The Reciprocity Advantage: A book review by Bob Morris

Posted on: October 29th, 2014 by bobmorris

Reciprocity AdvantageThe Reciprocity Advantage: A New Way to Partner for Innovation and Growth
Bob Johansen and Karl Ronn
Berrett-Koehler Publishers (2014)

How and why the reciprocity advantage will become increasingly profitable in ways and to an extent only now imaginable

As Bob Johansen and Karl Ronn explain, the reciprocity advantage is a more sharply focused variation of a competitive advantage. They see it as a new and much better way to grow a business. This book shares “what we believe will become the biggest innovation opportunity in history. Society is just entering a unique period when doing good and doing well have to be combined in ways that have never before been imagined.”

The material provided in Chapter 11, “How to Learn by Experimenting with Many Open Iterations,” is of special interest to me. Design thinking has been a major component of human initiatives for at least 3,000 years but until recently, it has not received the attention it deserves, except in undergraduate and graduate schools of design.

For those who know little (if anything) about design thinking, here are what Johansen and Ronn suggest are the eight essential steps:

1. Frame the challenge: What is the killer issue to be resolved?
2. Brainstorm the issue: Create at least 100 ideas that address the given issue.
3. Assimilate: Through a process of rigorous evaluation and elimination, select 2-3 ideas to prototype.
4. Prototype solutions: Create crude models.
5. Share the models with potential users: Get specific feedback for each model.
6. Refine prototypes based on feedback and your group’s discussion: Make each better.
7. Share the refined prototypes again: Stay crude.
8. Share the prototypes with senior management: Obtain permission and commitment ($) to proceed.

Note: You can download a free tool kit for design thinking devised by the David and Tom Kelley and their associates at IDEO by visiting the website identified in Note 44.

It is no coincidence that a few other companies such as The Container Store and Costco annually ranked among the most highly admired and best to work for are also annually ranked among those that are most profitable and have the greatest cap value in their industry. It should also be noted that their active, substantial, and authentic citizenship helps to explain why their employment engagement is highest, attrition of valued employees is lowest. They have established a multi-dimensional reciprocity advantage.

These are among the dozens of passages of greatest interest and value to me, listed also to suggest the scope of Johansen and Ronn’s coverage:

o TED’s Reciprocity Advantage in Summary (Pages 6-8)
o IBM’s Right-of-Way Reimagined (18-20 and 23-25)
o IBM’s Reciprocity Advantage in Summary (30-32)
o GFSI’s Reciprocity Advantage in Summary (34-35)
o Google Fiber’s Reciprocity Advantage in Summary (41-43)
o Experimenting to Learn Will Get Smarter and Faster (43-45)
o Gaming: A Breakthrough to Experimenting to Learn (47-49)
o Apple’s Reciprocity Advantage in Summary (53-55)
o New Tools and Practices for Scaling (57-60)
o A VUCA World on Steroids (64-68)
o Demography Is a Trend, but the Digital Natives Will Be a Disruption (68-70)
o Diverse Partnership Possibilities (80-82)
o Military Gaming, and, Gaming Your Way to a New Business (92-94 and 96)
o Cloud-Served Supercomputing (98-100)
o Neuroscience in the Cloud (101-103)
o How Do You Find our Right-of-Way? (112-120)
o Learn by Prototyping (134-137)
o Find the Killer Issues (140-142)
o Thousands of Prototypes (142-145)
o Is It Viable? and, Is It Ownable? (153-158)

Readers will appreciate the fact that Bob Johansen and Karl Ronn are diehard pragmatists who are driven by a determination to understand how to combine innovation and growth in partnership to help leaders in almost any organization to achieve and then sustain success, whatever that organization’s size, nature, or marketplace may be. They provide a wealth of information, insights, and counsel that explains what works, what doesn’t, and why.

Those who read this book will learn how to determine what would be an appropriate right-of-way for their organization or how to improve the one they have, then recruit partners to do what can’t be done — or done as well — alone. “Experiment to learn. Amplify to create scale. Create your own reciprocity advantage. This model will work at the corporate level, but you can also use it on yourself to create your own reciprocity advantage.” Same components: partnerships, experimentation, and amplification. In this context, I am again reminded of Hillel the Elder’s inquiry: “If not now, when? If not you, who?”

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