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Book Review
Knowledge Innovation: Strategic Management As Practice
Mitsuru Kodama
ISBN: 978-1-8454292-9-4 2007 244 pages Edward Elgar Publishing Limited
Jamie P Eggers
In the first chapter of Mitsuru Kodama's book, Knowledge Innovation, he cites a provocative quote from Philips CEO Gerard Kleisterlee:
We used to start by identifying our core competencies and then looking for market opportunities. Now we ask what is required to capture an opportunity and then either try to get those skills via alliances or develop them internally to fit.
The Economist, 9 February 2002
This quote sets the stage for the book's main point - the ‘new' alliance-based strategies being used by global high-tech firms to address new business opportunities has created challenges for managers looking to locate and integrate external knowledge with internal capabilities. Given the link between innovation and the acquisition of outside knowledge, this is an important question worthy of an entire book. Kodama's solution is a concept that he calls the ‘strategic community' (SC), a network of relationships involving actors both inside and outside the firm that promotes the open sharing of preferences, values, knowledge, and ideas to create innovative high-tech products across firm boundaries. Kodama provides some clear and explicit examples of SCs used in real companies, and discusses the theoretical differences between SCs and better-understood concepts, such as Communities of Practice and Project Teams.
From this opening chapter, most of the book outlines multiple highly-detailed case studies of large companies building networks of relationships between technology partners, agencies and schools, customer groups, and disparate functional areas of the company to solve complex strategic and technology problems. While these case studies provide a great deal of detail and clearly demonstrate the concept on which Kodama is focusing, there are some drawbacks with the studies. First, how the SCs Kodama is presenting really differ from well-implemented cross-functional project teams is not always clear, undermining Kodama's primary contribution. Second, almost all of the case studies deal with the creation and rollout of NTT's 'Phoenix' videoconferencing system, which calls into question the broader applicability of the SC concept and limits the reader's ability to visualize its application to their company. Third, the case studies provide too much detail on 'who,' 'what,' and 'when,' and not nearly enough detail on 'how.' In many cases, the discussion of the creation of a new SC is addressed with sentences such as, 'Then a strategic community (SC-b) between NTT and the MPT was formed.' Buying into Kodama's idea of the potential value of SCs is relatively easy, but discerning the author's perspective on how to create and maintain those networks is sometimes more difficult.
While most of the book deals with the concepts of SCs and cross-boundary innovation, there is a substantial portion of the book dedicated to other concepts, such as 'strategy as practice', 'strategic activity cycles', and concepts around values, trust and leadership. While some of these have intuitive links to the core concept of SCs, many of those links are not clearly drawn out in the book or that link is not made clear until the final chapter, making these sections feel disjointed from the core of the book. These are clearly important concepts, but without a strong link to SCs and innovation, they read more as needless diversions, rather than elaborations of the central point.
The one other difficult element of the book is that it reads like a compilation of disjointed elements rather than a coherent single work. The preface discloses that much of this book comes from pre-published works, explaining the disjointed nature of the narrative. Since most of the case studies come from one company (NTT) and one umbrella technology (Phoenix videoconferencing), there are many facts and events that are repeated from chapter to chapter. Each chapter also provides an independent assessment of these events, producing related but slightly different conclusions each time. The story would have been easier to follow and would have created a greater impact if the story were told once in detail and then the author drew clear conclusions and lessons from across the history of the project. It also might have made the logic linking the core idea of SCs to the other, peripheral points of the book more accessible.
Despite the academic-tinged discussion of 'strategy as practice' and numerous citations of relevant academic articles, this book seems very focused on a practitioner audience. The primary takeaways from the book relate to the value of these SC networks and the presentation of examples of how NTT utilized these networks to create successful new products. While, as noted earlier, the book is unfortunately thin on the means of creating and maintaining these virtual networks to promote innovation, it is successful in promoting the potential value of SCs and provoking some thought about how managers in innovative firms manage the individual-level relationships within the company and across its various stakeholders.
Overall, despite the concerns discussed above, Knowledge Innovation is very suggestive about how firms may be able to gain more from their alliances than they currently are receiving and is a worthwhile read for those practitioners with responsibility for those relationships, and for the academic audience focused specifically on the micro-level management of cross-company relationships.
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