True/False: Companies Should Forget About Radical Innovation
Welcome to a new format on my blog! Here I will present innovation issues and challenges and ask whether you believe this to be true or false.
The intention is to generate some good discussions that can provide new insights for all of us. I hope you will join these discussions as well as suggest topics for future posts. This first issue is an update from an earlier post.
Most companies should forget about radical innovation because…
• Radical innovation is too difficult for most companies and they should play it safer when it comes to innovation. If companies succeed with radical innovation, luck has a lot to do with it.
• It usually takes 5-7 years before you see results on radical innovation projects. Consider the typical process of such projects which takes 3-5 years: you start a project when times have been good for at least a couple of years (you dare to invest), you hesitate as good times come to an end and you shut it down when we hit a crisis like now. This gives you heavy investments without results and frustrated employees.
• Only few executives, leaders, managers and employees have successful experiences with radical innovation. They need the experience, mindset and skills needed to make radical innovation projects survive beyond 3-5 years and thus be able to prove themselves.
• Innovation projects that range between incremental and radical innovation are more likely to succeed making such projects more acceptable to risk-adverse executives and managers.
• It is not only difficult for big companies to create radical innovations, it is often contrary to their best interest and culture. Big companies have no incentive to change their markets.
• Many will think of Apple as a company that successfully – and repeatedly – makes radical innovation happen. OK. But where are the other good cases? And what about the hundreds of failures we never hear about for each of these successes?
Companies should do radical innovation because…
• Successful radical innovation projects is possible and some consulting companies have developed processes that can be learned and adapted. Check out Innosight and Radical Innovation Group for inspiration on this.
• When radical innovation is done successfully companies can create new industries and receive huge pay-offs.
Should companies forget about radical innovation? Is luck a big element on this? Is the potential pay-off so big that companies cannot afford not to do radical innovation?
I look forward to hearing your true/false views on this.
Great article, Stefan.
I don't like "incremental innovation" that's just another word for institutional timidity!
Radical innovation is the way a company can show its confidence. I don't agree it takes 5 to 7 years to show results – Look at Apple. The iPod was nothing to do with computers, nor was the iPhone. 2 years from design to market.
Look at HSBC, a conventional bank yet launched an on-line only version, First Direct in 12 months.
Look at Formula 1. New, radical designs every six months. You just need the culture to be in place!
Good questions, Stefan!
I like disruptive approaches and I think that companies doesn’t see radical innovation as a good challenge because they live now with fear and they are not well informed.
A lot of Consultants are not prepared to help organizations with Radical Innovation and Organizations just want an event instead of working on that. Last year Rowan Gibson was here in Portugal (Lisbon) and he, with is marvelous work, mobilized people and some organizations to radical innovation. It was a wave. We need persistence! We need to tell a good story about disruption.
I believe that we don´t need five or seven years and I think that is not a question of time, but how to do it!
Dear ALL,
Delay can take more than 10 years in order to win pre-negotiation concessions!
Poor Communication don't help.
We must rethink the strategy !
Stefan – yesterday I watched Seth Godin's Lizard Brain video and it's so pertinent – there are so many excuses for not doing 'radical' or disruptive innovation – after all, the odds of failure are high, it's hard, etc. etc. But I think companies should try – the adage you get what you expect holds out – set the goal out there for disruption.
Companies need a balanced portfolio of incremental/quasi-radical/radical – and whatever that balance is (not equal parts) depends on the company, but if you don't set it as a goal, it's much less likely to happen.
Moreso, I think companies should view the process of creating/commercializing radical innovation just as important as the innovation itself…all the learning, the failure, the application of learning, the iterative experimentation/prototyping process to get to the 'decision' point, the culture and teamwork that occurs … are all very important for changing the company's culture to be more receptive (and able?) to radical innovation the next time – the process & the innovation matter and by doing it over and over you develop expertise (in success & failure), institutional knowledge, and increase your odds of a radical innovation.
Not that this is easy, but it's tremendously transformative…and those that don't even try at some point will disappear.
A significant source for corporate strategy changes come through radical innovation. To look at radical innovation based solely on a payback in 5 years misses the fundamental purpose of this work. The purpose is to experiment and discover entirely new lines of business, markets, business models and technologies. Radical innovation done well changes the corporate strategy as described by Robert Burgelman of Stanford.
Incremental innovation is important, and as suggested needs to consume more of the innovation resources in the portfolio. Gains in incremental innovation buffer the life cycle of the core businesses and provide a higher payback use of resources serving the core.
Bottom line, you need both radical and incremental innovation to have a viable future.
False.
This quote by Edward de Bono says it all:
"Removing the faults in a stage-coach may produce a perfect stage-coach, but it is unlikely to produce the first motor car."