Recently I was conducting a training on innovation at a client and was bombarded with questions about how to create innovations in an established business. These were important questions which many people share. In his book, The Innovator’s Dilemma, Clayton Christensen identifies the paradox of an established business, that it doesn’t have incentives to disrupt itself. The innovation that is born in this paradoxical world is Sustaining Innovation, which is good for short term health, but can be deadly for the long term viability of an industry or business. Just ask Kodak or MCI what happens if you don’t tend to both your present and future. A business needs Disruptive Innovation too for the long haul. How do you do it? How can an established business innovate for today and tomorrow?
In my experience, to get both Sustaining and Disruptive Innovation pipelines, you need to design organizations for each. The old adage “you get what you measure” is alive here. Sustaining accountabilities drive sustaining innovation and disruptive accountabilities drive disruptive innovation. What specific accountabilities matter for your industry may be unique but you can be certain that they are different for sustaining and disruptive innovation. Have you ever thought about this?
Structure flows from this difference as the existing organization is well crafted for innovating in the current market on current benefit spaces; it is a Sustaining Innovation ecosystem. To go beyond this, however, you need to set up a separate structure, divorced of the current demands of the business and held to accountabilities that drive disruptive thinking. One organization I know has their disruptive innovation arm measure the % of time they fail (and they have a goal to fail over 50% of the time) because if they aren’t failing they are not stretching. Imagine! Having a goal to stretch and fail. You’d never want this as a metric for Sustaining Innovation but I can see how it helps push people searching for the disruption.
Yes, you need a separate structure that supports the unique accountabilities for Disruptive Innovation. For some businesses, they accomplish their disruptive structure through acquisition or through JV/partnerships. Whether the disruptive team is within your company structure or through another creative approach matters less than being clear on its unique accountabilities and requirements. In my experience, anything less is a sure way to only delivering Sustaining Innovation.