Breakthrough Innovation in big companies

I apparently startled my daughter when she spotted me online on Skype.

Christine

I figured she didn’t know what hit her when I told her I was working on my blog. This is quite a breakthrough for me. The team who’s supporting me on this convinced me that blogging is as easy as email.

I guess that’s what innovation is all about – making changes that improve the quality of life. But this blog isn’t just about innovation. It’s about our group’s research on how big, established, bureaucratic companies are struggling to develop real major, breakthrough, pathbreaking, gamechanging, radical innovation. Big innovation. Not the small stuff. Something beyond the next flavor, the next model, the next incremental change in a product. Whole new business opportunities based on technological leaps, combinations of technologies that have never been combinable before, or cool insights into new business models. Here’s to pathbreaking, trend-disruptive, radical innovation.

So why start this blog? Because of the 12 years of research we’ve been doing on the topic. Analyzing how established companies innovate, and what gets in the way. Also because it’s clear that innovation is becoming the newest business function in companies, much like marketing, quality, and finance have become functions in organizations over the past forty to fifty years. Companies are recognizing the need to develop an innovation capability that is sustained over time rather than a program du jour. They are struggling with how to do this because they don’t know how. Nevertheless, they’re focusing on the experiment and are investing heavily.

Our research program began in 1995 with a generous grant from the Sloan Foundation and the sponsorship of the Industrial Research Institute, a professional organization of R&D Managers, Directors and Chief Technology Officers of Fortune 1000 companies. The objective of phase I (which ran from 1995-2000) was to learn how breakthrough innovation (which we’ll refer to as BI) projects were managed in large, established companies. We believed that management processes that worked well for incremental innovation would kill off breakthroughs before they got out of the starting gate. We studied twelve projects in these ten companies over the course of five years:

These were projects that senior leadership in the companies identified as potential breakthroughs. Over the five years that we tracked them, some were killed off, as expected, and others met with varying degrees of success. Several changed the game in their industries.

The vast majority of projects we studied originated and progressed solely because of the strong will and persistence of a talented champion with ties to and protection from a senior management sponsor. Project teams and their leaders spent more time fighting against the norms of their companies, whose management systems, processes, and metrics were dedicated to efficiency, responding to market needs, and operational excellence. These were not the norms and infrastructure needed for the high-uncertainty environment of BI.

Companies can do a much better job of developing management systems and infrastructures that support, rather than antagonize, innovation champions and their teams. In 2000, they hadn’t figured out how. So we wrote a book about it: Radical Innovation: How Mature Firms Outsmart Upstarts. Companies should develop a supportive infrastructure for innovation, the book says. It’s called a breakthrough innovation hub. People who know how to coach innovation teams, people who go out and find great ideas, create partnerships, protect and guide innovation teams, interact with the mainstream organization regularly…that’s what a hub could do.

We saw the beginnings of an innovation hub in two of the companies we studied, but that was all. And both of those were snuffed out by the end of study period. Interesting, and discouraging.

So we kept studying. How do companies that want a sustained BI capability execute it? Is an innovation hub the right approach? What alternatives were being tried? Well, that study’s just been completed, and what we’ve learned form the basis for this blog. This blog is about building an innovation capability that will last. It’s about developing an innovation function. Companies are doing it. They’re getting there. It’s early yet, but it is happening.

Here are the companies we’ve been studying since about 2001: All of them had a declared strategic intent to develop or evolve a sustainable BI capability:

It’s amazing how much attention is being devoted to developing not just one random breakthrough, but an entire innovation capability…especially since the late 1990s.

We visited each company. Asked about all aspects of the management system for innovation. Met with the individual or board responsible for the BI capability development (we’ll call this person or team the hub leadership). Met with the individual or team to whom the hub leader reported. Met with the hub leader’s staff and, in some cases, team leaders of projects that were part of the breakthrough project portfolio.

Every six months for the next three years we checked in to see what was up. How were things going? What changes had they made? Why???? In all cases except one, we spoke with the company president or a senior vice president or a chief technology or chief strategy officer of the company.

Other companies started to contact us…they wanted to participate in our study. Intel called!!! So, we formed a second group comprising these firms that met at Rensselaer Polytechnic Institute’s Lally School of Management & Technology every six months for the duration of the study, and they debated a bunch of issues while we got to watch and learn. This group included

They are a wonderful set of participants, they’re all interested in furthering their own learning and that of the collective and larger innovation community, and we are honored to have had the opportunity to work with them.

So, welcome to our blog! We look forward to telling you what we’re seeing in the world of breakthrough innovation in established companies, and to hearing your experiences as well.

One response to “Breakthrough Innovation in big companies

  1. At the risk of being naive, it seems that every great innovation starts with or eventually involves “out of box” thinking which relates directly to challenging our mental models. This requires more than just having dialogue and brainstorming sessions. It necessitates constantly opening our minds up to unlimited possibilities and not allowing ourselves to pre judge our own thinking or other propositions. Indeed it would appear that the theory, tools, methods and practices of a learning organization would support and accelerate innovation. Within a BI team or any team for that matter, members must challenge assumptions, practice a balance of advocacy & inquiry and be aware of climbing down the ladder of inference. we must learn the value of public reflection, shared meaning joint planning and coordinated action (the wheel of learning from the Fifth Discipline Fieldbook). I’m wondering if research shows a correlation between Innovative organizations and Learning Organizations.

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