Most organizations fail to sustain growth over the long term because they are not able to innovate on a systematic basis. Even when we talk about large, presumably successful companies there is a clear pattern where they create radical innovations once or twice, and after that they rely on “incrementalism”.
Category: Innovation
Innovation is a 2-level game
If we take a look at biological sciences, particularly at the evolutionary theory, we can see that species go through periods of gradual change where the natural process of variation, selection and retention will promote the “survival of the fittest”.
Are you inventive or innovative?
Now, I am talking not only about people who work in research centers but people who will come up with innovations in their house, in their relationship, in their work routine and so on; meaning we need a better definition.
Incremental and Radical Profits
It is not a novelty the fact that radical innovations generate more returns than incremental ones. Just to have an idea of the numbers there is a study from the INSEAD finding that 86% of all innovations are incremental, but they are responsible for generating only 30% of profits on the market. The large pie, over 60% of the profits, comes from the radical innovations, which account for only 14% of the total innovations.
Strategic Planning vs. Strategy Innovation
It is important to differentiate between strategic planning and strategy innovation. Most corporations indeed have defined processes only for carrying out the former, basically studying historical data and making extrapolations for the future.
The Electronic Cash Register Innovation
What do daycare teachers and managers have in common? Both should learn storytelling. Stories represent a powerful tool to illustrate ideas, convince people and generate commitment. Below you will find the story of the cash register machine and NCR, the undiscussed leader in the manufacturing of mechanical cash registers during the 1960s.
Innovation and Unarticulated Needs
I do agree with the author to a certain extent, mainly with the idea that under some circumstances only companies are able to develop radical innovations. But that has to do with the fact that consumers often times are not able to articulate their needs, and they are not necessarily aware of what one could possibly do with current technologies.
More Predictions Gone Wrong!
This is the second part of my collection of quotes (click here to see the first part). I find particularly interesting the companies that turned down multi-billion dollar opportunities like IBM refusing to invest in the photocopier or Atari rejecting Steve Job’s proposal to develop the personal computer. Those companies were nonetheless being managed by very smart people, understanding what influenced such decisions is the complex matter.
Invention vs. Innovation
The first confusion to dismiss is the difference between invention and innovation. The former refers to new concepts or products that derive from individual’s ideas or from scientific research. The latter, on the other hand, represents the commercialization of the invention itself.
Predictions gone wrong!
The collection of quotes I present below illustrate how managers, scientists and academics often fail to free themselves from paradigms. As Peter Ustinov said “If the world should blow itself up, the last audible voice would be that of an expert saying it can’t be done”.
The list was too big therefore I decided to break it up in 2 parts. Have fun.