While it may be hard, change is not impossible nor need it take as long as you've indicated. There are better approaches which can allow for much greater adoption more quickly leading to improved results in far less time. Take a look at http://www.thephoenixprinciple.com

Thanks for your links to Toyota. As it happens I worked as a consultant and interim Head of CRM for Toyota for a number of years. I saw first hand how small-i innovation through the Kaizen process was literally everybody's responsibility. For example, I ran marketing programmes where we made 100+ small improvements during their first year in the market using Kaizen. I also saw how Toyota invested in BIG-I innovation through a structured innovation process with a strong front-end. It is the strong front-end that is the key to success for Toyota.

Part of the reasons why radical (read: BIG-I) innovation is so unsuccessful is that it isn't innovation at all. It is invention. Inventors have great ideas, push them through the internal development process and then launch them with a marketing fanfare. Research suggests that around 80% of these inventions fail in the market. In contrast to this, Toyota starts its radical innovation with a thorough understanding of customers' needs and uses that as a catalyst to think up radically different technological solutions that will meet its long-term commercial objectives too. Technology solutions change all the time, but customers' needs do not.

Radical innovation can be successful, but you have to stack the odds in your favour by first starting out with a thorough understanding of customers' needs, then, and only then using them as a catalyst to find radical, new, commercially-viable solutions to meet them.

Graham Hill
Customer-driven Innovator

Because of my experience in EVO I also disagree with 2 of your definitions:

- significant (5-10x) improvement in known features
- significant (30-50%) reduction in cost

I do not think that it is unrealistic to achieve such goals – because I have seen it done on features in software products I managed and I know of other companies who did the same (using EVO).

I can see what you are writing and understand why people accept it as making good sense but what I am reading is "Jantelov" – I am not so keen on the thought that no one should be bold enough to think they can improve so much on something that already exists.

That's like saying that thinking out side the box is not welcomed as a mgmt discipline in most companies.

That may be true in some cases which would be why we see new competitive companies rise to out compete older giants who got too comfortable and stopped thinking outside the box.

When you stop pushing your limits you allow others to take over.

That is a choice – but I do not think it is good advise.

First, let me emphasise that I absolutely agree on the need for radical innovation. However, I would like to add more details to this article as i did my MBA on innovation:

Time-to-market of radical innovation does not per se take 5-7 years. This may be true for technology-driven radical innovation, if the company tries to push new technology on the market, which users don't want or need, but radical innovation does not necessarily introduce new technology. Much radical new business combines known technologies in an new-to-the-world way and thus create a new business model, which – at least for some time – gives the company a competitive advantage.

Radical innovation is not a new discipline. Actually it origined by Peter Schumpeter in 1942 as "creative destruction". Schumpeter "invented" the term innovation in 1934 calling it "the motor of development". However, modern business may have forgotten innovation (perhaps due to short-term shareholder value) but have now rediscovered it. I agree that many managers still don't know what innovation actually is, but that doesn't mean that the company should neglect it – managers must learn. And once again, don't confuse radical innovation with technology and time-to-market.

A helthy business looking for both short-term results and long-term sustainability should keep a balanced portfolio of low, medium and high risk projects i.e. incremental, semi-radical and radical innovation. Project portfolio management is yet another skill that managers must learn, including a strong ability to say "no" to projects that prove to be poor.
It can be argued that business performance of multiple incremental innovations exceeds performance of radical innovation, because the latter are rare in almost every industry – Toyota are great at incrementals.

Buying start-ups is a strategic option but remember that success rate of mergers & acquisitions is rather low – it may be a 50-50 bet or even lower, depending on what you buy and how you treat it.

Some large big companies actually managed to change themselves for the future – e.g. IBM (office hardware -> computers -> consultancy) and Virgin.
A learning point may be that diversifying into new industries may kill the business – sticking too much to your old industry certainly will kill it. Just look at General Motors – will they be able to renew themselves? Until now they failed several times. So innovation is also about renewing your business in due time.

BR Svend

In Denmark the Technical Univesity has launched educations focused on overcoming the barriers that Stefan mentions – Certificate in Entrpreneurial Leadership a 5 month MBA level course working on company cases – teachers are a.o. Richard Leifer, Joanne Hyland and many other prominent US leaders within Radical Innovation.
see http://www.tem.dtu.dk/uddannelse/cel.aspx

And to overcome organizational/Management barriers the course Leading Corporate Entrepreneuship is a 7 days experience for Leaders. http://www.tem.dtu.dk/uddannelse/lce.aspx

Both are highly recommeded..

If interested check out

While risky and difficult radical innovation is the one thing a company can do to escape the product/company life cycle trap. Incremental innovation extends the life of a company, and is necessary, but once a product type has peaked out, it's the re-invention or radical innovation that saves the company.

I think of Virgin. What if they had stuck strictly to music? Record labels are disappearing because of iTunes, free downloads, and inexpensive recording technology. Virgin exists now because they got into new businesses and did them well.