Fueling Change

Dubbed "Mr. Creativity," by The Economist, John Kao lives in San Francisco but travels the globe teaching corporations and governments how to foster innovation. While other nations are massively funding inventive research, Kao says America has become "the fat, complacent Detroit of nations." In his new book Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters and What We Can Do to Get It Back, Kao describes how you can reignite your innovative drive.

First, blow up your company structure. Good companies are structured like "spaghetti"--anyone can access anyone else whenever they like. Many entrepreneurs think of innovation as a mystical process--"being some prophet and going off on a vision quest," Kao says. But all you need to do is free your employees to interact randomly so they can generate innovative sparks for the company.

Then think in terms of big changes, not a new flavor of the same old Oreo. "Incremental innovation is not a winner's game," he says. Instead, think iTunes or YouTube. Says Kao, "The opportunity these days is to become a disruptive innovator."

This article was originally published in the November 2007 print edition of Entrepreneur with the headline: Fueling Change.