How to Overcome the "Inno" - Dilemma

The digital world has brought about lots and lots of hollow discussions on disruptive technology, creative destruction, management strategy, markets as conversations, losers, winners and finally good and bad.

These discussions have misled many a would be inventor, business student, investor or desperate management person inside an incumbent. It is important to not just know a bit of 3 to 4 concepts each, but to understand some fundamentals.

To understand for example, that good management and listening to customers is important but not a help in any case.

It is also important to understand the difference between disruptive and radical innovation.

V. Rao took the opportunity of the tenth anniversary of the publication of Mr. Clayton Christensen's influential book The Innovator’s Dilemma to give a good hint at how incumbent organizations, if they still have a nerve, can do anything at all.

How the dilemma comes together

Customers and investors are able to punish/reward companies to stay away from disruptive innovation because mature companies are structurally set up to feel the pain. (our bold)

That is what has massively been happening to the media industry in more than 1 way. With public TV it is the growing masses of seniors and their taste that bind the companies and discourage too much innovation.

With everybody it is the ad and promotion industry who still live in the 90ies and have near completely lost their feeling for today's style, patterns and methods. What they demand is nearly killing. And the media have not found a recipe to counter-act on this. They just feel the pains.

The European political elite who mostly still are in the 70ies and 80ies with their minds are a further weight. And all of these are serviced by the defensive managers this situation attracts.

How to Overcome the Dilemma

Christenson concludes that the only way for an incumbent to pursue a disruptive idea is to separate the new business completely from the culture, processes and market pressures of its old one. This was what worked for the IBM PC. I haven’t yet seen a counter-example to this principle yet.(our bold)

And indeed the creation of the original IBM PC is the foremost example for a successful innovation by an incumbent.

How Norwegian publishing house Shibsted Forlag (founded 1839) has handled the disruptive set of technologies commonly called the web so far seems to be another one.

There are also rules what you should and what you should not do:

• Separate the new business completely from the culture, processes and market pressures of the old one
• Do not, do not reintegrate too fast and too early
• After 1st success do not drive your innovators too hard
• Do not over- or underprivilege your innovators too much

Post Scriptum: As we have repeated so often before and at the risk of being crude we like to remind the p.t. audience one more time how important the creation of the IBM PC was to save the concept of personal affordable real computer, as invented and put into the world by Chuck Peddle, Bill Mensch, Frederico Faggin, Masatoshi Shima, Ed Roberts, Jack Tramiel, Steve Wozniak and others from the future grips of management and marketing. The credits for this have to go to Don Estridge and John Opel.