Successful Innovation:
The Intersection of Theory and Practice

  • Conversation Summary

Faculty Response (11 December 2007)

Breaking the Business Model Straight jacket
Corporate innovators often see opportunities in the market that aren't a good fit with their employer's business model — and as a result, the system rejects the innovation. If the corporate entrepreneur is persistent in pursuing funding, typically he must morph his idea and its business plan to fit his company's business model, rather than fitting the need in the market. If these statements are true it means that companies are incapable of successfully innovating outside the boundaries of their current business models. How do you solve this problem?

Securing Funding for Innovative Products
Most companies' systems for approving funds for proposed innovations require that financial projections be made. Credible numbers often can be projected for incremental improvements to products that already are in the market. But financial projections for truly innovative products are almost always a complete guess. If innovators fabricate aggressive projections in order to win funding, and then fall short of their projections, their projects often get terminated. Is there a better way to win funding for innovations whose sales can't credibly be forecast?

Original Questions

"There is lots of statistical evidence that other than incremental improvements, successful innovation is almost a random process - a few succeed; most fail; and even the best managers and investors have a hard time picking the winners in advance. As a consequence, much of what has been written about managing innovation focuses on managing unpredictability. Fail fast. Let a thousand flowers bloom. Venture capitalists have structured their work to account for the reality that 80% of the ventures they fund will not be commercially successful."

Do you think that successful innovation really is intrinsically random? Or is the problem that management researchers and authors just haven't yet given us good theory that managers can draw upon to accurately predict what will succeed, and what will fail?

"The intersection of theory and practice is a turbulent zone to travel through. Theoreticians watch the behavior of corporate leaders and shake their heads at the continued failure to apply the lessons from the past. Practitioners look at the theorists and sing the refrain, "But you have never had to make the quarter." But in that turbulence lies the opportunity to improve theory with the close examination of practice, and to improve business outcomes with the discerning application of better theories."

How do you reconcile the challenges of context setting from the top of an organization with the discovery and learning processes that happen on the front lines at the bottom? Does this doom larger firms to inflexibility and a slowness to adapt that will hobble and disadvantage them?

Your Comments

  • Karen Nevins
    CRM Manager
    Ropes & Gray

    The question(s): "Do you think that successful innovation really is intrinsically random? Or is the problem that management researchers and authors just haven't yet given us good theory that managers can draw upon to accurately predict what will succeed, and what will fail?"

    My answer: I definitely do not think that successful innovation is intrinsincally random. Perhaps the only thing is that is intrinsically random is the hunger/thirst for knowledge, and the ability to collect, analyze and synthesize the data to drive innovation.

    I believe that true innovators are not omniscient foretellers of the future, but rather are people who are very observant, perceptive and know how the ask the right questions. Innovators tend to be very keen in their ability to interpret the data and know what to listen to and what to ignore. I think innovators rely heavily on their gut instincts when interpreting data (which is, again, not to say that they can "predict the future", but rather they know how to use past experiences to help guide their thinking when sythesizing the data.

    In essence, innovators are not predictors of the future --they simply know how to follow the path on which the data is leading them. As I always say: The path to gold always lies in the data, dummy!

  • Peyman Dayyani

    Do you think that successful innovation really is intrinsically random? Or is the problem that management researchers and authors just haven't yet given us good theory that managers can draw upon to accurately predict what will succeed, and what will fail?

    Innovation is a term which has been used in various context and topics and has created more harm than goods in confusion of various academic disciplines.

    In my view innovation is one stage of a path which starts from realization to creation. Realization -> improvement -> invention/discovery, ->innovation, -> creation

    This process takes place in environment that is freed; resourced, nurtured and tolerated depending mastery of mix of this recipe the outcome can be expected in various stages of that path of creation.

    In addition to environment setting, ingredients of individual played a role as well in this path of creation. Knowledge, wisdom, desire, passion, intelligent, imagination, and courage are some of ingratiates that people who make this journey need to have.

    The last world to tie the above statement is that random as well of metaphysics and all other possible causes are existed in our world but none worked against the natural laws and principle. Our knowledge today is a tip of iceberg of world's order and the easiest way out is to label our weakness as intrinsically random.

  • Paul Johnson

    It is hard to predict how consumers will react to new products or services. GE some years ago developed a light bulb that would last 10 years--it didn't sell, although the need for a 10-year bulb has been around since the first light bulb was developed.

    I don't think you can accurately predict what will succeed or fail. Innovation is like sailing uncharted waters: the first person who goes out will have to draw the map for those who follow.

  • Fernando J. Accini
    Executive Education Participant
    Systems Director
    Papelesa

    I think that successful innovation is random at the beginning, but at the end, flexibility and perseverance are essential. Ready-aim-fire is the reasonable way, but innovation leaders usually prefer ready-fire-aim.

    Let me give you an example. I knew a company built to process tomatoes. It failed. The owner changed the business to process petits pois, and it succeeded. He then built a factory to process frozen petits pois, and it was a bad decision. He changed to produce frozen melon balls.

    Innovation is not fast success. It's a good idea that should be changed and adapted on its way to become a successful reality.

  • ranganath bs
    Executive Education Participant
    vice-president
    radico khaitan limited

    Marketing strategy with global perspective!

  • Bharatesh Kalasur
    MBA Student 2007
    Project Leader
    Ingersoll Rand

    Dynamic forces of any business can be resolved with systematic Innovation Process like TRIZ.

  • Jim Goggin
    Alumnus ISMP4 - 1975
    President
    Justax

    From my own experience and observation, it appears to me that innovation is intrinsically random. Many innovations are not initially recognized as innovation and it takes time for them to reach their potential.
    It is often the good judgement and experience of professional managers that brings the innovation to to a commercial reality.

  • Anne Kathrine

    Innovation is for many managers a huge challenge. However - instead of thinking "huge" obstacles and challenges - think small steps towards success based on a vision and closed loop strategy. Analyse what you've already got - Find the gaps where you can change and make a difference.

  • Vern Loewen
    CEO
    LCG - Loewen Consulting Group

    I found the following very useful: Rosabeth Moss Kanter's article, "Innovation - The Classic Traps."

  • Ahmed Y ISSA
    GM-KEY ACCOUNTS,GCC
    Aujan Industries Co.

    The front line managers and the senior executives often do not read the same page. Executives are into theoreticians' ideas, while implementing those ideas and how practical they are is totally a different scenario altogether.The gap has to be identified before going ahead. That is why many smart innovative ideas fail or take longer than they should. I would suggest, before theories are announced, the executives who come through the ranks and know how the front line managers think and act to fine-tune the theory. I do not believe anything happens at random.

  • Abdallah Hussein
    Senior Operations and Marketing Manager
    Coca-Cola Company

    Great forum. Innovation is not necessarily based on research. Intrinsics plays a key role in solving pertinent issues. Common sense plays a role in putting things together to arrive to get practical solutions.

  • Swaroop Diwakar
    MD
    Digital Warehouse

    In my opinion, successful innovation is intrinsically random but moves forward with time. In the process it should not be like reinventing the wheel. Innovation can be used as a case study, but actual implementation should be based on current challenges.

    In executive management, successful innovation flows on the basis of theories, while on the implementation side many gaps need to be plugged, requiring a scenario and vision for the future.

    Things do not happen on their own, either directly or indirectly. Platforms are set up to create or reap the results. To anyone else this may appear random.

  • Cesar Castro
    Chief Strategy Officer
    AccelusHealth

    Innovation is not necessarily random, in my opinion. The 'randomness' of innovation comes from the fact that ideas or solutions can come from the most unlikely of places, and that gives the impression of a random result. What really needs fixing is how we continue to use traditional approaches in innovation. These approaches worked well 70 years ago but not in today's more global, flat, and open world. Companies need to go beyond the boundaries of the firm, and individuals need to think of themselves as solution finders (as opposed to problem solves) in order for innovation to thrive.

  • Shekhar Yadav
    Director, Technology/Innovation
    Strongmail Systems Inc

    Are there any metrics that can be applied to innovation like innovation speed, innovation frontiers, etc.? So that even if we cannot predict innovation, we can at least measure the innovation and know if we should deploy more resources or energy on the process?

  • Mary Robertson Lacroix
    Manager
    Innovative Rural Communities Project

    Do you think there are specific barriers to innovation for businesses and organizations located in rural communities?

  • Adam Hartung
    Managing Partner
    Spark Partners

    Too many managers spend too much time trying to plan both innovation and the marketplace. The former may be possible, the latter is not. While venture capitalists can play the roulette wheel with many small innovations, corporations need to invest in fewer innovations and after the marketplace is proven. It is not ideas that corporations need, but viable high growth businesses that demonstrate early success in high growth environments. After investing in newly proven innovations, corporations need to let these businesses develop outside the normal corporate constraints in order to flourish - while simultaneously having their feet held to the fire of results, growing revenue along with, or faster than, the marketplace. Too many corporate innovation leaders reduce market inputs, attempting to "drive" innovation. Successful innovation requires the marketplace, not executives, direct investments and behavior.

  • Selcuk Akgul
    Lecturer
    Universitek

    Innovation is a gift but it may or may not bring about success. I believe that someone having innovated once will be able to do it repeatedly, as well. Given the training, innovators can achieve success in their fields. Innovation can and should be managed as hard work. Originality and distinctive competence are required to innovate, and only privileged ones are entitled to it. In this context, courses of innovation management and entrepreneurship should be encouraged.

  • Terry Scmidt
    Alumnus/a MBA 71
    Founder
    www.ManagementPro.com

    How do you reconcile the challenges of context setting from the top of an organization with the discovery and learning processes that happen on the front lines at the bottom? Great question. Be willing to embrace the paradox, tolerate smart mistakes, be values and principles based rather than rules based. Do your best to get it right, then relax and let the universe decide. And keep a lucky penny in your pocket.

  • Andrew Campbell
    Alumnus/a 1978
    Director
    Ashridge Business School

    Do you think that successful innovation really is intrinsically random?

    Well it depends. Some innovations are blinding obvious once the idea has been formulated. Everyone knew that internet banking and online trading were going to be big businesses. But no one would have predicted that the Prudential would create the most successful UK online bank.

    Other innovations such as satellite telephony are much more uncertain.

    What we need is a way of grading innovation that distinguishes between internet banking and satellite telephony and between the Prudential and Barclays Bank as innovation challenges with very different uncertainties.

    Clayton Christensen's distinction between disruptive and non-disruptive innovation is helpful. Disruptive innovation has a much higher failure rate. We should also distinguish between "new to the world" and "new to us" innovation. A further distinction should be between "success for someone" versus "success for us".

    My own grading system for new businesses - The New Businesses Traffic Lights - provides a start. But the concept could be expanded to include any kind of innovation from business process reengineering to high tech new businesses.

    The lack of specificity in the question demonstrates how far we have to go in this area. We clearly lack good theory.

  • Steve Kloeblen
    Alumnus TGMP 17
    Vice President Business Development - New Growth Platforms
    IBM

    I agree that innovation is a process that requires a unique management approach in order to reach the required scale and then to really figue out what will work.

    From my perspective: a combination of casting the broadest net on a well defined market need, and then cheaply and rapidly testing and tweaking solutions in the market with clients. So the trick here is to not to harden things and allow constructive failure to occur.

    I think Willy's question is the most challenging, in gaining organization alignment. One area that has interested me as a design here is using opportunities that align with the core values and subjects that your employees and clients are passionate about. That informal (or formal) values based management system provides a better set of guard-rails than the traditional hardened - budgetary - organizationally aligned management system that you would use for more mature businesses.

    That's not to say you don't apply a very sharp eye, but it is more in a development/creation driven approach with the hearts and minds of the organization rallying behind the area you are pursuing. The mature "formal" management system that sometimes thwarts innovation is suborned by the passion of the team.

  • Lana Newishy
    Alumna MBA 2002
    International Lending
    American Express

    In my opinion, there are generally two kinds of factors behind the success or failure of innovations: Controllable elements and intrinsic ones. Only 50% of the elements are controllable, leaving the remainder under the mercy of consumer preferences, market conditions, and the dynamics resulting from other innovations, all of which can also be referred to by some as "luck" or as "randomness." Get your controllable 50% right - an already challenging task - and you're only halfway there.

  • W. F. Samuel Hopmeier
    Alumnus MBA '60
    Retired

    First: Why can't we print out the entire Conversation so we can study other's comments away from the computer?

    I am involved in a venture mentoring service in St. Louis, MO and am very interested in this subject so we can determine if, in fact, it is predictable, where to concentrate our efforts.

    I think a big part of the success of innovation depends on the determination and commitment of the innovator.

  • Dr Akash Rajpal
    Sr Manager Medical Services
    Dr L H Hiranandani Hospital, Mumbai, India

    Do you think that successful innovation really is intrinsically random? Or is the problem that management researchers and authors just haven't yet given us good theory that managers can draw upon to accurately predict what will succeed, and what will fail?

    I somewhat agree with Fernando J. Accini (Systems Director Papelesa) where he says that any innovation is random to begin with, and it's the flexibility and perseverance in the end which will keep you going.

    But in my viewpoint if an innovation fails or if a venture fails it does not mean that the theory is deficient or that the management gurus did not preach the right thing. I feel if a business fails it is only the innovator, the initiator, who is at fault. He must not have done the research right. Otherwise why would certain innovations conceived with a particular outcome hit the bulls eye? I think a lot of appropriate knowledge exists. It's just how one absorbs it and applies it for a controlled outcome.

    And yes, I completely agree with Abdallah Hussein, Senior Operations and Marketing Manager of Coca-Cola Company. Common sense is above all, and plays a role in putting things together to arrive at practical solutions.

  • Ramon Prat
    Partner
    Madimon

    With the development of good theories, the complexity of business decisions seems to decrease and processes and outcomes seem to be more under control.

  • Ian Stewart
    Senior Lecturer
    Technology Innovation Centre, Birmingham City University

    Innovation is not random in terms of etiology, it is only the discourse around which contradictingly makes it seem so unusual, exceptional and desirable - and yet managable by process models - therefore best handled by 'innovation centres' working on 'innovation projects' using 'innovation pipelines' etc... However, in organisations, I have found people have the ideas which are the seeds of innovation as a consequence of their routine practice, but when they meet with the established, historically constructed perceptions of what/who is innovative, their ideas potential will probably be ignored, whilst other more exceptional ideas from approved sources will be promoted. The negative personal outcome and the observed mediocre outcomes set the motivational basis for the next idea they have - which will almost certainly not get as far as 'innovation'. A sad picture, but I don't think I'm wrong.

  • Alex Maddox
    Executive Education Participant 2007
    Managing Director
    Telmar

    The mistake that many people make is to look at what others are doing. The secret is to decide to be excellent and inventive and not do what others are doing. If you do the same you get the same results.

  • carlos juarez
    consultant
    tv ofertas

    As we know, it is very important and crucial for consultants to make the general directors of enterprises see that we support solutions based on a theoretical element. There is where the consultant has the ability to implement theory with practice.

  • Carlos Lagemann
    Executive Education Participant 2005
    CEO, Leader, Founder & Disruptor Innovations
    OO.LA The Miracle Up Search| www.oo.la

    Innovations are in all places. And there exist many ways to create a good theory, but maybe the authors have to be innovative :-)

    I think another good question should be: "What are the success strategies that innovative corporations have adopted to capture innovations?"

    Marketing areas have many plans. How many plans has your Innovation area?

    As an example, I quote two cases.

    BAD CASE: At one of the largest software companies, executives who have to be addressed with innovative proposals do not know what behavior to adopt or how to direct the process in a constructive manner. This has lost many opportunities passively.

    GOOD CASE: An internet company has done NDA contracts with people who are the main points of reference and convergence of particular subject information. They are hunters of innovations, super strategic, and proactive on time.

    A good innovation theory should refer to three different moments of an organization: CONSCIOUSNESS, STRATEGIC PROCEDURES, and PRACTICAL RESULTS.

  • henry kwok
    global partner
    hcsm

    an interesting conversation.

    there is no way we can dispute all the observations made above. they represent part of the reality in some form or shape.

    i would like to put things from a different perspective - to make it more confusing?

    when we talk about innovation, i cannot think of any better example than those masterpieces of art by the great artists of the past. The way we now paint and express ourselves might have changed but many of these masterpieces still capture our imagination and have stood the test of time.

    we, as an observer, admire the creativity of the masters. we think it must be the inspiration of the moment that makes the artists capture the subject from a certain angle to send that visual impact that arouse our attention.

    if we look at from the master's viewpoint, they became good not overnight. they spend hours practising to hone in their skills. they do not become talented overnight. even in their masterpieces, x-rays show initial drafts/sketches and the artists modified and improved on them as they added the finishing touches. yes we cannot rule out the need for inspiration and the source of this can be random - but they knew how to present a subject in a fresh and novel - or should i say innovative - way. they still followed some basic rules.

    they are good because they work on it. if we look at companies which are successfully innovative, they have a record of being good at it. yes some companies became overnight successes because of an innovative product but in the long run how sustainable are they?

    we like the drama of a breakthrough. we only see the event but we forgot to look at the little things that need to be done before that. i often have to remind myself not to look at the last blow of the hammer that the stone cutter did to break the stone. i must also remember to look at the 99 blows he did beforehand!

    i hope i have captured all the thoughts that had been shared above.

  • Dave Siefert
    CEO
    Innovation Labs

    As an inventor and innovator, I have found that invention and innovation is able to be achieved both in random manner and intentionally. I am routinely asked how I do "it?" The "it" is not just inventing but is innovating the invention such that pragmatic wealth generation results for the person and/or the entity. I have concluded now that "my way" is able to be understood, taught, and ultimately repeated - with predictable results. Seridipidious or randomly generated successful innovation also occurs with eureka-like experiences. But in the end, even those results are able to be understood and repeated.

  • David
    Innovation
    TBC

    When a company decides to incorporate innovation into its strategy, it possibly does so with the intention of bringing "new to the world" or radical innovations to market. This is a journey, and it forces the business to understand insights, research more and look at what they are currently doing in more detail. This can lead to a lot of "new to us" innovations which add tremendous value to the business and should support its drive for the radical. The trick has got to be to ensure that the processes are in place to get "new to us" innovations implemented quickly, side-stepping bureaucracy. Building this culture will encourage more ideas from more places within the business - a virtuous cycle that MAY one day result in radical innovation!

  • Val Samonis
    Faculty Member
    The Web Professor of Global Management (SM)
    Hawaii Pacific U; and SEMI Online

    I appears that it is a random event having in mind all the literature, case studies, etc. I participated in a couple of EU attempts at jumpstarting innovation, leading towards wider applicability of innovations, etc, but the results are unclear at best.

  • Anonymous

    Clearly the answer to the second of Prof. Christensen's questions is Yes. The never-ending stream of new books on how to innovate suggests that no existing theory has any popular claim to being the "truth" of the matter. Moreover the responses on this page indicate that no current theory on how to innovate commands a significant following, or it would be obvious by now how to systematically generate innovations.

    So the first question remains. It's of a generic kind, asking how one determines whether any event (such as innovation) occurs randomly, or in response to some unseen laws. There must be some kind of scientific answer to this. Researchers spend years looking for the causes of everything from aggression to artistic talent. What makes them think in the first place that some law is at work, waiting to be discovered? Particularly with respect to something as complex as human behaviour.

    Is there some overarching theory of the world that says that everything happens for a reason? Or does randomness just happen?

    The human desire to control outcomes has a history of sending people on quixotic searches of all kinds. I wonder whether many topics in business (such as innovation or what makes a great CEO) are well intentioned, but unlikely to succeed. I don't know how we will ever know, but it seems we ought to keep on trying.

  • Umesh Gupta
    Additional General Manager
    BHEL, India

    Definitely successful innovation really is intrinsically random but it won't happen unless environmental conditions are favourable. We may not recognise "the environment" or what we may call "a favourable or hostile environment". For any seed to sprout, a particular type of environment is needed and when innovation happens we may call it intrinsically random without realising that we have provided a much-needed environment. But in the language of common man it is intrinsically random as it may be difficult to replicate again.

  • Graham Horton
    Entrepreneur and Professor
    Zephram GbR and Magdeburg University

    Successful innovation is not intrinsically random. If it were, then Professor Christensen would be out of a job!

    Consider the following two situations: - The result of rolling a dice - The success of an innovation project

    Rolling a dice is random, since you can neither predict the outcome a priori, nor can you explain a posteriori why the dice came up with the result that it did.

    On the other hand, while you might not always be able to predict the commercial success of an innovation project, you can very often explain its success (or failure) with hindsight. (Which Professor Christensen does in his books.) It can therefore hardly be considered to be random.

    I think the question is ill-posed. It should perhaps read, "is the commercial success of an innovation project predictable?" or something similar. My answer to that question is, "It depends". Some innovations will almost certainly be successful, for others it will be unclear. As with any kind of prediction, it depends (amongst other things) on the amount of relevant knowledge available, the degree of understanding of the factors involved and the time frame.

    So perhaps an even better question might be, "Is the commercial success of a proposed disruptive innovation predictable?"

  • Alexandros Konstadinidis
    Alumnus 1986
    Strategy Consultant

    How do you reconcile the challenges of context setting from the top of an organization with the discovery and learning processes that happen on the front lines at the bottom? Does this doom larger firms to inflexibility and a slowness to adapt that will hobble and disadvantage them?

    Innovation can be divided into two types:

    a) Innovation that improves execution of an established strategy.

    b) Innovation that indicates a new strategic space.

    E.g. Southwest Airlines' elimination of baggage transfer and seat reservations were innovations driving higher utilization of airplanes, a key success factor of the airline's low cost strategy.

    On the other hand, DELL's experimentation with direct marketing of PCs indicated a promising new strategic space: A low cost strategy founded on elimination fo distribution channels.

    Barriers to the innovation in the context of an established strategy are: a) Emphasis on short term results to the detriment of strategic execution, b) Disconnect between the strategy and the organization, c) Absence of teamwork and innovation culture.

    Drivers faciliating innovation in the context of an established strategy are: a) Fostering a culture emphasizing strategy, teamwork and innovation, b) Translation of strategy into operational terms and wide communication of strategy, c) Cascading and linkage of strategy with goals and compensation across the organization. E.g. in Mobil North America, this method implemented during the nineties resulted in innovations on multiple fronts, culminating in a dramatic turnaround.

    Barriers to organization innovation leading to new strategies are: a) Perception and Value gaps. New strategies often come along with assumptions and values that do not fit with the established mental models and values of the organization. Thus persuading on the validity of new strategies is an uphill struggle. b) Conflicts of interests, as the new strategy is possibly detrimental to the interests of internal or external actors. E.g. Compaq was unable to imitate Dell's successful strategy in part because of the strong reactions of its all-important distribution channel partners. c) Lack of organizational accountability on the theme of strategic innovation. Organizations are mainly execution oriented (and perhaps rightly so).

    Drivers facilitating strategic innovation are: a) A culture --especially in the top echelons of the organization --fostering exploration of new strategic spaces and innovation at the strategic level. b) Communication channels and analytical capability that bring forward "weak signals" indicating new strategic spaces and elaborate their consequences. Systems that link strategy formulation with strategy execution c) A cadre of insiders-outsiders (or vice versa) and organizational support of carefully construed strategic experiments.

    On the issue of transfering an innovation inside a larger organization and then scaling it, perhaps the following points are worth pondering: a) Scaling an innovation within a larger organization should be viewed as a reinvention of the innovation, given the new context and capabilities. b) A separate organizational unit with strong ties to the board might be advisable. c) Growing the innovation should be an integral part of the corporate strategy and made everybody's business through appropriate strategy management systems.

    Do you think that successful innovation really is intrinsically random? Or is the problem that management researchers and authors just haven't yet given us good theory that managers can draw upon to accurately predict what will succeed, and what will fail?

    Intrinsically random implies a phenomenon that defies and proves irrelevant governing designs and methods. Clearly this is not the case with innovation. Systems, culture, skills, structures play an important part on the outcome.

    If innovation were intrinsically random then managing it would be meaningless. But then why do the markets pay awesomely the venture capitalist industry for managing the allocation of resources to innovative ventures?

    Obviously, low average success rates of innovation efforts does not prove the absence of determining factors discriminating innovative ventures on the basis of probability of success, such as the ones discussed above. There is need for better theory and better measurement.

  • Jonathan T
    Student in Business and Marketing
    institute of technology of Angers, france

    Both innovation and success are not random. The reason we haven't yet understood how this phenomena works doesn't mean it is random. Successful innovation is the meeting of a right product at a right time. When motivated by trends, events or even philosophy, people will be willing to by a product. To be successful, an innovation has to be acknowledged as a breakthrough on a very wide scale. There are two dimensions in a success: the actual usefulness of the product and the feeling people have about the product. The real usefulness comes from the product or innovation itself, and the feeling people have of it comes from the advertising or information spread about it.

  • Vinayak Shetty
    Ingersoll Rand

    Successful innovation is not random, but is the result of continuous thinking and effort of an individual. However, the final result may be different than what was expected.

    History has shown that all theories and knowledge of a person have got very little to do with innovation.

    It is the need of society, combined with effort of the individuals that gives rise to innovations.

  • Roland Liu
    Consultant

    An understanding of the principles of how things work and why things are they way they currently exist is critical to successful (meaning useful) innovation. Verifiable theories support the understanding of the principles. In practice, many organizations ignore these basic needs.

  • Steve Ricci
    Alumnus mba 1974
    partner
    Flagship Ventures

    I have concluded the process of innovation is not random but the rules for success are very subtle. Much of the art is in tuning the product/service and the business to the market. Much of this taking place after the initial foray. It does seem there is a managerial instinct that some have and others lack, but I believe it is learnable.

  • Luis Arnal
    President
    in/situm

    In recent years I have used the term Innovation1.0 and Innovation2.0 to refer to the state of innovation today inside organizations. Most companies today still do innovation1.0 where creativity is main tool and random outcomes are prevalent. Theories may exist but these companies either are not aware of them or are not capable of assimilating these into their practice.

    Innovation2.0 is practiced by a handful of companies (big, multinational) and it is based on new theories and past failures. Most of these companies started doing innovation1.0 (10-20 years ago) and have failed, forcing them to develop new tools and cultures that fit their needs. Companies like Toyota and Whirlpool enter this category.

    The Innovation discipline today resembles that of medicine 500 years ago, people died for reasons we did not know then. Trial and error (and a lot of lost lives) helped advance this knowledge area. Likewise products today die for reasons we may find out in the future. Let's just hope that enough people work on different aspects of innovation and that this knowledge gets disseminated for advancing the discipline.

  • Amin Shahbuddin
    head of the Institution
    Education Promotion entre

    Are we able to recognize the vast power unleashed when change is strategic, innovative and positive? That drives our future. In years to come management researchers will be able to craft each individual program to give us the tool & framework we need to harness the power of change.

  • Jacki McMeeking

    I tend to agree with the leading statement that 'innovation is random' at least for the first phase of innovation - idea generation. The combination of a unique time, place, stakeholders, problems and other contextual factors where existing and new information collide to an innovative thought is random I think. The successful implementation of this innovative thought and success is, in my opinion, not so random. With management guidance and support the randomness should dissipate as the organisation (both at the top and bottom) learn from their successes and their failures and learn about a process of innovation implementation that works in their context. Regardless of the size of the organisation I think that lessening the randomness might come from our ability to learn from our mistakes.

  • Moderator

    Note: Comments below are in response to new questions posed by faculty on December 11, 2007.

  • Hardik Vachhrajani
    Doctoral Candidate
    Management Researcher
    NMIMS University, India

    Transformation in a function of innovation. Organizations use innovations to move up the value chain knowingly and unknowingly. Small organizations become medium; and medium large with the stepladder of innovation. There is a strong pattern in the kind of innovations they use to move up. So, innovations can be intrinsically random, no doubt about it, but the outcome has a pattern which can help us in framing a larger theory which can facilitate us in finding how the innovations enhance the transformation.

  • Abel Ferrandez
    Scientist

    I have always had the impression that there is a basic flood in every conversation I've followed on innovation, that is, the lack of a proper definition for it. If I asked 10 people to give me a definition of what is innovation (I had done it) I would get 10 different answers, witch means that each one of us speaks a different language when talking about innovation. I have only found one person trying to define what innovation is within this thread, Peyman Dayyani, and I certainly don't share this view. From this perspective I guess that innovation can't be anything but intrinsically random. Also, and with this in mind, I think that corporations can't innovate outside their strategy since this is impossible: this strategy defines innovation for them.

  • voruganty venkata subrahmanyam
    asst professor, finance
    SNIST, Hyderabad

    innovation is the hallmark of people in organization who are non conformists. the rules of the organisation do not allow for non conformity. thus innovators are either blocked , tied to their seats, not allowed to function - due mainly to non conformist stance. innovation in straight jacketed organisations is thus self defeating exercise and this explains why a small competitor is more innovative than a large organisation with set rules of organisational behaviour.

  • Charles Morrissey
    Alumnus/a 1962 MBA
    Strategy/Entrepreneurship professor
    Pepperdine University

    I've had the good fortune to work with two major "corporate venturing" initiatives. A major characteristic of each was the almost complete lack of awareness of the initiatives among the very employees they were trying to reach; the assumption that there idea was not "core" to the firm strategy without the opportunity to explore it further; and finally, the poor quality of the plans submitted.

    Prof Shih's observations on weaknesses in financial projections may be attributable to the need for extensive tutoring for these prospective innovators.

  • vijay venkatesh
    None
    Director, Offshore Strategy
    Pearson Education

    Another problem within the corporate innovation environment is that often existing products (teams, technology etc) need to be scaled or maintained for the current audience and for projected growth, while innovation needs to happen almost in parallel for future market needs.

    While I hate to draw on Google's example because everyone does so, their 20 percent free time to work on whatever they please seems to be one solution. These ideas may receive further funding.

    There was an excellent article in a recent BusinessWeek that talks about Cloud computing--an innovative idea that may change the future of computing-- and that is based on this free-time innovation of one of its computer scientists. It's quite clear this had little to do with Google's original Search and web-only related models. Just a thought...

  • Ofer Soreq
    Alumnus/a PMD79
    Marketing Director
    Sorpol Ltd., Israel

    "The practice of R&D involves making mistakes, realizations, corrections, and more mistakes. Trial and error is a fundamental part of the process. Too many managers in corporate America learn to avoid invention and new thinking because they have been convinced that their careers depend upon not making mistakes."

    -- Tom Huff

  • Kama Toffene
    Sales Director

    The Corporate Innovator question:

    Companies solve this problem by building very small internal Business Ventures dedicated to niche markets or specific innovations. A BV is small team of sales, Engineering and Marketing that are given 6 months to 1 year to succeed and make their innovation inline with the companies business model.

    The only problem for this is the timing : within the given time, the corporate innovation and the addressed market shall grow enough to fit the company's business model. Otherwise, it is rejected. The risk taken and the high potential candidates needed to lead such ventures may be a problem as well, given the future they could expect without taking such a risk

  • K.S. Ramachandra
    Genaral Manager
    Star Orechem International Ltd

    The question:Do you think that successful innovation really is intrinsically random? Or is the problem that management researchers and authors just haven't yet given us good theory that managers can draw upon to accurately predict what will succeed, and what will fail?

    Comments: Let me first comment about the word "Random" : Anything that occurs without any degree of predictability where control on occurance is minimal by human (but can be controlled after occurance)like rolling a dice.Often lack of predictability is one of the excuses to term an event random. If we go back to predictions of Issac Asimov and many other great authors and futurologists one can appreciate what kind of insight and vision these individuals had when they made such predictions on innovations in technology and human achievements.Thus it predictably(not randomly)occurs to me that lack degree of randomness is inversely proportional to degree of predictability. If for example,occurance of tremors and earthquakes are random since till now there is no precise way of predicting their occurance but there must be a hidden pattern or which is not yet deciphered by scientists and till such time it is a random occurance and once it is deciphered it becomes predictable. Lot many people have come out with lot many principles, tools and methodologies to make "innovation" a more structured and hence a more predictable happening. Certain case studies on big innovations in technology, business, products and services which have occurred in the recent past may throw more light on this aspect and may even reveal that they are not "intrinsically" random. If everybody believes that "innovation is random" then the whole lot of consultants, authors and innovation experts will not have much to do since for a random event there is no need for tools, methods,training and practice.

    My take is that if the problem or need or wanting is correctly defined and worked upon with all resources and alertness with clear vision of the end results then the innovation should follow. For example if Sony were fully alert and acted well in advance then there wouldn't have been Apple's innovation on music."

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