Expecting corporate culture to tolerate or encourage radical change or innovation is like expecting a country to encourage rebellion against itself.
How can companies manage innovation? By its very nature, innovation charts out a new path. Radical innovation often signals a break with the past. Change is always disruptive of the established patterns. But disruptive innovation turns conventional wisdom upside down. It essentially seeks a fresh, new way of looking at products and processes. It is beyond the capacity of most companies to understand and assimilate radical change.
But if there is no magic formula to encourage disruptive innovation, creation of an enabling environment appears to be a vital ingredient. Like the primordial soup from which life originated, the spark that triggers innovation cannot be made to order. But the existence of the "soup" is essential for the spark to do its magic. Companies have to get these vital ingredients within striking distance of each other to get results.
Commissioner of Finance
Government of Haryana (North India)
From most managers' point of view, when you already have businesses generating steady revenue and profit, a lack of innovation is not the worst thing that can happen under your watch. The worst thing that can happen to a healthy business is to run into problems while you were spending your time on disruptive innovations! Not surprisingly, only under crises do most companies innovate.
Strategic Planning Manager
The ideas in The Innovator's Solution are definitely useful. However, there is no easy pathway in adopting a disruptive technology. And debate will continue on the validity of adopting disruptive technologies even if top management thinks they have identified such technologies. Investors will not be easy on such companies as Nokia, which is in the process of adopting the potential disruptive technology of digital convergence.
Controversy will continue regarding the strategic pathway to be followed during the acquisition of such technology, considering the uncertain situation. Technology acquisition options will oscillate between in-house development, acquisitions, and use of alliances. The answer to this question would be welcome. But uncertainty at the introduction of a disruptive technology probably makes it impossible to come up with a "correct" answer due to pressure from investors.
Hence, the right strategic pathways to be followed during disruptive technology adoption at the time of the introduction of this technology still remain a dilemma even after the introduction of "the innovator's solution." Research in this direction would be welcome.
Marketing Department Faculty
Rennes International School of Business (France)
Check out the work of HBS professor Donald Sull and his work on how companies become entrenched via the commitments they make. I strongly suspect that his work is relevant.
Also, let's go back to human nature. People aren't inherently fond of disruption. Stability is achieved by feedback mechanisms that suppress disruption, rather than introduce it.
In the computer industry, Lotus introduced several product concepts that were incredibly groundbreaking, but it took so long to educate the market that Lotus had to turn to other product lines to keep their cash flow going. (Agenda = world's first and, alas, only personal information manager. Improv = very sophisticated, powerful financial modeling tool. Notes = collaboration-ware.)
President
Leadership Decisionworks, Inc.
The heart of business success in the future may be in altogether different forms of innovation: process innovations that have the potential to deliver the same performance at a lower cost/price; innovations in the way we think—inductive as opposed to the traditional managerial process of deductive reasoning (Hammer and Champy); innovations in organizational structure—flat, web-like structures where the CEO is merely the first among many equals; innovations in the seamless integration of value-creating activities across countries, cultures, and continents; and so on. The list can be as long as one's imagination permits. These could be more crucial than product innovations.
In fact, all the four guidelines proposed by Clayton Christensen and Michael Raynor have been highlighted in one form or another by various experts. The only difference is perhaps in terminology: Be proactive, identify champion evangelists, foster process ownership, and encourage intra-organization competition by having concurrent teams working on the same project.
The day is not far off when organizations, to survive, would be forced to think of solutions first and then identify the problems that the solutions might be able to address.
Executive Vice-President & Professor
Alliance Business Academy, Bangalore, India
God gives us two brains: the left brain and the right brain. There is a good reason to have both because one is in charge of logic and the other is responsible for innovation. That's what we use in our business operation. We need strategies for long-term growth and those for "disruptive" success.
It is always a question of how to carefully blend and balance the two, rather than just using one or the other.
If we only needed one, we wouldn't have two brains, right?
Innovator's solutions are imperative in a competitive environment where specialties get commoditized very quickly.
The growth curve flattens with the entry of more players. And to sustain a high growth rate, it is inevitable that any corporation differentiate itself from competition. This is a not an unnatural act but an essential feature for any business.
Financial Controller
Perstorp
However much they profess to foster innovation, few companies go so far as to deliberately encourage ideas that are overtly radical. An organization's rules and procedures are basically meant to perpetuate the status quo, not to overturn the prevailing scheme of how things are done.
The guidelines for innovation in The Innovators' Solution are thought provoking but need to be implemented with proper precautions to prevent chaos. These guidelines essentially boil down to encouraging two parallel cultures in an organization—one that encourages perpetuation of successful formulae, the other that encourages the radical opposite. Senior management's dilemma is how to balance the two diametrically opposed cultures. As the authors concede, in practice hardly any organization has managed this balancing act.
Nonetheless, the ideas generated are thought provoking. The nimbleness and flexibility with which an organization attempts this balancing act will determine its ability to survive or thrive in a disruptive and uncertain environment.
Assistant Manager
Emco Switchgears Ltd., Chandigarh, India.
As a [well diversified] investor, I do not care whether it is existing organizations or new ones which capitalize on disruptive technologies. In fact, it is probably more efficient for some companies to specialize in milking cash cows while others engage in the quite different business of bringing new technologies and ideas to market.
How do you get an elephant into a refrigerator? Most of us will immediately focus on breaking down the elephant into pieces in order to solve the challenge.
This fact answers the question "Why can't most companies create ongoing disruptive technologies?" Business people have a tendency to overthink and overengineer instead of solving basic customer needs. We are a culture of "more is better."
The answer to the elephant/refrigerator question: open up the refrigerator door and put the elephant inside.
As my grandmother says, "Don't try to be too clever. You'll think yourself right out of the ballgame."
Business Development Manager
Poelmann Chan Group (Hong Kong)
"Disruptive" is the clue for why the proposed method of sustained growth will fail in most organizations.
Business lifecycles start with the risky development of a product to take advantage of a unique opportunity. Successful results are high-margin revenue streams with relatively low marketing and sales expenditures, i.e., a money engine. These developments have innovators as the leadership force in their creation. As companies progress, the innovators are supplanted by professional management types who exploit the money engine while the innovators find fulfillment elsewhere.
B-schools graduate and laud those who are risk-averse and self-indulgent optimizers of existing systems, rather than risk-taking creators of wealth-making money machines. Upon reaching "C" levels, they disrupt the innovative process by actively reducing risky internal investments, like R&D or changes to production processes, to minimize the corporate expense. Another identifying behavior is the outsourcing of business processes, under the pretext of "cost savings," that are belatedly recognized as functional business assets providing distinct competitive advantage.
An empowered board of directors achieves balance between disruptive innovation and sustained exploitation—by maintaining a level of revenue to be reserved for disruptive innovation. CEOs counter this situation by consolidating their control of the board as chairman. Too often, huge compensation packages serve as the attractant and reward for this achievement.
Comparison of Apple Computer's failure (innovator/marketer Steve Jobs forced out in favor of John Sculley, "professional" CEO) against Microsoft's long-term success ("We have three years until failure," Bill Gates, College dropout) is strong evidence that professional senior management is detrimental to the long-term success of a corporation. It remains to be seen whether that successful approach can be permanently set into the governance culture or whether Microsoft will succumb to the same complacency plaguing boardrooms today.
Christensen and Raynor provide incredibly obvious (at least to me) means of generating the disruption to fuel the continuous growth engine. They neglect to identify the key environmental characteristics that nurture and sustain that engine.
President
Systems Synergy, Inc.