Dears,
When I look around and see the
once great companies sliding and they hardly have nothing to sustain, it shows
how important is to keep up the Innovation quotient in an organization. The
inspiration for this article has come from an interesting hypothesis by name
Technology mudslide. What makes an individual or organization a great innovator?
If you are at Harvard, it’s not a single person that makes you better, it’s the
System. The innovation is a function of
a model which enables you to dream, imagine, feel excited and be passionate
about your idea. The organization failed to innovate when the people in the top
management distance themselves far away from Innovation (R&D). The top guns
should have a direct link to the people behind new ideas and innovation. Any
organization no matter how small or prosaic its business can make the
grassroots transformation if it really wants to. The best creating thinking
happens on a company’s front lines. The next level leaders are the Innovation
catalysts and the sphere around them watching them grow and achieve are the
Innovation Sponsors/Leaders.
There are 2 types of innovation
paths Sustained and Disruptive innovations. The sustained innovations are the
improvements to the current technology that continuous to improve the
service/product performance. Disruptive innovation is challenging the current service
/product performance and bound to create new uses, new markets and disrupts the
current technology. Today every organization requires continuous innovation to
survive.
Nokia has sold three million
units of its Lumina phone since October 2011. That may sound quite good, but over
the same period Apple sold over 72 million iPhones and Nokia is going through
its 4.9 billion euros cash mountain at a pretty scary pace. It blew 2.1 billion
euros over the last five quarters and few weeks back announced 10,000 job cuts,
but that may well be insufficient.
All is not lost. There is talk of
a new operating system called Tizen that involves Nokia technology that may
rival Android. But the truth is that Nokia suffers from what’s called
innovators’ dilemma. To put it in other terms, it is what Clayton M Christensen
called the “technology mudslide hypothesis.” In his model, established
companies in a position of market dominance reinforce their position of
strength through their specialization, but when a new so-called disruptive
technology emerges, they miss it. They get relegated to backwaters or go out of
business.
Christensen himself took the disc
drive industry as an example, and looked at every major change – for example
from 14 inch disk drives used for mainframes to 8 inch inches for
mini computers, 5.25 inches with the emergence of PCs and then 3.5 inch
as laptops were developed. He showed that with the emergence of a new disc
drive standard, there was a change in market leadership; previously dominant
players started doing impersonations.
What is especially interesting
about the Christensen study is that the companies themselves were often aware
of the danger, researched the new burgeoning technology, but their existent
client base showed no interest, urged them to stick to what they already knew.Nokia
faces in its own innovators’ dilemma, but so too do the other Industry giants.
After all, they do say that “mud
sticks” but for how long?
At its core of this hypothesis is
about how successful, well-led companies carefully pay attention to what
customers need. These same companies invest heavily in new technologies,
delivering more performance to those clients but will still lose their market
leadership suddenly.
This can happen when disruptive
technologies enter the arena. Most technologies improve the performance of
existing products in relation to the criteria which existing customers have
always used. These technologies are called sustaining technologies. Whereas,
disruptive technologies do something different. They create a completely new
value proposition. This will often entail worse product performance per se, but
improved product performance in relation to new criteria; for example:
- smaller ( handy )
- more user friendly (convergence of phones and video
streaming cameras)
- Cheaper (storage devices).
That is to say…
1. Customers and investors will
dictate their resource allocation; i.e. middle managers will tend not to invest
in technologies that are not directly appreciated by significant clients
because they will not be able to get the quick ROI that investors require.
2. Small markets cannot fulfill
the growth need of large companies. Bigger, more successful companies will look
at smaller niche and emerging markets (full of those early adopters and
pragmatists) as simply not large enough to fulfill growth requirements.
3. Markets that do not exist
cannot be analyzed. Well-governed businesses will discount such opportunities
for the risk of likely failure.
4. Technology supply does not
always equal the market demand. Due to its speed, technological progress often
overshoots customer demand. This opens the door to products today that
underperform the market, but which might meet customer demand tomorrow,
particularly when delivered as a new value proposition.
Success breeds failure & Innovation is the oxygen that keeps the
Organization growing.
Your P&C
DC*
