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Does Your Organization Really Want Disruptive Innovation?

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I was recently at lunch with an innovation leader of a
Fortune 500 organization. He is a super smart guy and also a great person to 'chew
the fat' on strategic issues with. We were talking about the desire from his
leadership to focus on supporting the development of disruptive ideas.
While this is a really valid topic and there is much talk of
the value of disruptive organizations and their ideas, we debated the ability
of large, complex organizations to support disruptive thinking.
As you are likely aware, disruptive innovation has been the
holy grail of success for corporate leadership over the past 20 years, in part
driven by evangelists like Clayton
Christensen
and his consulting firm Innosight.
Of course, since Clayton Christensen wrote his seminal book on disruptive
innovation (The
Innovator's Dilemma
) in 1997, the business world has drastically changed. The
book has also come under scrutiny in a recent New
Yorker magazine article
that critically examined the underlying research of
the book. In the article, Jill Lepore pulls apart certain elements of Clayton's
theory with focus on the motivators of disruptive innovation and an analysis of
case studies that were used.
Despite these criticisms, the thinking around the value of
disruptive innovation continues. In fact, it has become even more of a priority
for leaders of mature businesses, as they see a steady stream of new entrants
lining up to destroy their existing business models. In the past these leaders
could rely on their scale and reach to crush upstarts. However, now (perhaps justifiably)
they are seeing that technology, social and economic circumstances have
converged to the point where challenger businesses can rapidly overtake
incumbents.
It is only natural for leaders of established businesses to
determine that they want to pursue disruptive innovation. Sure, in the right
circumstances (e.g. desperate and in fear of imminent collapse), I think truly
disruptive innovation can be a valid path to the long-term survival and growth
of large, mature organizations. However, most organizations that I deal with are
more stable. I feel that they talk about changing market dynamics, competitive
landscape, and margin pressures as mid-term concepts, rather than immediate,
burning needs that threaten the ongoing existence of their business. As a
result, they talk (a lot) about pursuing disruptive innovation, but the reality
is that they don't really want, or are able, to support it.
The reasons for this are complex, but at its heart it is
just easier in a large organization to say 'no', rather than a risky 'yes'.
Ironically 'no' as a response rarely has any negative repercussions. Further, as
a leader there is an infinite variety of ways to say 'no', without actually
uttering the words. Ask for more details, direct the idea to another group, say
'yes', but with an impossible budget or timeline. It's easy to kill an idea.
Saying 'yes', can be risky and time consuming.
So we started talking about how these incumbent
organizations can truly support disruptive ideas.
One option is to separate the ides out from the (possibly
toxic) culture of the 'mother ship' business and grow them through an
incubator. The issue here is that the ideas eventually need to come back into
the organization to generate the necessary returns, which is when the real
problems start.
Alternatively, HR and innovation groups can partner and set
up systems to encourage the development of new ideas, but small changes in set
HR policies rarely make a long-term difference to how a company operates. We
talked about open innovation as an opportunity, but once again, as that
thinking is introduced into an organization, they are often shot down (it is generally
far easier to say 'no' when the idea came from outside).
In the end we both agreed that the only way for a large
organization to develop disruptive ideas is to build a broad base of support
from within the organization. Short-term steps won't cut it in terms of
developing ideas that seek massive change within an organization. It just makes
sense when you think about it.
I have written about building this base of support in the past,
but in short, it revolves around the need to build networks of employees within
organizations that are connected with innovative thinking and approaches. Some
companies choose to call individuals within these networks 'Innovation Catalysts',
'Innovation Champions,' etc. Whatever they are called, it is important to note
that there are a bunch of variables and approaches to growing these resources,
but what is very important is that a full strategic framework to guide the
development of the network going forward. Short-term thinking around these
networks just won't work.
So that was lunch. In retrospect I wish it was easier for
large organizations to be disruptive, but like I said, it's just a tough
situation and requires a hell of a lot of energy to work well.
I will let you know what we talk about next time around.
About the Author:
Anthony is the CEO of Culturevate (www.culturevateinc.com),
an organization that empowers a company's employees to execute ideas and
inspire a culture of innovation, through employee networks, a resource portal
and training programs (developed in association with Professor
Chris Labash
 from Carnegie
Mellon University
). Anthony is a widely read author (www.culturevateinc.com), speaker and
advisor to industry leaders at organizations such as Pfizer, U.S. Postal
Service, Johnson & Johnson, ADP and Fidelity. He previously led The BNY
Mellon innovation program and has a Masters of Commerce (University of Sydney) and Bachelor of
Economics (University of Newcastle).

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