Big Companies in Innovation Mode!!!

We’re back! What a lengthy absence from the blog scene, so we apologize to our innovation enthusiasts out there. It’s been a long, and jammed semester, but all that’s over for now.

So The New York Times has written a piece lately, Who Says Innovation Belongs to the Small that recognizes the power of large established firms to develop and commercialize breakthrough innovations. Welcome to our world! They are reporting on Clay Christensen’s recent book on Health care systems and how to fix them. Now mind you, Prof Christensen is the one who’s always maintained that large firms are least likely to innovate for the well know reasons, and that radical disruptions arise from start ups.

You know, it just isn’t necessarily the case. So the NYT article states: Big companies like General Electric I.B.M that employ scientists in many disciplines typically have the skills and scale to tackle such projects. Their advantage is in “being able to integrate innovations across these complex systems,” said James E. Spohrer, a scientist at I.B.M.’s Almaden Research Center in San Jose, Calif.

Technology trends also contribute to the rising role of large companies.The lone inventor will never be extinct, but W. Brian Arthur, an economist at the Palo Alto Research Center,says that as digital technology evolves, step-by-step innovations are less important than linking all the sensors, software and data centers in systems.”

It’s true that big companies can be the integrators, but also, due to their vast reservoirs of knowledge and flexible internal networks, they can learn and leverage new information quickly.And the many disciplines present in industrial R&D groups are the key advantage of seeing novel opportunities, which ALWAYS arise from the points of intersection of disciplines.

So why haven’t we known this????? Why has Christensen’s initial message prevailed for nearly 15 years????

Because large companies have the potential…but have not executed on this well. And they can and need to be MORE than integrators on complex problems, which is the focus of the NYT article . They need to build management systems for breakthrough innovation. The ONLY way to do this is to make innovation a business function, just like marketing is, or R&D is, or accounting is.

Large companies have lots to learn in this regard, but the train is leaving the station. Many are tuning in to this message. I’ve given talks at two recent meetings of the Industrial Research Institute…once in March and one just last week. Standing room only. All of those member firms are ready, so they say. They’re frustrated at the rich discovery opportunities they have, but at the very difficult challenges they face in articulating opportunities in a manner that will get senior leaders’ attention, and then at incubating them into businesses. So we’re starting a forum on Breakthrough Innovation. We’ll be meeting regularly to discuss. They’ve asked our team to facilitate the forum. We look forward to sharing our knowledge, to learning from them as they go forward.

We’re also running our Innovation & Corporate Entrepreneurship (I&CE) program here at RPIto help these companies learn how to build a management system for breakthrough innovation. Come one, come all!

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