Innovation Is A Skill That Can Be Mastered: Scott D. Anthony

By Joji Thomas Philip
Mint, New Delhi.


Two personal experiences, more than his Harvard Business School MBA, profoundly shaped Scott D. Anthony ‘s views on innovation.

At a TEDx talk in Singapore, Anthony, currently the managing partner of global strategy and innovation consulting firm Innosight, recalled the two incidents.

When in fourth grade, he was asked to do a book report on the British mariner and explorer, Sir Francis Drake. The night before it was due, Anthony had not even started it, but was reassured by the weather report that had predicted a snow storm the next day. He went to bed confident that he would get the day off and would be able to finish the assignment. On waking up, he found the snow was just two inches thick, leaving him with just hours to complete the report.

His teacher did not fail him, but gave him a “D”.

Later, his mother, on seeing the report, said something that remains with him to this day: “Scott, the biggest curse in the world is the curse of unfulfilled potential.”

“When I got into my professional life, I realized that this was the biggest problem today–the world of innovation is filled with unfulfilled potential,” Anthony said.

When studying for his BA in economics at Dartmouth College in the early 1990s, his true passion was the college newspaper that came out five days a week with up to 16 pages, and covered all the big news in Hanover, the town of 10,000 residents where it is located.

That was also the time that transformation first hit the media, and during his sophomore year, Netscape introduced the first commercial Internet browser.

“First we hesitated (to put the paper online) and told ourselves that it was not part of our priorities. This explains why we were one of the last newspapers in our peer group to go on the Internet. Why did we hesitate? Our newspaper raised a substantial amount from subscription–we had a nice little business model of $250,000 a year, two-third of which came from subscriptions. Our first feeling when we saw the Internet was abject terror. We knew that if we went online we would destroy our business model,” he explained.

On hindsight, Anthony recalled that as college students, they had nothing to lose by experimenting, and yet they had failed to seize the opportunity.

“Instead of doing things differently, we choose to put the print version online and see how we could force the people who read us to subscribe. We choose to do things incrementally and we choose not to transform. In my 20-plus years since then, I’ve realized that this one word–innovation–causes many firms and individuals to stumble,” he said.

Using data to drive home the point, Anthony said experts agreed that 75% of the companies on the Standard & Poor’s 500 won’t be present on the index in the next 15 years, and 80% of venture-backed companies do not celebrate their third birthday.

“A lot of organizations and individuals don’t realize the potential that is within them. Too many people believe that innovation is a gift from above and only a few have it. That is not right. Innovation is a discipline, it is a skill that can be mastered. Simple definition is that innovation is ‘something different that has an impact,”‘ he added.

Anthony said his career has been shaped by his experience of being the editor of the college newspaper.

“What I do now as consultant, advisor, and author–a lot of that is very similar to journalism. You’ve got a nugget of an idea, then you gather a bunch of data, turn it into a story and communicate it clearly. This is the essence of what a consultant does,” he said.

After university, he joined McKinsey and Co., and, after a two-year consulting stint, joined WorldSpace, then a start-up radio venture.

A year later, he was at Harvard Business School for his MBA and, during the second year, he met Clay Christensen, who is often referred to as the “father of disruptive innovation”.

“I just fell in love intellectually with the ideas that Clay was working on, because it brought so much clarity with my past experiences–my own time with the newspaper, the things that I got really excited about when I was consulting, and my struggles in a start-up company,” Anthony said.

After graduating from business school, he spent a couple of years doing research with Christensen, who had earlier co-founded a company called Innosight. In its early days, Innosight was a software company, then it became a newsletter company, later a conference company, before transforming into a consulting firm. Anthony joined Innosight in 2003, when it had just a handful of employees.

“McKinsey, the start-up experience from WorldSpace and then the quasi-academic foundation to working with Clay, all combined together to what I am doing now,” he added.

Anthony explained that over the last 12 years, Innosight had seen a big shift in its consulting business and had gone from focusing and working on specific ideas, to really helping leaders of organizations deal with industries, arenas or markets that are going through disruptive changes.

Innosight also began investing in start-ups, as it wanted to put into practice the things the consulting firm was telling large firms to do. Innosight wanted to demonstrate that its prescriptions worked.

“It is a little bit of learning, it is a little bit of demonstration to our clients that we really believe what we are doing, and it helps to make some money out of it as well,” he said.

About a decade ago, Innosight, based in the US, set up an office in Singapore. It began with the firm doing a consulting project with Singapore’s Economic Development Board (EDB).

“The chairman of EDB at that time said, ‘I’ve seen what has happened to Japan and I’ve seen what has happened to other countries that have had this hot growth trajectory, and I really believe that we need to inject entrepreneurship and innovation to our country.’ After that report, EDB said it would like to have us here and work with them. So, even though we were tiny and we were trying to figure our core model in the US, we had a second office over here, and we have maintained a lot of government relationships over the years,” Anthony explained.

He relocated to the Singapore office in 2010 and two years later was elevated as the managing partner for Innosight.

The other big shift was in 2009 when the company kicked off its venture capital arm–Innosight Ventures. The consulting firm tied up with the Singapore government for its maiden $10 million IDEAS Fund, which it has invested in nine local start-ups so far.

Anthony, who is also the managing director at Innosight Ventures, said the investment vehicle was close to announcing another deal related to a fintech firm, making it the 10th company in the VC firm’s portfolio.

Innosight Ventures has also begun work on raising a new $50 million fund to make series A investments in technology, media and telecommunications companies in the region. Unlike in its earlier fund, the Singapore government will not be a partner in its upcoming Innosight Ventures SE Asia Fund I.

Interestingly, Anthony is also one of Harvard Business Review’s most prolific contributors. He is the co-author of the recent Harvard Business Review article Build an Innovation Engine in 90 Days, as well as author of the book The First Mile: A Launch Manual for Getting Great Ideas Into the Market.

Published in 2011, his most sold book is, The Little Black Book of Innovation: How It Works, How to Do It; and Building a Growth Factory.

“Innovation is not magical, it is not mysterious–it is a discipline that anyone can get better at with careful practice. The Little Black Book talks about the essence of the discipline and then gives specific steps to practice it. That is a 15-second pitch,” he said, when asked to describe his bestseller.

Anthony, who has also worked as a consultant and advisor for companies in emerging markets, including India, is for the opinion that the country’s entrepreneurial energy exceeded that of all other places globally.

“It is hard to survive (in India) if you are not an entrepreneur. The infrastructure is so poor, the government, not necessarily out of malice, but in many cases, the government works against you and not for you. You only survive in India if you have a little bit of entrepreneurial energy and that has existed for a long time,” he said.

Edited excerpts from an interview:

Q: Most chief executives are under constant pressure to “maximize shareholders returns”. In such a scenario, where their focus is today, tomorrow and the next quarterly results, how difficult is it for large companies to plan for the future?

A: If you really have a widespread belief that the purpose of your organization is to maximize what you produce in the next day, week or quarter, it will be next to impossible to do anything of meaning in the innovation field. Jeff Bezos (founder and CEO of has a good quote on it–he said he was willing to be misunderstood for long periods of time–sometimes it takes to be misunderstood for long periods of time to give birth to Amazon Web services, or other forms of disruptive ideas. I think a lot of times, leaders use the “maximize shareholder value”, as a cop-out–if you manage to tell the right story to shareholders, manage information in the right way, and prove that you can deliver, and have a reasonable plan, then shareholders are often more patient than you realize.

Q: Is it possible for large Singapore-based companies to really innovate? Their strength has been execution and governance.

A: If you look at some of Singapore’s big companies over the last few years, you see some of them are doing really exciting things. Singtel (Singapore Telecommunications Ltd) is an example–they are the largest regional communications firm, and they have a stake in India’s Bharti Airtel Ltd. They are doing some pretty interesting things around mobile advertising, cyber security, video-over-the-top–they are doing a lot of interesting things in an industry that is undergoing a lot of disruptive changes. If you look at DBS Bank, Piyush Gupta (chief executive) is trying to reshape it to be a much more digitally oriented company. If we were to go back 10 years and say that SingPost would double its revenue from 2004 to 2014, people who have said, “what are you smoking or what drugs are you on?”, because in a business like that, how can you double your revenue? But they followed a very aggressive strategy to push into e-commerce, logistical support and so on, and have a strongly growing business that Alibaba has invested in.

There is still a lot of work to do in Singapore, but you have some examples of companies that are pushing the frontiers. In Singapore, getting talent when compared with India and China is not easy–the local market is not too big. If the question is, if it is possible in Singapore, then the answer is definitely yes. Is it a challenge for companies in Singapore to innovate–I think the answer is also decidedly yes.

Q: You talk about innovation being about unfulfilled potential–is it just that, or also the fact that not all are cut out to innovate? You are from Harvard Business School. Does one need an MBA to be innovative and succeed? How important is such an MBA, especially one from a premium business school.

A: Two things. The best research I’ve seen on this topic is the Innovator’s DNA by professors Jeff Dyer, Clayton Christensen and Hal Gregersen, where they have said that while it is hard to measure how much of an innovator is given from the person’s DNA, one can measure how much can be built.

The best that I’ve seen suggests that about two-thirds of your capabilities as an innovator are developed and learnt–that means you can never be truly world class unless you’ve got something in your genes. But it also means anyone with careful practice can become pretty good at innovation. There is something to having it in the genes, but anyone can get proficient at it. It is like riding a bike. Anybody can ride a bike, anybody can be proficient at it. But only a select few are Tour De France capable–that may require some performance-enhancing drugs, which I don’t endorse.

In all seriousness, I think that education (MBA) is valuable–learning is valuable–the experience, of course, is valuable. Yes, you can’t learn everything that is required to be an innovator in a classroom, but it is this mix of things that come together that allows innovators to exist. There are context, too. Steve Jobs was not Steve Jobs in 1920s, Warren Buffett was not Buffet in the 1840s–the context can make the person, as much as the person can make the context.

Q: When advising Asian companies, how are they different from the firms in the West?

A: Every company is different. You will see an American company that will fit the stereotype of an Asian company, and an Asian company that won’t. Generally, there is more of a hierarchical view in companies in Asia. Say, if the employees think that the idea they are working on is stupid, they don’t bring it up because it is the boss’s idea.

Yes, this exists in some Western companies too, but not nearly as much as you see in Asia. Sometimes, that is a good thing–respect for elders, respect for hierarchy, but it also can stand in the way of innovation, because often it is the people at the grassroots, the younger people, who actually know what needs to happen.

But they sometimes self-censor and don’t want to be the ones pointing out that the emperor is wearing no clothes.
If you give a talk in the US, people always ask questions, if you give a talk in Europe, they will tell you how wrong you are, but if you give a talk in Asia, you then wait for questions–usually, there are none.

Q: It is getting better now and more people are raising their hands to ask questions.

A: Singapore has been trying to project itself as one of the leading start-up capitals in Asia. But of late, there have been lot of concerns of the city-state out-pricing itself, as the cost of running business here is high when compared with neighbouring countries. There are also a lot of valid concerns on the talent crunch here. Will costs and talent crunch derail the start-up scene here?

The two are interrelated. The scarcer the talent, the more costly it gets. Talent is a big issue, and a long-term issue if Singapore really aspires to be another Silicon Valley. Okay, Silicon Valley is unique-but if Singapore wants to be at least a certain percent of Silicon Valley. One of the root problems — and I’ve talked about this publicly a few times — it is a little too easy to start a business here. It seems like a weird problem. Because anyone can start, and you can get a grant or some scheme or get some investment, you’ve got a talent pool that is fragmented in the early stages.

Because the cost for running businesses are so low today, some of the businesses go into zombie mode. They just stay alive even though the world really does not want the business. That is one systemwide problem. Here you don’t see the full impact of what would have been, had there been a little more ruthless culling of ideas, so that the talent cluster would be larger.

The Singapore education system is one of the world’s best. It produces people who are just off the charts in terms of test scores, but a lot of it is disciplined rote learning — that is great if you are going to slot someone into an executional role. But you need some poets if you are going to be launching start-up companies.

You need people who are creative thinkers, you need people who can deal with problems that they’ve not seen before — these are not historically hallmarks of the Singapore education system. The government understands this — it is trying to inject a little more creativity and problem-solving into even very early primary schools. This change does not take a year to play out. It takes decades to play out. You see a lot of universities have programmes now, where the likes of NUS send people to Silicon Valley. Over time, I expect to see really good or stronger pipeline of talent, but you can feel the limitations right now for sure. You need a little bit of mess to have innovation — that is something that Singapore does not tolerate. You need to have a little bit of the grittiness if remarkable stuff has to come out. But I’ve seen a lot of changes in the last five years.

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