Jeremy Gutsche is the innovation consultant who founded Trendhunter.com, a site that tracks emerging trends. He has just published the book, Exploiting Chaos: 150 Ways to Spark Innovation During Times of Change.

Here are some suggested approaches from Jeremy Gutsche’s book.

Innovation Don’t: In the 1950s, RCA was a leading maker of vacuum tubes, the electronic device critical to the development of radio, television, and, ultimately, computers. But as transistors and, later, semiconductors were being developed, the company didn’t adapt, losing its dominant position in what would become the computer chip industry.

Innovation Do: After the Internet bubble popped in the early 2000s Apple CEO Steve Jobs was criticized for not trimming his R&D budget, but that investment led to 2003 launch of iTunes and Apple now sells more music than Wal-Mart.

Innovation Don’t: Don’t be a monkey brain! “Culture eats strategy for lunch,” notes Gutsche. He cites a study of monkeys that shows how strongly behaviors are imprinted on new arrivals—whether newborn or adult. In other words, a company can’t change strategy or adapt without changing its culture, which is embedded in the language employees use, their expectations, and their general sense of “how things are done.”

Innovation Do: Forget past accomplishments. Accomplishment blinds us to the urgency of reinvention. Case in point – “On the eighth day, God created Smith Corona.” So reads the Web site of the company that introduced so many innovations in its first 100 years—the first portable typewriter, first electric typewriter, first electric dictionary, first laptop word processor—that it took itself for granted, unable to envision a world without typewriters.

Innovation Do: Learn from failure. Successful ideas first require excessive testing and experimental failure. John Grisham was rejected by a dozen publishers before getting a deal. As a startup, Cisco was rejected by 76 venture capitalists before landing money. Thomas Edison, in his words, “discovered 1,000 ways not to make a light bulb” before hitting on a design that worked.

Innovation Do: Create a gambling fund. In the late 1990s the BBC had no hit shows and was losing viewers. A new chief executive and chief financial officer introduced one small change to the broadcaster’s innovation process: They created a gambling fund to bet on risky ideas. The first big winner: Ricky Gervais’ series, The Office which had failed the normal screening process.

Innovation Do: Require failure. (Yeah, that’s what he says. Pretty innovative, that on its own.) IBM founder Thomas Watson Sr. refused the resignation of a manager who had just lost the company $10 million, saying, “You can’t be serious. We just spent $10 million educating you.” Former Warner Bros. Chairman Steven Ross went even further, firing people for not making mistakes.

Innovation Do: Act crazy. A senior leader can unintentionally squelch the creativity of a group. Instead, he or she should throw out a wild, impractical idea at the start of a brainstorming session. That will help others in the group to think more freely (and to feel free to express themselves). The role of a leader is not to suggest great ideas, but to create an atmosphere that fosters the ideas of others.

Innovation Do: Hire Freaks. As Tom Peters says, “freaks are the only—only—ones who make it into the history books.” Nontraditional thinkers offer the maverick ideas and the personality a company needs to adapt.

Innovation Do: Budget. (After the last two some sanity.) Be creative but stay in the box. When Michael Eisner took over a money-losing Disney, he imposed strict project budgets, insisting that employees fit their creative ideas inside the financial box. When the opening scene of the movie Outrageous Fortune required an additional set, for instance, the writers were forced to rewrite—and came up with a cheaper and more effective opener. Eisner’s philosophy helped Disney grow from a $2 billion market cap to more than $60 billion.