I have just read and will soon review Michael Schrage‘s latest book, The Innovator’s Hypothesis: How Cheap Experiments Are Worth More than Good Ideas, published by The MIT Press (September 2014). Schrage develops in much greater depth in this, his latest book, several concepts introduced in Serious Play (1999), the first book of his that I have read and reviewed.

On of his most valuable concepts is the 5×5 X(experimental)-team approach is a rapid innovation methodology emphasizing lightweight, high-impact experimentation, as follows: “Give a diverse team of 5 people no more than 5 days to come up with a portfolio of 5 business experiments that cost no more than $5,000 (each) and take no longer than 5 weeks to run.” Schrage adds, “that the 5×5 seeks an 80/20/20 vision. That is, what hypothesis could we test — what experiments could we run — that generate 80 percent of the useful information that we need to make a decision in 20 percent of the time, and with but 20 percent of the resources that we ordinarily use to do so?” Schrage thoroughly explains the theory and practice of this method in the book. Yogi Berra once observed, “In theory there is no difference between theory and practice. In practice there is.” Presumably Schrage agrees.

As Walter Isaacson documents so thoroughly in The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution, with rare exception, great innovation breakthroughs are achieved by a process of collaboration. Innovators today use a crucible of simulation, prototyping, and modification as a crucible to convert raw ideas into products and services of incalculable value. Hence the importance of 5×5 X-teams. According to Schrage, they display these attributes:

1. High-energy focus on potential business impact
2. Clear alignment with known top management priorities
3. Simple, compelling, and accessible presentations
4. Pleasant surprises
5. Scalable next steps

“X-teams typically have five people that represent a cross-functional slice of the organization. They’re there because management believes that they’re innovative, talented, energetic, and destined for greater things inside the firm. They want X-teams to succeed; they want to be impressed. They seek confirmation of their own acuity. They believe that the 5×5 initiatives is a terrific innovation investment and that they’ve selected their best people to make it work.” Michael Schrage explains all this on Pages 157-160.