements
of the organizational DNA are very likely to be inap-
propriate in most New-Co settings. For the new business
model to succeed, there is much need to experiment; the
staff in the New-Co need to be creative and inspirational
rather than transactional; the structures need to be flat
and informal (organic) and not hierarchical; systems
must focus not so much on immediate tangible results
as on learning; and the organizational culture needs to
be risk tolerant. Thus, a typical quarterly result-driven
system will take the focus away from the true determi-
nants of success: the ability to innovate and learn. This
implies, usually, a new set of people with different
attitudes and competencies which, in turn, implies,
usually, a fresh set of people. This, however, does not
mean that there should be no linkage between the Core-
Co and the New-Co or that the latter should not leverage
on the Core-Co in any way. What can and should be
158
158
borrowed from the Core-Co are its assets its produc-
tion facilities, distribution systems, brand names, etc.,
provided that this does not imply dependence on the
Core-Co. This usually means a structural separation of
the New-Co from the Core-Co and reporting of the New-
Co managers to the Core-Co at the highest level. It has
to be ensured that the Core-Cos systems and cultural
attitudes do not exert an undue influence over the New-
Co.
To develop these ideas, the authors take the reader
through ten chapters in which the reader is presented
with detailed case studies of five companies: Cornings
venture into DNA microways, the New York Times foray
into its digital edition (forming a new unit called New
York Times Digital), Hasbros getting into the toys
business, CapstonWhites moving into service business
(the company was in the business of manufacture and
supply of computer printers and related technology),
and the entry into micro electro-mechanical systems
(MEMS) by Analog Devices Inc. In each case, the prob-
lem was similar: a new business to manage for which
a unit was spun off with little, if any, realization of just
how different the model in the new business needed to
be. Chapters 2 and 3 deal in detail with Cornings
problems and constitute the most detailed case study:
Chapter 2 dealing with the false steps taken by the
company and the resulting problems and Chapter 3 on
how it solved the problems. Chapter 4 shows how ten-
sions arise when New-Cos borrow from Core-Cos using
the case of New York Times Digital. Chapter 5 shows
how to convert these tensions into a productive form.
Chapter 6 is an important and interesting chapter with
the title Why Learning from Experience is an Unnatural
Act that explains the thrust of its contents; so does
chapter 7 titled, How Being Bold, Competitive or De-
manding can Inhibit Learning, and chapter 8 titled,
How Being Reasonable or Diligent can Inhibit Learn-
ing. Chapters 7 and 8 argue their themes through case
studies of Hasbro Interactive and Capstone-White re-
spectively, and have important ideas on the central theme
of the book.
Chapter 9 is a difficult chapter to read but is the
richest of all. It emphasizes the need for developing a
theory for the business: how it works and its cause-
and-effect linkages. It also gives a number of very specific
recommendations. This chapter should serve as a prac-
tical supply step guide for practising executives; and,
BOOK REVIEWS
if the earlier chapters have been gone through fairly
intensely, this chapter could serve as a ready how-to-
do guide later. The last chapter states and explains the
ten rules for strategic innovation. It serves as a sort of
recap of the other chapters and converts the discussions
into a set of easy to understand rules to increase the
chances of a new venture to succeed using the case study
of Analog Devices as a background. I am tempted to list
the ten rules here but I would rather that the reader reads
them himself/herself.
The book is undoubtedly a major contribution to
strategic management and innovation literature. With
some adaptations, the principles can be applied to situ-
ations such as diversifications and starting new ventures
in a family group of businesses. Inevitably, one com-
pares these ideas with those in Clayton Christensens
Innovators Dilemma (Christensen, 1997) and wonders
whether the companies studied by Christensen could
have avoided the problems faced by them by adopting
the approach given in this book by Govindarajan and
Trimble.
There is little doubt that the uncertainties of suc-
cessfully exploiting new business ideas have a lot to do
with the attempt to graft the New-Cos into strong and
vigorous Core-Cos. But, the book seems to skirt two
issues: first, it does not explore the fundamental nature
of such uncertainties: that they are essentially very
complex problems that are sought to be reduced to
simpler formulations but still understandable in a ra-
tional framework. The building of theory for the new
business may all too easily slip into a simple modifica-
tion of the old theory. The problem will then be sought
to be glossed over as one of poor implementation while
the basic approach itself needs to be different (March,
2006). While the authors recommendations of active
experimentation in the New-Cos are undoubtedly use-
ful, the technologies of effectively putting them into
practice are not clear. Probably, that is what the authors
next book will be on.
The second issue skirted in this book is the existing
culture of the parent company itself. It is possible that
the Core-Cos differ in their rigidity and hence their
ability to tolerate a different culture even in their existing
organization. Infosys, in India, is an excellent example:
VIKALPA VOLUME 31 NO 1 JANUARY - MARCH 2006
159
it has a number of essentially small businesses with a
great deal of autonomy and freedom to explore; Bransons
Virgin Group is another, where the vastly different
businesses are run in their own way by managers and
the culture of these units could be quite different. At best,
the exercise of leveraging on assets such as brands and
other assets but keeping away from cultural issues is
likely to be a slippery one.
There is little doubt that this book is likely to be
a major and path-breaking work in the areas of strategic
management of change, managing cultures, and devel-
oping theories of business. The vulnerabilities of suc-
cessful companies to their own success formulae, a
narcissistic or over-confident approach that they-know-
it-all, and the unwillingness to recognize the need for
an alternative business model existing side-by-side with
its old model is well brought out. Teachers will undoubt-
edly like to get hold of the full case studies to present
the cases in the class as a learning mechanism, and as
a cap for the discussion, the authors article on the same
theme in a recent issue of California Management Review
(Govindarajan and Trimble, 2005) may be given at the
end. The book is written in a very reader-friendly style,
including the one as difficult as Chapter 9, and can be
carried in the pocket for ready reference when the situ-
ation calls for it.
REFERENCES
Christensen, C M (1997). The Innovators Dilemma, Boston,
Massachusetts: Harvard Business School Press.
Govindarajan, V and Trimble, C (2005). Organizational
DNA for Strategic Innovation, California Management
Review, 47(3), 47-76.
March, J G (1976). The Technology of Foolishness, in
March, J G and Olsen, J P (eds.), Ambiguity and Choices
in Organizations, Bergen: Universitetsforlaget.
March, J G (1991). Exploration and Exploitation in Or-
ganizational Learning, Organization Science, 2(1), 71-
78.
March, J G (2006). Rationality, Foolishness, and Adaptive
Intelligence, Strategic Management Journal, 27(3), 201-
214.
S Manikutty
Professor, Business Policy Area
Indian Institute of Management, Ahmedabad
e-mail: manikuti@iimahd.ernet.in
159
Capitalism at the Crossroads: The Unlimited Business
Opportunities in Solving the Worlds Most Difficult Problems
Stuart L Hart
New Delhi: Pearson Power in association with Wharton School Publishing, 2005, pp 241, Rs. 499.
C
an multinational corporations actually help to
make the world more sustainable? Or, is this a
project that is better left to the regulatory arm
of the government? Stuart Hart, an internationally ac-
claimed expert on strategy and sustainability at the
Johnson Graduate School of Management, Cornell
University, argues that if the profit motive is harnessed
in a responsible direction, even multinational corpora-
tions can, contrary to popular belief, actually help to
accelerate (not inhibit) the transformation toward glo-
bal sustainability with non-profits, governments, and
multilateral agencies all playing crucial roles as collab-
orators. This book then is aimed at all those who believe
that public-private partnerships can play a crucial role
in promoting sustainability and that even the private
sector can take the initiative on sustainability. As Dr.
H Fisk Johnson, Chairman and CEO of S C Johnson &
Son, Inc., points out in the Foreword to this book, many
companies including Johnsons have taken the lead in
designing business models that can drive sustainability.
He describes the case of his father, Samuel C Johnson,
who had taken the initiative to voluntarily and unilat-
erally ban CFCs from our products despite fervent
opposition from colleagues and competitors alike.
Samuel Johnsons pioneering work led to a place on the
Presidents Council on Sustainable Development and to
the founding of the World Council on Sustainable
Development.
What then are the business models that are required
for addressing the problem of sustainability? What are
the presuppositions of value creation built into such
models? These are the crucial questions that must be
addressed in order to operationalize the new paradigm
that Hart spells out in this volume. But, as Fisk Johnson
points out, the essential requirements for such a project
are the following: the willingness to engage with a
plurality of stakeholders rather than sticking to the
traditional binary opposition of public sector versus
private sector, moving away from an incrementalist
model of growth in favour of creative destruction,
innovation, and reinvention, and, most importantly,
160
160
holding on to the fragile spirit of optimism amidst
widespread apathy and cynicism. This, of course, is
easier said than done by Johnsons own admission given
the widespread belief that global business and sustain-
able development have no real link to each other. Hart,
who holds the S C Johnson Chair of Sustainable Global
Enterprise at Cornell, also began with the leftist idea that
businesses everywhere seek profit to the exclusion of the
Good.
This book charts the trajectory of his career where,
as a teacher of both strategy and sustainability, he has
tried to marshal the arguments necessary to rethink the
traditional pessimism that surrounds this topic. Harts
intention is to demonstrate (in the words of Fisk Johnson)
that there is no inherent conflict between making the
world a better place and achieving economic prosperity
for all. Maintaining a principled commitment to global
sustainability is not a soft approach to businessit is,
in fact, the only pragmatic approach for long-term
growth. Moreover, understanding that the need for this
principled commitment to sustainability on the part of
all the stakeholders is not a misplaced sense of idealism,
but, in fact, an unprecedented historical opportunity to
make a difference to the living conditions of billions of
people is the primary challenge thrown up by global
capitalism today. Business leaders and other stakeholders
who are able to drop their customary cynicism and
embrace the demands made to rethink their business
models will find that there is, in fact, no real conflict
between the generation of unlimited business oppor-
tunities and the technical challenges of solving the
worlds most difficult problems.
Harts strength as a management thinker and writer
emerges from the fact that he does not place himself
outside the ambit of the stakeholders who have to
overcome the inbuilt pessimism of the traditional op-
position between the demands of growth and the prob-
lem of the Good. Instead, he situates his lifes work on
the relationship between strategy and sustainability as
a response to an encounter with C K Prahalads unique
perspective of strategy as innovation rather than the
BOOK REVIEWS
traditional textbook description of strategy as compe-
tition. In other words, this book is a testament to a change
in his mindset. It is built on the belief that such attitudinal
re-wiring is not without implications for a theory of
strategy since even the sustainability of theories of
strategy is problematic on the desiccated platform of
competition. How then can it provide scaffolding for
sustainable enterprises? But, given that these bad habits
are drummed uncritically into the minds of the young
in business schools, Harts intellectual odyssey is a
valuable platform for those who wish to rethink the role
of strategy not only in relation to sustainability but in
the more dynamic contexts of creative destruction, dis-
ruptive technology, and innovation.
What is it that Hart expects of capitalism at the
crossroads? What else but the cultivation of innovation
rather than the gospel of competition as the anchor of
the sustainable enterprise? But, why, if at all, has it taken
the corporation so long to work out that innovation is
better than competition? How exactly should the corpo-
ration pursue the path of sustainability? These then are
the questions that help to structure the rest of the volume.
The answer to the first question provides the historical
context of capitalism in which competition emerges as
the matrix of business activity forcing companies onto
the simplistic path of efficiency which itself is conceived
as a set of operational problems. The answer to the
second question lays out the modalities of innovation
that will help companies to make the transition to the
paradigm of sustainability provided they drop the bad
habits of the past. This means that they will have to
rethink the very idea of a business, redefine who they
will identify as a customer, re-evaluate the notion of a
value proposition, and, most importantly, be willing to
engage with the base of the pyramid (BOP). Hart, in-
cidentally, is one of the co-innovators of the base or
the bottom of the (economic) pyramid paradigm in
strategic theory along with C K Prahalad.
Given the constraints of doing business with the
very poor, it will not suffice to merely dilute old business
models or palm-off dated models onto unsuspecting
customers at the base of the economic pyramid. Com-
panies will instead have to rethink everything; other-
wise they will abdicate on the new responsibilities and
opportunities that the so-called decline of big govern-
ment has made necessary in the West. Companies cannot
just continue to work with the complacent assumptions
in Milton Friedmans theory of the firm, where it is
VIKALPA VOLUME 31 NO 1 JANUARY - MARCH 2006
161
sufficient for a firm to focus only on the interests of its
shareholders, i.e., make as big a profit as possible with-
out violating the relevant laws in place. In other words,
in Friedmans model, the regulatory structure in place
is the only real constraint. Otherwise, it is business as
usual. In this elementary model, the aim is only to please
the shareholder; hence, the unilateral focus on compe-
tition in strategic theory. But, in Harts model, the firm
is focused not so much on the competition but on the
hitherto unharnessed sectors of the economy; hence, the
focus is on innovation. Given the unprecedented levels
of choice available to the consumer at the top of the
pyramid, it does not make much sense for new players
or even existing players to spend fortunes in penetrating
mature markets when there are unprecedented oppor-
tunities at the base of the pyramid. These opportunities,
however, cannot be accessed using the old assumptions
of either manufacturing or marketing.
The significance of the sustainability platform for
a theory of strategy, and, by implication, for a theory
of capitalism should then be obvious: if the base of the
pyramid begins to consume in a manner that character-
izes the top of the pyramid, an environmental crisis
would become inevitable. With the increasing demands
of the base, the top would have no choice anyway but
to rethink its modalities of production and consumption.
Otherwise, as the rise of anti-globalization protests
demonstrates, the very viability of capitalism will begin
to be called into question. It will also fuel terrorist
movements which will try to capitalize on the
disaffections of the unemployed young throughout the
world. Sustainability then is the key link between the
top and the base of the economic pyramid.
Sustainable consumption will not only bring dig-
nity to the worlds poorest people by giving them an
opportunity to function as economic agents (rather than
live as servile objects of exchange), it is the golden key
to understanding the contemporary crisis of capitalism
since it provides the socio-economic matrix of innova-
tion in the global economy. It is also, not surprisingly,
the conceptual link between the three parts of this volume
which seeks to map the terrain of capitalism, argue for
the necessity of going beyond greening as a form of
environmental recuperation, and promote the ethical
necessity of becoming indigenous, i.e., rethink the
economic definition of growth as a holistic process rather
than focus on money income as the primary or sole
parameter for defining development.
161
 The first part of the book sets out a brief history of
the role of environmental regulation in both the Ameri-
can and international markets. It examines the changing
set of assumptions that have mediated the regulatory
framework given the unwillingness of most businesses
to proactively address the so-called inevitability of
externalities in the production process (like pollution).
A command-and-control structure of regulation was,
therefore, put in place in the 1970s in the United States
and elsewhere. This regulatory structure, however, gave
way to the greening revolution in the 1980s since a
collaborative approach (influenced by the quality move-
ment) was seen as much more likely to yield positive
results than a law-and-order approach. The focus turned
to the prevention of pollution rather than on the actual
modalities involved in cleaning up the environment.
Prevention was thought to be better than finding a cure.
In the early 1990s, however, the confluence of market-
based solutions like tradable emission permits and the
extension of the quality movement to social and envi-
ronmental issues resulted in ISO 14001. The movement,
then, from regulation to self-regulation, revolved around
the realization that pollution and litigation were the
ultimate forms of muda, i.e., waste. The Toxic Release
Inventory (TRI) of 1988 and the introduction of ex-
tended producer responsibility laws in Europe made it
necessary for manufacturers to take responsibility for
the entire product life cycle; this was known as product
stewardship. Companies realized that it would make
more sense to be proactive in the greening process. They
decided to lower costs by internalizing externalities
through pollution prevention, and aim wherever pos-
sible for superior performance. Volvo, for example,
developed a radiator that, in addition to cooling the
engine, could clean the surrounding air as well.
These strategies (preventing pollution and product
stewardship), however, were incremental in their ap-
proach and focused on building efficiencies rather than
effectiveness. Sustainability, however, must lead to some-
thing more fundamental, i.e., natural capitalism. It
must not only develop technologies that are cleaner and
better but also expand the reach of capitalism to the base
of the pyramid. In other words, business must set itself
the goal of being culturally appropriate, environmen-
tally sustainable, and economically profitable. The strat-
egy that would make it possible to address these param-
eters must factor in innovation as a form of disruption.
But, this is easier said than done. Companies which are
162
162
serious about this goal must move beyond transparency
to radical transactiveness. This means that companies
must develop fully contextualized solutions to real
problems in ways that respect local culture and diver-
sity.
The three strategies that have been invoked to
address the problem of sustainability include control-
ling population growth, lowering the rate of consump-
tion, and changing the forms of technology in place to
increase production. Hart argues that the first two are
not feasible since desperate attempts to reduce popu-
lation or decrease consumption may come at the cost of
civil liberties or political unrest. The real hope, however,
is that technology-led innovations in the form of biotech-
nology, nanotechnology, biomimicry, wireless IT, and
distributed energy systems will make the necessary
difference and make possible the modes of production
that will help to meet the needs of the billions of rural
poor (who have thus far been largely ignored by global
business) in a way that dramatically reduces environ-
mental impact. In order to do this, Hart argues that
businesses will have to be able to differentiate between
three forms of economy: the money economy, the tra-
ditional economy, and natures economy.2 The first two,
broadly speaking, correspond to the urban and rural
economies. The last represents natures bounty. While
structurally interdependent, argues Hart, these econo-
mies have also come into collision in the global economy.
The emerging opportunities in global capitalism lie both
within and in the intersection of these economies con-
ceived as a Venn diagram.
If companies want to seize these opportunities, they
will have to move from the demands of the money
economy to that of the traditional economy but this
means that they need a sustainable strategy to reduce
their ecological footprint; they must reinvent products
and processes. They must re-think the very idea of a
value proposition keeping in mind the global dynamics
of the three economies, since strategy, technology, and
markets are not anymore what managers expect them
to be. What then is the way forward? Hart argues that
companies especially incumbents in pollution and asset
intensive industries, must turn to Joseph Schumpeters
notion of creative destruction as the way forward. But,
needless to say, this is easier said than done. What then
is creative destruction? How does it emerge to restruc-
2
Hart borrows this typology from the work of Vandana Shiva, Ecology and
the Politics of Survival, New Delhi: United Nations University Press, 1991.
BOOK REVIEWS
ture an industry? What are the resonant examples for
Hart?
Creative destruction is the set of innovative pro-
cesses through which capitalism reinvents itself. It mani-
fests itself through the emergence of a disruptive tech-
nology. In Clay Christensens definition, a disruptive
technology revolves around an innovative application
of a product or service rather than in the emergence of
a big, new technology per se. That is why smaller com-
panies are more likely to pursue them than the bigger
companies since disruptive innovations typically ena-
ble a larger population of less-skilled or less-wealthy
people to begin doing for themselves things that histori-
cally could be done only through skilled intermediaries
or by the wealthy. The dissemination of desk-top com-
puting, small cars, and on-line investing are a few
examples. These innovations have not only made life
easier but have generated hundreds of billions of dollars
in revenues and market capitalization and created tens
of millions of jobs in the process. The success of Japanese
companies like Honda, Sony, and Toyota itself was based
on their ability to take on market leaders through dis-
ruptive technology. Japan went as far as using disrup-
tion as a national strategy for economic development.
The economic slowdown in Japan can itself be under-
stood as an inability to sustain this strategy. There are
a number of other case studies including Grameen
Telecom, Light up the World (LUTW), etc. in this book
but the strategic lesson is clear. Hart is not advocating
the introduction of disruptive technology into a conven-
tional business model, which by bringing it into head-
on competition with incumbents can endanger it. In-
stead, companies should aim to incubate disruptive
innovations at the base of the pyramid since existing
mainstream markets are the wrong place to look for
major new waves of growth.
What prevents access to the base of the pyramid
markets is not the unwillingness of BOP customers to
buy innovative products and services but the pre-exist-
ing categories of thought that make it difficult for com-
panies to envisage the needs and demands of customers.
The very fact that Hart, Prahalad, and others even have
to write a theoretical justification to engage with the BOP
represents a failure of corporate imagination. Many
companies do not realize that it is actually risky to play
safe if all that they can come up with are variations of
the same set of products in the mature markets. Com-
panies must instead move in the direction of engaging
VIKALPA VOLUME 31 NO 1 JANUARY - MARCH 2006
163
fringe stakeholders. Stuart Hart and Sanjay Sharma,
therefore, propose the notion of radical transactiveness.
Hart and Sharma use this phrase to call attention to the
processes required to build the competitive imagination
necessary for future business and the pursuit of a truly
sustainable form of global development.
The two aspects of radical transactiveness include
expanding the scope of the firm and the ability to in-
corporate diverse and disconfirming knowledge. An
example of the former is an initiative by Grameen Bank
to include beggars as potential customers for micro-
loans converting them thereby to micro-entrepreneurs.
An example of the latter is an innovation by Arvind Mills
to make jeans affordable by distributing a ready-to-
make kit of components. These kits are converted to
affordable jeans by a network of 4,000 tailors located in
small rural towns and villages. The decentralization of
the distribution process is a response to the disconfirming
knowledge that the price of the jeans is actually too high
for most customers. This innovation made it possible to
increase the sales volume to a point that Ruf and Tuf
jeans has become a market leader.
Such attempts at innovation make it possible to
move beyond the world of legal contracts in the formal
economy to the building of social contracts in the infor-
mal economy. Since the bulk of the BOP is actually
implicated in the informal economy, product and market
innovations must factor this into account. The multina-
tional corporation, in other words, must move beyond
the transnational model which revolves around the
mantras of global efficiency, national responsiveness,
and worldwide learning and incorporate, in addition,
a native capability. Only then will they be able to
harness the potential of both the formal and informal
economies at play in the BOP. This means that the BOP
needs not only models of governance but also models
of business that can be built from the ground up, so
that the corporation is embedded as an organic part
of the economic landscape that it seeks to operate in. The
corporation will then stop being an outsider and become
indigenous to the community.
Only when the multinational corporation can take
up these challenges will it be possible to hear the true
voices of those who have previously been bypassed by
globalization. But for this to happen, companies must
stop thinking top-down, muster the courage to think
as a disrupter, reinvent cost structures, rethink their
scale of operations, and align the organization so that
163
the employees do not become discouraged or have to
take undue career risks to move the sustainability agenda
forward. For this to happen, employees must have what
Erik Simanis terms, the license to imagine, and not job everyday.
merely the ability to analysethe staple offering of
business schools. The real lack in even the better organi-
zations today is the failure of imagination and the ability
to sustain creative tension when this lack emerges.
Capitalism, concludes Hart, echoing the recent work of
John McMillan, must recapture the excitement of the
bazaar that it has lost in the deification of the market.
Only then can the multinational corporation make
meaning for their employees and allow them the chance
to align their personal values with what they do on the
Shiva Kumar Srinivasan
Assistant Professor
Communications Area
Indian Institute of Management, Ahmedabad
e-mail: shiv@iimahd.ernet.in

Innovation is the creation of the new or the re-arranging of the

old in a new way.

Michael Vance

164 BOOK REVIEWS

164