On December 23, 2008, Harvard Business School Publishing published a contribution from Scott Anthony, president of Innosight, an innovation consulting firm. He discussses the increased receptivity for innovation during tough economic times and the disciplines needed:
Thriving in the Great Disruption requires a particular breed of innovator. Specifically, innovators should look to master three disciplines:
1. Placing a premium on progress. While more and more companies recognize the name of the game is transformation,the tolerance for blind experimentation has never been lower. Innovators will need to continue to find creative, cheap ways to bring their ideas forward. Fortunately, they can tap into a plethora of powerful tools to facilitate rapid learning.
2. Mastering paradox. Leaders in most Fortune 500 companies grew up in an era where they could succeed largely by exploiting their existing business. Today's leaders need to master both exploitation and exploration. They need to develop the ability to rely on precise data in their core business and intuition and judgment when they are creating new growth businesses. They have to live the old F. Scott Fitzgerald mantra, "The test of a first-rate intelligence is the ability to hold two opposed ideas in the same mind at the same time, and still retain the ability to function."
3. Learning to love the low end. In the dark days of October and November, consumers flocked to discounters like Wal-Mart and McDonald's. Increasingly value conscious consumers and hungry low-cost competitors mean that innovators have to learn how to love low-end business. That doesn't necessarily mean that companies have to slash prices. Rather, they have to figure out how to deliver what consumers in low-end segments consider value.
We particularly like the first two. Personally, we disagree the third, believing that innovation's advantage over "milking" an existing business is the opportunity to create new value, command premium pricing, and higher margins. Eventually this will lead to another cycle of "milking" but this is indeed the exciting part of the cycle. Here's our comment:
In the media and entertainment world, we have been so focused on squeezing what's left from an old model. Meanwhile new "bottom up" models have delivered for new brands like AMAZON. How exciting it is to shift focus on untapped opportunities and technologies. Hallelujah!
http://discussionleader.hbsp.com/anthony/2008/12/innovating_in_the_great_disrup.html
© 2008 Katherine Warman Kern
