Innovation as a State of Mind
IBM Vice President of Innovation Irving Wladawsky-Berger really hit a nerve at BIF-3 when he questioned whether any company can reinvent itself without having a near death experience. Our co-host Bill Taylor was certainly affected and wrote a good blog entry about it at Harvard Business Online.
From Bill's blog:
But one of everyone’s favorite presenters was Irving Wladawsky-Berger, vice president of technical strategy and innovation at IBM, who has been behind so much of what’s gone right at the company over the last ten years—its enthusiastic embrace of the Internet, open-source software, and innovation on so many fronts.
What made his presentation so memorable was the fact that he was so candid. Yes, IBM had engaged in a deep-seated transformation. But to this day he wonders whether Big Blue would have made such big changes had the company not walked to the edge of the abyss. “Can a company reinvent itself,” this legend of corporate transformation asked, “without going through a near-death experience?”
Two weeks later, Irving's story continues to gnaw at me as well. There's a reason why business model innovation is an entrepreneur's game: more than process, innovation is a state of mind.
In our last session of BIF-3, Mark Cuban was asked by Walt Mossberg whether he agreed with Irving's conclusion that companies must walk the death march before they can truly change. Cuban's response: "Absolutely, which is why I usually sell the company before it gets to that point."
The audience naturally laughed and Cuban followed up his cheeky answer by saying: “Every day I wake up knowing that there is a 12 year-old out there somewhere that’s trying to kick my ass. If you don’t pay attention to your business your ass will be kicked.”
Established companies are actually rather good at embracing change if it sustains their current business model and delivers an improved product for their customers. I think Clay Christensen summed it up best during his interview with Walt likening business model innovation to biological evolution: Populations evolve, even though individuals can't. The same thing happens in the corporate world, Clay said. "The population of business units within corporations evolves, even though individual business units can’t. That’s because the capabilities of business units reside in their processes and their values, and by their very nature, processes and values are inflexible and meant not to change."
The key, according to Christensen, is that companies must invest to create the new growth business while the core business is still growing, because new business units don’t need to get big fast. But when the core business stops growing, investing to create new growth businesses becomes impossible. "Once a company’s growth has stopped, the game as we have known it is over," he said.
Later this week at our Innovation Story Studio we'll be posting videos from the summit. I'm eager to hear once again the words of Irving and Clay. Struggling CEOs take heart - you'll hear advice to live by.
BIF RECOMMENDS::
Strategy & Business has a superb interview with Clay Christensen. Conducted by New York Times journalist Lawrence M. Fisher, it's a perfect primer into Clay's theory on disruptive innovation.
innovation/Posted October 22, 2007 09:23 AM by Chris Flanagan | Permalink
