The Inside and Outside View of Innovation

Book description

How can companies ensure that a promising initiative receives the necessary resources when the core business dominates the organization? And why do so many brilliant inventions fail while other seemingly mediocre offerings succeed? Such fundamental questions are addressed in two recent books by innovation scholars — Unrelenting Innovation: How to Build a Culture for Market Dominance, by Gerard J. Tellis (San Francisco, California: Jossey-Bass, 2013), and The Wide Lens: A New Strategy for Innovation, by Ron Adner (New York: Portfolio/Penguin, 2012). The two books make an interesting pairing: The first concentrates on a company’s internal workings, while the latter focuses on its external environment. In Unrelenting Innovation, Tellis asserts that the single most important driver of innovation in any organization is its culture, and he cites three organizational traits important for innovation: a willingness to cannibalize existing products, a risk-taking attitude and the ability to focus on the future. Those traits, he contends, are especially difficult to maintain in successful companies because of various human tendencies and biases. In particular, Tellis notes, many companies have a hard time commercializing radical innovations because these would hurt the company’s existing products. To counter such tendencies, Tellis offers three important practices: providing the right incentives, fostering internal markets and empowering “innovation champions” within the organization. The overarching theme of The Wide Lens is that many products do not succeed or fail by themselves. Instead, their fates are ultimately determined by the support they receive from external parties. “The light bulb on its own,” writes Adner, “was a miraculous invention but needed the development of the electric power network to turn it into a profitable innovation.” Because external support is crucial, executives need a very broad perspective — “the wide lens” in the book title — to ensure that their innovations become commercial successes. Adner is able to deconstruct a company’s external environment to look specifically at two types of important parties: those needed to develop complementary products or services (co-innovation) and those needed to adopt an innovation before the end customer can fully appreciate its value (the adoption chain).