The Five Disciplines of Innovation: The Exponential Economy and the Need for a Third Generation of Innovation Best Practices


Date Thursday September 7th 2006
Time 4:00-5:00pm
Venue George E. Pake Auditorium

PARC Forum

Innovation is now the primary driver of growth, prosperity, and quality of life. Fortunately it is a world of abundance and not scarcity – there have never been more opportunities for innovation. Unlike the industrial age there are no limits to growth in the knowledge age. But it is also an increasingly competitive world with 100% price-performance improvements required every 9 to 36 months in many markets – the “exponential economy.” And yet, remarkably few individuals, teams, and enterprises have the needed disciplined innovation skills to systematically identify and develop these opportunities to stay ahead of the competition.

Fortunately we have proven models for how to improve. In the early 1900s, Henry Ford’s innovation, the assembly line, enabled the manufacture of low cost automobiles. Beginning in the 1950s, W. Edwards Deming’s innovation, Total Quality Management (TQM), enabled the production of both low-cost and high-quality products. Low cost – the first generation of innovation best practices – and high quality – the second – are now expected attributes of most manufactured products.

The focus of today enterprises is to rapidly provide superior customer value – that is, products and services with customer benefits that go well beyond the basics of cost and quality. But our current performance is unimpressive. Only one out of every 3 to 5 new start-up companies experiences significant success. And only one out of every 5 to 20 consumer products lasts for more than a year. These meager success rates are like the poor product quality that was accepted before Deming. Clearly, even a small improvement in our ability to innovate would have a profound impact on both companies and nations. But large improvements seem possible.

In a new book, Innovation: The Five Disciplines for Creating What Customers Want, Curtis Carlson and William Wilmot describe why we need to embrace a “third generation of innovation.” With a focus on knowledge workers, these third generation innovation processes build on and go beyond the ideas of Ford and Deming. The goal is to more rapidly and successfully create new customer value by using a family of innovation best practices – the five disciplines of Innovation. These five disciplines can be learned and applied first to your teams and then throughout your enterprise. Ultimately, if broadly applied across enterprises and governments they could have a great impact on the prosperity of nations.


Dr. Curtis R. Carlson is President and CEO of SRI International, a company dedicated exclusively to the business of innovation. It is hard to go through a day without experiencing an innovation from SRI. SRI's innovations include the computer mouse, robotic virtual surgery, those square numbers at the bottom of your checks, .com, .org, and .gov, cancer drugs, and thousands of other innovations from clean energy to seminal contributions to national security.

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