Here is an excerpt from an article written by Gina O’Connor and Christopher R. Meyer for MIT Sloan Management Review. To read the complete article, check out others, sign up for email alerts, and obtain subscription information, please click here.
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A company’s future depends on the new directions it explores and develops today — and that requires different structures and capabilities from incremental innovation.
Many businesses launch on the strength of an innovative product or service. But somewhere along the line, most successful companies become more focused on protecting the business they have than in creating new streams of growth that position the company for the future. To enjoy long-term success, businesses need to develop the capacity for systematic strategic innovation, just as they have built out their operational capabilities.
We define strategic innovation as the discipline that transforms creative discoveries into new platforms of business that bring significant value to the market and the organization. Unfortunately, this is a capability that few companies have managed to build. For most, innovation comes in the form of process improvements to reduce costs and enhance current product lines to fill niches and match competitors’ offerings — what we call incremental innovation. Innovation outside the core product lines tends to be accessed through acquisition or venture investment and is often poorly integrated into the mainstream product portfolio. None of these practices secure the company’s future.
It doesn’t have to be this way. Over years of research and work with successful innovators, we’ve seen how exemplary companies practice strategic innovation to reinvigorate themselves and get on the path to long-term growth. We have found a set of eight common practices that, when combined, build a sustainable strategic innovation capability. While it’s rare to see the full complement of practices in a single organization, many are working toward just that. In this article, we’ll explain what goes into each of the practices and how leading innovators are executing them.
Set Direction and Establish Commitment
Building a strategic innovation capability is a major undertaking.
Here is a direct link to the complete article.
Gina O’Connor is a professor of innovation management at Babson College. Christopher R. Meyer is a lecturer in the Department of Entrepreneurship and Innovation in the Zicklin School of Business at Baruch College, City University of New York.
References
1. M. Baghai, S. Coley, and D. White, “The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise” (Perseus Publishing, 1999).
2. D.A. Garvin and L.C. Levesque, “Meeting the Challenge of Corporate Entrepreneurship,” Harvard Business Review 84, no. 10 (October 2006): 102-112; R. Eagar, P. Webster, P. Kilefors, et al., “The Next Generation of Corporate Incubators,” Prism no. 2 (September 2019): 40-53; and “Why 60% of Corporate Accelerators Fail After 2 Years,” CBInsights, May 30, 2019, www.cbinsights.com.