Large, mature companies like AT&T/Bell Labs, DuPont, Bayer Material Sciences, 3M, Corning, Dow Chemical, Air Products, and many, many others invest millions of dollars in research and development every year. However, they struggle to leverage those investments into new business platforms. Companies like General Motors, Kodak, Polaroid, and Intel have struggled to rejuvenate themselves as technologies change and new business models are required.
Even established companies not saddled with heavy investments in physical assets, like Yahoo or The New York Times, struggle to change their ways. Why is the average lifespan of a company shorter than that of a human being? Why do many companies that fail own valuable patents that they never commercialize?
Many theories exist that address these well-recognized problems. Some say the reward systems and processes that these companies implement focus only on rewarding increases in stock prices. Others say senior leaders are short-sighted, or that organizational cultures are tamped down with bureaucracy…and on and on and on.
How Do You Manage For Game-Changing Innovation?
Companies do not know how to manage for game-changing, step out innovations that create new lines of business. While technical career ladders for R&D experts have been added to the organization chart, there are no parallel paths for those with the expertise in building businesses on the basis of those exciting inventions. This is the next frontier of developing a sophisticated body of knowledge for business expertise.
Companies today rely on champions to push breakthrough innovation even if it means breaking company norms and rules. Hopefully such champions have a strong senior leader protecting them because, if not, they typically are demoted or sidelined in their careers as their projects take the typical unexpected twists and turns that innovation requires.
Companies can do better than this. In fact, we’re learning a tremendous amount about how companies can design management systems, roles, and career paths to build capabilities for managing far-future innovation. It’s a very exciting time to be a business school professor in the field of technology and innovation management. There’s so much to discuss.