The Best Strategy & Innovation Books

The Personal MBA Recommended Reading List

2008 Edition: Revised and Updated

Top MBA programs don't have a monopoly on advanced business knowledge: you can teach yourself everything you need to know to succeed in life and at work. The Personal MBA Recommended Reading List features only the very best business books available, based on thousands of hours of research. So skip b-school and the $100,000 loan: you can get a world-class business education simply by reading these books.

About This Category:

The Strategy & Innovation category will help you manage uncertainty. The books in this category will teach you:

How to create a solid but flexible business strategy.
How to anticipate and take advantage of changes in the market.
How to identify, collect, and test promising new ideas.

Purpose: The Starting Point of Great Companies by Nikos Mourkogiannis

If you want to lead your company, you must think about purpose.

Purpose: The Starting Point of Great Companies is about your business' ultimate, fundamental strategy: why does your firm exist, beyond the easy answer of making money? The clarity of your answer will determine everything from your company culture to your staff's morale.

The primary insight of Purpose is that people are inspired and motivated by factors beyond the bottom line: they crave a meaning behind their actions powerful enough to give them motivation to complete the work and hope that their work is moving them towards a better future. Mourkogiannis discusses the four primary business purposes: Discovery, Helping, Achievement, and Heroism, and gives many historical examples of businesses that have recognized their purpose.

Purpose: The Starting Point of Great Companies is one of the rare books about leadership and business strategy that can fundamentally change how you view your business.

(Tip: This book contains a fantastic appendix with “Fifty Key Points” for easy reference and review.)

Competitive Strategy by Michael Porter

Michael Porter has been a world-renowned expert on corporate strategy for decades, and his books and papers are a staple of business school classrooms around the world. The “five forces” model of corporate competition presented in Competitive Strategy provides an intuitive and thorough way to analyze the attractiveness of any existing industry.

By paying particular attention to the power of suppliers and customers, the threats of new entry and substitutes, and the level of internal rivalry in the industry, Porter argues that it's possible to identify opportunities and develop strategies that create a profitable, defensible competitive position for your firm.

If you're involved in or fascinated by the global game of business dominance, read Competitive Strategy: it's still the best primer on successful business competition available.

Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne

The thesis of Blue Ocean Strategy is simple: why compete with other firms if you don’t have to?

In contrast to Michael Porter’s work, W. Chan Kim and Renee Mauborgne advocate a different approach to strategy: focus on creating new industries that change the competitive landscape completely. By focusing your resources on creating uncontested market space (a “Blue Ocean”), you’re working to simultaneously make your firm the industry leader and make your current competition irrelevant.

Blue Ocean Strategywill help you identify new areas of business that your company can pioneer. After all, there’s no sense in operating in highly competitive war-zones (“Red Oceans”) if you have a choice.

Seeing What’s Next by Clayton M. Christensen, Erik A. Roth, Scott D. Anthony

Clayton Christensen is famous for developing theories of why firms rise and fall in The Innovator’s Dilemma and The Innovator’s Solution. Seeing What's Next is a comprehensive compilation of the ideas presented in both of these landmark books, with a smattering of business history thrown in for good measure.

This book attempts to answer the question: “How will innovation change an industry, and what impact will this have on the firms I care about?” By building on a framework of three core theories of innovation, the authors develop a three-part process of predicting industry change: (1) identifying signals of change; (2) analyzing competitive battles; and (3) understanding strategic choices.

Predicting the future is notoriously difficult, but Seeing What's Next provides an approachable model for making the best decisions you can with the information you have at your disposal.

Learning From the Future by Liam Fahey and Robert Randall

The future is fundamentally uncertain: even the best traditional strategic plan is 100% certain to be incomplete, and rigid plans are doomed to fail. Learning from the Future is a collection of essays designed to help you develop scenarios: stories about the future that can inform your decisions as the business environment changes.

Fahey & Randall join 24 other experts in sharing their knowledge and experience of using scenario planning strategies to guide business decisions. You'll learn how to anticipate changes in the market that will affect your business, imagine your possible responses to those changes, and develop a flexible plan that will guide you toward the results you want.

No one can predict the future, but with the knowledge contained in Learning from the Future, you'll be prepared for whatever the world throws at you.

Innovation and Entrepreneurship by Peter F. Drucker

"Because the purpose of business is to create a customer, the business enterprise has two - and only two - basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs."

Drucker's Innovation and Entrepreneurship was the first book to discussion business innovation and entrepreneurship in a systematic way. By examining where innovation and entrepreneurial activity happens, you'll be able to create and manage a successful entrepreneurial business without undue risk.

Drucker discusses seven clear signs that indicate opportunity for business innovation: (1) unexpected success, (2) incongruity between reality and ideal, (3) identification of an unmet need, (4) changes in industry or market structure, (5) demographic shifts, (6) changes in public perception, and (7) discovery of new knowledge. By watching for these signs to identify an opportunity, then creating and acting on a systematic plan to deliver a valuable product, businesses can create new value.

Innovation and Entrepreneurship isn't just for start-ups: existing businesses and public-service institutions can also learn a great deal from this book.

Myths of Innovation by Scott Berkun

Innovation is a very hot topic in the business world. With the success of your business riding on having the "next big idea," how do you go about ensuring your thoughts are "innovative"?

In Myths of Innovation, Scott Berkun dispels 10 commonly held beliefs about innovation, revealing that there's nothing magical about discovering new ideas.

Using historical examples of innovations like the assembly line, QWERTY keyboard, and the airplane, Berkun shows that innovative ideas aren't created by divinely-inspired rogue geniuses... they're the result of the mundane preparation, research, experimentation, persistence, time, and luck of ordinary people who are open to new thoughts.

It's particularly difficult to innovate on demand, and Berkun is clear to point out that the best ideas don't always win. Even after having an idea, it's typically not apparent that's it's particularly innovative or good, and it's likely that your idea will face a great deal of resistance. By knowing what to expect in advance, you'll be less likely to give up or invest precious time and effort on adopting complex and unrealistic "innovation methodologies".

After reading Myths of Innovation, you'll be prepared to capture and experiment with promising ideas whenever, wherever, and however they show up.

(Note: Berkun also authored Making Things Happen, a book about effective project management that's featured in the Productivity & Effectiveness section of the PMBA Recommended Reading List.)

Green to Gold by Daniel Esty & Andrew Winston

You ignore the environmental impacts of your business ventures at your immediate and long-term peril. Green to Gold is a comprehensive guide that helps you understand and reduce the environmental impact of your business in a way that preserves or enhances your profitability.

Etsy and Winston guide you through the entire process of examining your business' value chain and identifying opportunities to reduce your environmental impact. Even incremental improvements in emissions and waste add up in the long-run, and making environmental standards a priority will help you appeal to your customers while avoiding time-consuming and costly regulation.

Focusing on the environmental impact of your business' actions can also have a positive affect on your business: by using environmental sustainability as a creative constraint, paying attention to waste and emissions can help you identify opportunities to streamline your operations and reduce costs, increasing your profitability.

By reading Green to Gold, you'll be well on your way to adopting an environmental strategy that enables your business to do well while preserving the Earth's natural resources for future generations.