The Innovation Stack: Building an Unbeatable Business One Crazy Idea at a Time
Jim McKelvey
Portfolio/Penguin (March 2020)
This methodology produced the greatest breakthroughs throughout history…and will continue to do so
The term “stack” may seem irrelevant in the context of innovation but the concept has been around at least since Achilles and his fellow Greeks struggled without success to solve a problem: gaining entry to Troy after a siege that had lasted a decade. That was several thousand years ago.
As Jim McKelvey, innovation stacking is a process that should be considered when reaching what he characterizes as “one of the major milestones: the moment when you say, ‘So that’s why no one’s done this before.’ This is an entrepreneurial moment when you first realize that you are attempting to do something new” and must “solve a problem that no one has solved before.”
McKelvey focuses on four companies that have used the innovation stacking process to “build an unbeatable business one crazy idea at a time,” including his own, Square. For example, here is the first of 16 “crazy” ideas in the Bank of Italy innovation stack:
1. Focus on “the little fellow.” A.P. [Giannnini, founder] said “It is our purpose to make a specialty of the interest of the small depositor and borrower. We consider the wage earner or small business man who deposits his savings regularly, no matter how small the amount may be, to be the most valuable client our bank can have.” But many “small business men” were not men, so they had to have…
2. Banking for Women > Low Rates > Direct Sakes Force > Advertising > Low Minimums etc. You get the idea.
One innovation required another in what became an on-going process. McKelvey discusses how sequential innovations helped A.P. Giannnini and his Bank of Italy to establish a significant competitive advantage. (It was later renamed Bank of America.) He also examines each of the other three and their own innovation stack . Details of the methodology are best revealed in context, within the narrative.
These are among the passages of greatest interest and value to me, also listed to suggest the scope of McKelvey’s coverage:
o Perfect Problems (Pages 6-8)
o Winter Brainstorm (15-19)
o Square’s First Day, and, The Moment (33-35)
o Suare’s Five Problems That Required Solutions That Did Not Exist (35-51)
o Square’s Innovation Stack (57-69)
o The Perfect Predator (72-74)
o Nose to Toe (78-81)
o The Answer to Nearly Every Business Problem (83-86)
o Sometimes Discomfort Is Good (91-94)
o The Bank of Italy (115-129)
o IKEA’s Innovation Stack (136-142)
o Southwest’s Innovation Stack (149-158)
o Being Ready (173-175)
o The Math of an Attack (187-189)
o Adopters and Adapters, and, New Ideas vs. Changed Ideas (200-203)
o Feedback Failure (206-208)
o The IKEA Effect (210-212)
o Disrupting Disruption (227-228)
o How Big Is the Market (231-234)
o A Mass of Innovation (242-243)
Innovation stackers are not wanderers. They have a specific destination in mind, and when attempting to reach it, usually encounter all manner of questions to answer and problems to solve. McKelvey prepares his reader to follow a process that will reach the aforementioned “entrepreneurial moment when you first realize that you are attempting to do something new” and are attempting to “solve a problem that no one has solved before.”
According to Jim McKelvey, there is another key moment when you can only say either “I’m not going to do anything more” or “I am going to solve this problem.”
Who will gain the greatest benefit from reading this book? There are several groups. First would be those who are now involved with planning to launch a new business or have only recently done so. Next would be those who need cutting-edge thinking to guide and inform their due diligence prior to the development of a new or better product or service. Finally, I think this book is also must reading for senior-level executives — especially CEOs and COOs — in organizations in need of a workplace culture within which entrepreneurship is most likely to thrive.