Breakthrough innovation - one step at a time

Last week Wednesday(10-21-2009), I had the distinct pleasure to chair a panel of distinguished representatives of the Health care industry. Five people with very different backgrounds and experience bases, came together to discuss the topic of “Innovation in the Business of Health Care.”. This was one panel in a series that the Lally School’s Severino Center for Technological Entrepreneurship is hosting this semester. We’ve had panels on Innovation in the business of Energy, Innovation in the business of Media, Innovation in the business of Education (launching our new degree in Technology Commercialization and Entrepreneurship).

So this week it was about Health Care. It was an absolutely fascinating discussion. The panelists included the following people:
1. Dr John Bennett ,President and CEO of Capital District Physician’s Health Plan, one of the largest insurance companies and HMO’s in our region. Dr. Bennett is also a well respected cardiologist with many years of clinical experience in his specialty, but also an entrepreneur in that he founded and ran a very large physicians’ practice that services both primary care and specialty needs.

2. Ms Eileen Murphy , Director and COO of the SMART practice for PriceWaterhouse Coopers. Eileen has been part of PWC’s health care practice for 25 years, where she has worked with hospital systems to ensure their financial health and survival, including helping with mergers, helping gain state authorization to add services in markets of need, and, most recently, in helping them with compliance issues with insurance and regulatory bodies through the adoption of specific IT systems that create efficiencies in their operations as well as improved accuracy in their reporting.

3. Ms. Sue Ellen Wagner, Executive Director of Health Trustees of New York State, an affiliate of Health Associates of New York State. HANYS and HTNYS are advocates for hospitals and other health care providers in the ongoing political conversations regarding health care reform.
4. Dr. Patrice Milos, VP and Chief Scientific Officer, Helicos Biosciences, a small firm working on DNA sequencing and digital gene expression processes. Previous to this role, Patrice was Executive Director at Pfizer Global Research &Development.

5. Mr. Omid Moghadam, Personal Genomics Research, Harvard Medical School; Chair, National Development Board, Ignite Institute for Individual Health; and Founder and former CEO, Dossia Corporation. Omid has been an intrapreneur at Kodak and Intel, and holds 32 patents. Omid focuses on medical imaging, healthcare IT, personalized health records and the role of genomics in enabling personalized medicine.

I asked them 2 questions:

1. What are the biggest challenges facing our health care industry today?
2. What trends/opportunities/innovations are on the horizon that can help overcome these challenges?

Lots of the discussion had to do with people and politics. There are so many constituents in health care,
and they have competing interests. There’s no ‘leader’ and, in fact, the panelists noted, health care doesn’t even behave like an industry. It’s lots of mini industries. So that’s obviously a major problem, and potential solutions outside of the political arena seem to lie in the realm of business model innovations. A big one that came up was an experiment that the local HMO, CDPHP is trying in which they are moving to a different payment system for doctors, from fee-for-service to pay-for-performance, which, they believe, will deliver better service for patients, at a lower cost. Interesting that an Insurance company would view itself as the one to take this on, but John Bennett’s vision is just that. The timing is amazing. Time magazine just ran an article about payment systems for doctors. Check out this article.

But beyond the politics…there’s so much technological invention, it’s awe inspiring. According to these panelists, within a couple of years, we will be able to know our own genetic sequences for…..$1000! Once this is known, preventative care can move into action. And we can develop drugs for smaller, specific populations(at a lesser cost at right time), rather than work on blockbusters that we hope will work on everyone. As it stands now, some of us are overmedicated and others under-medicated by commonly prescribed drugs such as, for example, cholesterol meds. But since pharma companies must have major hits in order to support the R&D investments that fuel their growth, they’ve been reluctant to go down this personalized medicine route, which opens up small niche markets. Also, a major cost of drug commercialization is the long and arduous clinical trial process, to prove that the drug in question works across a large population. Well, turns out that most of them don’t…but as we learn more about specific smaller populations, we can custom make drugs to fit.

And that, of course, raises a host of additional political problems. Science can solve lots of problems, but alas, there are always, always, people issues.

View the Panel Video. Lots to think about in terms of innovation!

Happy Halloween by the way….

Did you see last week’s Tuesday (10-20-2009) Wall Street Journal? Front page news:Indian Firms Shift Focus to the Poor . This article describes how Indian companies are unleashing their well trained engineering based workforce on the problem of delivering technological innovation to the vast numbers of poor in that country. Developed countries have not been able to make that happen, as Vijay Govindarajan has demonstrated in his book Ten Rules for Strategic Innovators,on his blog and in his countless speeches. Ford takes its Escort and tries to reduce its cost. Even if they were successful and cut the cost in half (a major success by any means), the price of the car is still unaffordable for most of the Indian population. So Indian companies have taken matters in to their own hands, and begun to fill these needs themselves.

The term that is used to describe this phenomenon is ‘reverse innovation,’ which VG describes in his recent post as “any innovation likely to be adopted first in the developing world.” . Well, that’s one way to think about it…which focuses on the path of diffusion for the innovation.

But actually, these are really, truly breakthroughs. Cars that cost $2000 will enable new forms and uses for personal transportation. Portable water purifiers the size of a water cooler, priced at $43. Cooler sized refrigerators that can run on batteries in situations where power outages occur. ….priced at $70. Wood burning stoves for $23…that burn agricultural waste rather than hardwoods, and produce no smoke. Bank branches that operate off of a smart phone network. And electrocardiograph (EKG) machines for $1000.That’s 10% the price of the standard models. All of these are listed in the WSJ article as products that are in the market today. All of them are changing the way people live, bringing new to the world performance/cost combinations. That’s breakthrough, radical, game changing innovation.

Now imagine all of the new application areas that are enabled because of these breakthroughs. The most apparent markets are obviously the impoverished, since those were the markets that these companies had in mind. But water purifiers that could be owned by individuals could allow lots of new markets.So could banking by phone. So could high efficiency stoves.Watch out,developed nations. Breakthroughs are happening everywhere.

Couldn’t help but read through the entire article on the front page of today’s Wall Street Journal: “As Riches Fade, so Does Finance’s Allure “. It talks about all the young college grads who major in materials science, engineering, computer science, math, etc. who covet wall street jobs. …for the money. Talk about a giant sucking sound out of value creation and innovation. My own son was the same way. Majored in Physics and Math in college, and then started looking for jobs in private equity firms and hedge funds.

Then…the crash came. And guess what? All these graduates are re-focusing their talent into other industries, like, for example, solar energy. Some are becoming high school math and science teachers. Some mid-career technical types who’ve been laid off from the financial sector are starting their own companies. They can certainly afford to, given the salaries they’ve been making. Here’s an interesting quote from the article about the impact of having this talent flow back into value creating activities:

“Even a modest shift of talent could have an effect on society. When smart people become entrepreneurs, they improve technology in the line of business they pursue, and, as a result, productivity and income grow…By contrast..allocation of talent to professions such as finance and law—where returns come from distribution of wealth from others rather than wealth creation—leads to lower productivity growth., fewer technological opportunities and slower economic growth.” This is a result of a study by economists Kevin Murphy, Robert Vishny and Andrei Schleifer, quoted in the article. Reminds me of a statement one of our MBA students made recently: “Rather than trading companies’ stocks, I’d like to BE the stock that others find worthwhile trading!”

Those interviewed for the article noted that being forced to think about new careers was a relief, and that moving into an innovation related role or a service oriented role was something they’d always wanted to do, but the allure of big salaries just made it too hard.

Well, I, for one, would like to congratulate all those who do make those decisions, and would like to let you know how valuable your talents are in the world of technological innovation, where you can really change the game!

Mike Wolff , good friend and editor of the newsletter for CIMS (Center for Innovation Management Studies at North Carolina State University),contacted to follow up on my recent post about Jeff Immelt’s remarks in Detroit. Thought you might find our conversation of interest..

Announcing an R&D facility near Detroit last June, GE chairman and CEO Jeffrey Immelt slammed the decline in America’s manufacturing base and its investment in R&D. “You know something is wrong when a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is earning $100,000,” Immelt said. He called on the U.S. to “significantly increase investment in research and development from an all-time low of 2 percent of the GDP.”

That’s fine, breakthrough innovation scholar Gina Colarelli O’Connor responded on her blog ,“but it begs the question that we hear repeatedly from corporations around the country. Where do we begin. How do we capture breakthrough opportunities? What processes must be aligned to realize the full potential and earnings from new discoveries, new services, and new technologies?

“The answer is not simple,” O’Connor continued, “but requires a change in perspective and a change in how corporations fund, resource and manage innovation platforms and the functions that support them. The
learning we as researchers impart to corporations working to develop innovation capabilities is that the management processes developed by large companies to provide incremental innovation will kill off breakthrough innovations, and that companies must develop fundamentally different methods of managing breakthrough innovations. It’s the only sure bet.”

Really? Incremental innovation processes by large companies kill off breakthrough innovations? Fundamentally different methods are needed?

O’Connor is an associate professor of marketing and academic director of the Radical Innovation Research Program at Rensselaer Polytechnic Institute’s Lally School of Management and Technology .The 2008 book she and her research team published, Grabbing Lightning: Building a Capability for Breakthrough Innovation, captures the experiences and lessons from 28 companies observed over more than five years. Given that background, CIMS TMR was anxious to ask her to expand on her remarks, as follows.

Why do you believe the management processes developed by large companies for incremental innovation will kill breakthrough innovation? How will this come about?

Most management processes for new product development are based on the premise that we know our customer well, and need to respond quickly to his/her needs. This means we a) stay close to the customer, conducting ongoing market research regarding wants and needs, and satisfaction with current products, b) continuously improve our current offerings, and provide variety expansions and perhaps next-generation products that operate along the same technology and value proposition trajectories that the market is familiar with, and c) are very focused on introducing new products ahead of competitors, in a manner that differentiates us from competitors.

To accomplish these objectives, firms must be extremely disciplined regarding a) product features that get designed in, ensuring that customers will value them, b) speed to market, and c) adherence to a budget so that the ultimate price will be competitive, and breakeven volumes can be determined.

All of these conditions assume that we know our customers, know our technology capabilities, understand the resource requirements needed for achieving the appropriate product and launch schedule, and can forecast sales and costs in such a manner that profitability levels can be predicted. Indeed, decisions to proceed with projects are made based on those profitability predictions. This means we are dealing with higher levels of certainty. Cumulative experience with the market and technology/product category is highly valuable under this scenario.

That’s not the case with breakthrough innovation?

Not one of these conditions is the case with breakthrough innovation. A novel technology may have numerous applications, none of which may be familiar to the company. The technology may not be well understood, especially in combination with other technologies required to really make for a breakthrough value proposition. Rather than focusing on one product, there may be many alternative ways to formulate the offering. The timing, the market, the costs are all unknown.

If we apply decision rules and management techniques that work well under conditions of relatively high certainty to a domain in which our past experience may not really help us in predicting the path of the emerging market/technology space for a breakthrough, we will always get a ‘kill’ decision. The risks and unknowns are so high that any Discounted Cash Flow, Net Present Value, or Internal Rate of Return projection will always have to be discounted at such a high rate that their values will be too small for managers to approve such projects.

Can you provide some specific examples?

We studied one project for an electronic book years ago. The team had a combination of technologies that, taken together, could really move the e-book concept forward. But they could not forecast the rate at which each of these would develop, nor could they make any forecasts regarding sales, since the early markets for e-books were likely going to be markets such as health care, newspaper reporting, and perhaps technical manuals (these were some of the early applications they considered). Surely nothing like Kindle was expected to be an early application–they had to all be more specialized, since books could not yet be easily digitized, and the sales infrastructure did not exist.

Anyway, the technical team presented the project idea, and their forecasts were such that they did not meet the required hurdle rates for approval. So, their project was rejected. The next time projects were being presented to the funding board, the team took the same project forward. This time, they’d altered their assumptions in their economic models to ensure they met the required hurdle rates and voila! They were approved.

Of course, they had no confidence in their numbers, either time that they presented. They simply could not know. The future for them was unknowable. But they did what they had to in order for their project to get approved. What does this say about the level of honesty with which these discussions are conducted? Why not simply recognize that some things are simply unknowable, and proceed accordingly, with small steps to learn more each time, and redirect as we learn? These are the philosophies behind some of the more recent project management tools for breakthrough innovations that are being developed and adopted.

You imply this comes from learnings by you and other researchers. Please cite a few.

From a project management perspective, there is our Learning Plan tool (1) and there is also Rita McGrath and Ian MacMillan’s Discovery-Driven Planning tool (2). In terms of evaluating project progress, we know now that adopting a real options mentality is a much healthier approach to high-uncertainty innovation than are the conventional financial decision tools such as Discounted Cash Flow and Net Present Value. Real options thinking was being applied at Air Products, Corning, and Dupont during the period we studied them.

But that’s just the beginning of what we’re learning regarding project management. We’ve also learned an incredible amount about how companies build a capability for breakthrough innovation that can be sustained over time. We know that, rather than only focusing on a new project management process, for example, companies need to develop a complete management system for major innovation. This means attending to its governance, its structure (yes, there needs to be a group of people whose mandate is to orchestrate and implement the breakthrough innovation agenda for the company), talent development and career paths for individuals who have innovation expertise, resources, appropriate processes and tools, and finally, its metrics. We call this the governance model for Breakthrough innovation.

What exactly do you mean by governance here?

Governance in this context means decision making and oversight regarding a number of issues, including 1) which projects in the portfolio to continue to invest in, and which ones to back burner, 2) composition of the project teams (which changes frequently as the project faces new challenges and matures), 3) location of the group in the company, and its connection/interfaces with others involved in innovation, and 4) clarifying roles and responsibilities of staff members and leadership team of the innovation group.

What else did you learn from your research program?

Another key learning that emerged from our work is that a capability for breakthrough innovation really encompasses three distinct competency sets. The first is called Discovery. The second is called Incubation. And the third is called Acceleration. We write about each of these in our Grabbing Lightning book. We find that these must be managed together as a system. For example, if a company has a strong Discovery capability, but weak Incubation and Acceleration capabilities, we get great ideas that don’t go anywhere. If a company has a strong Discovery and Acceleration capabilities, but a weak incubation capability (which is what we see most often in large R&D-intensive companies), we get great ideas that are under-leveraged commercially.

There are many combinations to consider, but the point is that, if any one of these competencies is weak, breakthrough innovation cannot result in a sustained manner.

Thanks, Gina

References

1. Rice, Mark P.; O’Connor Gina Colarelli and Pierantozzi, Ronald. 2008. Implementing a Learning Plan to Counter Project Uncertainty. Sloan Management Review, Winter, Vol 49 (2), pp. 54-62.

2. McGrath, Rita Gunther and MacMillan, Ian. Discovery Driven Planning, Harvard Business Review, July-August, 1995.

Last week I had the opportunity to work with a firm that is trying to build an innovation capability. It’s a large privately held firm in a highly regulated industry that is undergoing lots and lots of disruption. They know they need to generate new revenue streams, and so, in one division, they appointed a “director of innovation.” Cool! She knows she needs to develop an innovation management system, but isn’t sure where to start. So we got down to business.

It soon became clear that what her leadership thought was innovation was very different than what she thought they should think was innovation (still with me?). I agreed. It’s amazing what people will call innovation. Her leaders were using the term to denote what we once knew as business process re-engineering …the ultimate in continuous improvement. They wanted her to oversee this function in the company. They called it “business model innovation.” Well, there ARE lots of potential business model innovations in her industry (pharmaceuticals and health care). But helping the salesforce implement a new software package is not one of them…and that’s the sort of thing her leadership believed she should do. That’s continuous improvement.

Others believe that patents, or inventions, are innovations. They aren’t. Not until some useful purpose is demonstrated and there’s a link to a need. All the follow-on work to develop that invention into a useful product or service is the part that makes it an innovation. - So, her first step will be to educate her leadership on the definition of innovation. Here’s what we told her:Breakthrough innovations are those with the potential to offer new to the world performance features, OR order of magnitude improvements in known features, OR dramatic reductions in costs. These last two options open up new applications for an offering that may never before have been imagined.

Take, for example, the personal computer. Now that was a breakthrough. But all of the subsequent improvements? Some have been incremental, and some have perhaps been evolutionary. Hybrid vehicles? Breakthroughs. Subsequent generations (like the new one with solar cells in the roof to heat/cool the interior)? Evolutionary. CT scanners? Breakthroughs. Cell Phones???? I Phones?? What other breakthroughs come to mind? There are myriads. One of our recent graduates just sent me an announcement that the start up firm he’s with has a breakthrough. It is the first-ever FAA certified speech recognition system for pilots. It allows the pilot to enter waypoints in 1/10th the time required by the current method. Now that meets the requirement, right? :-). Take a look at this if you want to see a demo. This will allow pilots to operate very differently in cockpits. Could change a lot of things.
But the key issue associated with breakthroughs, and even with evolutionary innovations, especially in the mature established firm, is the uncertainty inherent in them. Because of this uncertainty, managing them is different from managing incremental innovation or continuous improvement. Way different.

Most activities that companies engage in have to do with using what they know in familiar situations. That’s mostly the world of higher degrees of certainty, and implementation is the key. When the world is uncertain, it’s hard to know what the outcome of any action you take will be. That makes managers in companies nervous, because predictability (and therefore control) are not the name of the game. Experimentation and learning are.

It seems that companies who have not focused on developing a management system for innovation have a very difficult time keeping its definition clear. It differs across individuals in the organization. Everyone has a different understanding about what it is.

So step #1 in initiating a capability is to clarify definitions.
When beginning that discussion, ask some of these questions:
1. How many ‘levels’ of innovativeness do we experience in our company, and what should we call them? (Incremental, Evolutionary or platform, and breakthrough? Today, tomorrow and beyond? Horizon 1, Horizon 2 and Horizon 3? There are lots of options for names, but most companies settle on three ‘levels’ of innovativeness).
2. How shall we allocate our resources across those three levels?
3. What do you believe the differences are among them, and what are the management implications regarding each of the following? In other words, how should we handle each of these differently for the three levels of innovativeness?
a. Processes and tools
b. Metrics
c. Organizational structure arrangements
d. Governance and leadership
e. Resources?
f. Skills and talent development?
If they start to look at you quizzically…..you’ve done your job. You’ve got them thinking. Yowza!

Way back in January I was invited to give the keynote address at the Women of Innovation Awards banquet hosted by the Connecticut Technology Council. If you’re interested, you can watch it here. The awards program recognizes women in the workforce who are innovators, role models and leaders in the technology, science and engineering fields. Students at both the high school and college level are also recognized. Nearly 500 people attended to support their coworkers, friends, and community members who had been nominated.

It was an absolutely awesome experience to be in a room with so many innovators. Ten women were granted Awards in 9 categories, including Academic Innovation and Leadership, Collegian Innovation and Leadership, Community Innovation and Leadership, Entrepreneurial Innovation and Leadership, Large Business Innovation and Leadership (two 2009 Winners), Research Innovation and Leadership, Small Business Innovation and Leadership, Youth Innovation and Leadership, Public Sector Innovation and Leadership. They were extremely impressive people: scientific researchers, entrepreneurs, business leaders and policy makers. You can meet a few of them below in the videos posted.

But beyond the fact that these people have achieved so much, and contributed so much through their innovation based careers, I was also impressed by the Connecticut Technology Council itself, and the role it plays in bringing together companies both large and small, government, and universities to consider how technology can play a more effective role in the state of Connecticut. Just having an organization such as the CTC in place, to recognize innovators, sends strong signals throughout the state and local community about the importance of innovation. And that can’t be bad.

 

 Video-1: Play Now | Play in Popup | Download

 

 Video-2: Play Now | Play in Popup | Download

 

 Video-3: Play Now | Play in Popup | Download

Last Friday a recent graduate of our MBA program, who now works for GE, sent me a copy of a speech that CEO Jeff Immelt was making at the Detroit Economic Club. He’d just signed an agreement for GE to partner with the State of Michigan to build GE’s Manufacturing Technology and Software Center, for the purpose of developing technology to provide clean energy, better transportation, and affordable healthcare.

Mr. Immelt offered encouraging words to the hard hit people of Detroit. “The people of this great state have been told that the decline of their manufacturing base was inevitable. I reject that pessimistic view. I believe that good jobs can again return to Michigan and in manufacturing centers across America.” He opined that America prospered from the productivity of the information and services age, but has forgotten the fundamentals of its core competencies.

“As a nation, we’ve been consuming more than we earn, saved too little and taken on far too much debt. Growth in research and development has slowed. …While some of America’s competitors were throttling up on manufacturing and R&D, we de-emphasized technology. Our economy tilted instead toward the quicker profits of financial services….What has been the impact? Unemployment is at the highest point in 26 years. And, as a percentage of S&P 500 earnings, financial services expanded from 10 to 45 % over a quarter-century.”

“You know something is wrong when a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is earning $100,000.”

Mr. Immelt went on to call for America to set its sights on being a leading exporter based on a strong manufacturing base (20% of jobs should be in manufacturing, he claims) , to invest more in R&D (it’s currently at an all-time low of 2% of GDP), and to address the major challenges of clean energy and affordable health care.

Was Mr. Immelt’s speech self-serving? Absolutely. GE’s stock crashed along with everyone else’s, thanks in large part to its enormous financial services business. Surely, not all of our problems would disappear with a return to manufacturing. But the focus on innovation? On technological innovation? On investment in technology? It’s the only sure bet. But it begs the question that we hear repeatedly from corporations around the country. Where do we begin. How do we capture breakthrough opportunities? What processes must be aligned to realize the full potential and earnings from new discoveries, new services, & new technologies?

The answer is not simple but requires a change in perspective and a change in how corporations fund, resource and manage innovation platforms and the functions that support them. The
learning we as researchers impart to corporations working to develop innovation capabilities , is that the management processes developed by large companies to provide incremental innovation will kill off breakthrough innovations, and that companies must develop fundamentally different methods of managing breakthrough innovations. It’s the only sure bet.

Sunday’s radio show on June 7th,2009 as mentioned earlier in our monthly update was so much fun. Zara was such a knowledgeable and energetic host. We could’ve spoken for hours. Her focus is on the people issues associated with breakthrough innovation. Of course these are HUGE. But of course they’re only one element of a system of issues that must be considered…but you know that by now! Listen in if you’re interested.

Looking forward to a few upcoming events in the next several days. Just wanted to let you know in case you are interested in tuning in:

This Friday, June 5th I will be moderating a brown bag lunch discussion of a recent article published in Research-Technology Management titled Sustaining Breakthrough Innovation,authored by yours truly. This series is organized and hosted by the Industrial Research Institute, and you must be a member to participate so check them out at www.iriinc.org.

Sunday, June 7th, 4:00-5:00 p.m. EDT, I am joining a new acquaintance of mine, Zara Larsen, on her Tucson-based live talk radio and web streamed show. “Circles of Change with Dr. Zara Larsen: Where Your Path is Created by Walking on It” is dedicated to opening up positive conversations on personal career and organizational change to inspire and help others during these change-rich times. Zara has hosted over 120 shows in just over a year featuring guests from around the country. No surprise, we will be discussing our new book Grabbing Lightning: Building a Capability for Breakthrough Innovation.

Join us live via web stream at your computer or within the Tucson/Phoenix broadcast area on AM 1330 KJLL “The Jolt”. Call-in questions to (520) 529-3508, toll free (877) 544-2580, or email questions can be sent to change@thelarsengroup.com

If you miss the live show, a recap and full podcast will be posted at “Circles of Change Radio”, 2009 Season left hand tab by Wednesday evening, June 10th, where you will also find the free library of thought provoking shows to date.

Thanks in advance for joining us!

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!