Dealing with discontinuous innovation

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Dealing with discontinuous innovation

• John BessantAIM Senior Fellow and Imperial
  College

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The innovation imperative ...
New response needed
Low uncertainty
High uncertainty
Old response appropriate
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A strategic challenge ..

• To the organization a survival/ growth
  imperative
• To innovation leadership
• Direction exploring the innovation space
• Philosophy models and understanding which shape
  action
• Execution creating enabling conditions
• A moving target constant review and learning
• Innovation as dynamic capability

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Thinking about innovation
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Invention is not enough
Musical flamethrower
Gas-filled umbrella
Decoy ducks stay dry!
Cheese-flavoured cigarette
Foetus Walkman
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Understanding innovation
How we think about something.
shapes the way we manage it
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Partial models of innovation
Innovation invention
Star turns
Knowledge push
Single enterprises
Product innovation
Radical change
Manufacturing
High technology
Market led
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An emergent good practice model
Pro-active linkages
Innovation Strategy
Learn?
Innovative organization
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Learning isnt easy .
Here is Edward Bear, coming downstairs now,
bump, bump, bump, on the back of his head, behind
Christopher Robin. It is, as far as he knows,
the only way of coming downstairs, but
sometimes he feels that there really is
another way, if only he could stop bumping for a
moment and think of it .
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Exploring innovation space
Paradigm ( mental model)
Innovation
Process
Product
Incremental ---? Radical
Position
example
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A successful innovator?

• Medproducts Danish medical devices producer
• Dominant market position, multiple award winner
  for innovation
• Founded 1957, close user/producer synergy
• Developed deep competencies around skin/wound
  care
• Developed close market linkages user active
  paradigm e.g. nurses panels
• Developed robust innovation management routines -
  e.g. AIM process
• What do they do on Monday morning? More of the
  same?

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More of the same may not be enough ..

• 'people get all these good ideas but there's
  nowhere to take them ...'
• 'it's so structured there's no real room for
  radical ideas'
• I think we do too little for the radical side -
  but were too busy'
• ''out of the box' - the words are there but
  there is no commitment
• 'the improvements have just been minor things in
  the past few years - not so big innovations' ...
  it's a long time since we have had a real
  innovation, a new concept'.

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Concerns

• 'because it's all focused on this well-oiled
  machine there are no resources for the radical
  ideas'
• 'there should be a forum where it's allowed to
  have new ideas and it should be supported where
  there is money to run with these good new
  ideas..'
• 'many new ideas would be killed off because
  they are not big enough'
• 'people aren't taken enough out of their daily
  work to think differently'
• because product development is so structured
  there's no real room for radical ideas, no 'let's
  try this', no way to run with it outside the
  structures'

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Is there a problem?

• smart firms stumble and fall
• e.g. disruptive innovation (Christensen)
• e.g.technology dispossession
• e.g.unlearning, cognitive dissonance
• problem of discontinuous conditions
• steady state capability is not enough

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Sources of discontinuity
Ice, valves, photos, light sources
New technology emerges
Disk drives, mini mills, excavators, SMS
New market emerges
Centrally planned, apartheid, trade liberalisation
Political regime
Medproducts, Kodak, Preussag
Running out of road
Music industry, green products, health issues
(smoking, obesity, etc)
Sea change in social attitudes/ behaviour
Telecoms, utilities
Regulatory regime changes
Low cost airlines, internet services
New business models
9/11
Unthinkable events
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Steady state vs. discontinuous innovation
strategies
Degree of uncertainty
Uncover
Co-evolve
Exploit
Flex
Degree of instability
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We need two types of innovation organization
Type 2 Discontinuous
Degree of uncertainty
Type 1 Steady state
Degree of instability
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Two innovation organizations
Type 2
Type 1
No clear rules these emerge over time. High
tolerance for ambiguity
Clear and accepted set of rules of the game
Path independent, emergent, probe and learn
Strategies path dependent
Fuzzy, emergent selection environment
Clear selection environment
Risk taking, multiple parallel bets, tolerance of
(fast) failure
Selection and resource allocation linked to clear
trajectories and criteria for fit
Operating patterns emergent and fuzzy
Operating routines refined and stable
Weak ties and peripheral vision important
Strong ties and knowledge flows along clear
channels
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Emerging routines for managing DI
Pro-active linkages
Innovation Strategy
Learn?
Innovative organization
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Triggering the process

• Looking beyond the lamp-post
• Develop peripheral vision
• Targeted hunting alternative futures
• Extend selection environment weak ties matter
• Extensive networking with redundancy
• Harness internal innovation potential
• Pick up/ work with fringes
• Pattern recognition use power tools like grid
  computing to amplify weak signals

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Strategic selection

• Fuzzier front end
• Extend play time the new toolkit of Think,
  Play, Do
• Parallel selection and exploration processes
• Alternative criteria for business case lite
  options
• De-centralise seed funding

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Implementation

• Co-evolution working with users and others
• Crossing the chasm new diffusion theory
• Skunk works, CVs and other development routes
• Build flexible project management structures
  probe and learn rather than risk management
• Pre-skilled teams hit the ground running and
  high creativity
• Postpone the freeze think, play, do toolkit

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Innovation strategy

• Developing capacity to reframe the business
• Thinking the unthinkable unlearning
• Exploring alternative futures
• Building capacity for ambiguity/ multiple
  parallel strategies

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Innovative organization

• High involvement innovation
• Incentives and structures for intrapreneurship
• Cross-boundary working and knowledge flows
• Build a culture which supports and encourages
  diversity and curiosity-driven behaviour.

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Pro-active linkages

• Rich networking across innovation systems
• Open innovation models
• Strong and weak ties
• Strategic dalliances as well as alliances

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Learning

• the humble organization
• Failure is an option provided its fast!
• Build diversity to enhance absorptive capacity
• Learning across sectors

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Innovators
Ray Ewry (1873-1937) Olympic Games, London,
1908 World record 1,98
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Innovators
Mildred McDaniel (1933) Olympic Games,
Melbourne, 1956 World Record 2,15
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Innovators
Richard Fosbury (1947), Olympic Games, Mexico,
1968 World Record 2,24 m
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Radical process innovation
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The prices and weight of all goods are all
clearly marked. You just take what you want.
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Position innovation
1927
2005