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Saturday, October 13, 2012

Why Big Companies Can't Innovate - Maxwell Wessel - Harvard Business Review

Why Big Companies Can't Innovate - Maxwell Wessel - Harvard Business Review:


Quote:">For those who would admonish Gerber for their approach to transformational innovation, it might be wise to consider that the company did exactly what it was designed to do: create operational efficiency. This deeply-rooted tendency goes all the way back to a corporation's typical life cycle. In it's infancy, it's designed to bring innovation to the market. A start-up's success is not gauged by earnings or quarterly reports; it's measured by how well it identifies a problem in the market and matches it to a solution. If venture capitalists think entrepreneurs have identified a big problem with an interesting solution, they'll fund the start-up. If those entrepreneurs match and improve this solution, they'll see growth in revenues and, ultimately, profitability.

">But that's not what life is like within a mature organization. When corporations reach maturity, the measure of success is very different: it's profit."

I took issue with one of the comments complimenting Apple for being innovative: Where Apple shines is in marketing, not innovation. The original iPod mp3 player was a redesign (copy) of existing players. One might argue the linkage to the iTunes store was innovative, but here again others had already done something similar. From there, each generation has been a refinement of the previous one. The iTouch is an iPod with a touch screen; the iPhone is an iTouch that can make calls, the iPad is merely a large iTouch except it can't make calls. Even their OS is a refinement of Unix. The Newton *was* innovative, but it failed. What companies need is to generously fund R&D, pure research, and then have the guts to recognize and support products that might be very different from their original products. Post-it notes benefited from a researcher who recognized the value in his mistake, but the company was already in the business of selling stuff that sticks so it wasn't too far a leap.
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