Strategic Innovation: Vijay Govindarajan and Chris Trimble, professors at Tuck School of Business at Dartmouth College introduce the concept of Strategic Innovation in the book Ten Rules for Strategic Innovators: From Idea to Execution. 'Strategic Innovation' as per these gurus is different from product innovation, process innovation, value innovation, service innovation or business model innovation. Strategic innovation is an experiment usually done by well-established organizations involving a sizable investment in an unfamiliar new business that may take years to produce a profit. The book includes case studies of some of the companies who ventured into this space - New York Times Digital, Corning Microarray Technologies, Hasbro Interactive, Capston-White and Analog Devices.
Their research explains how some firms are able to execute the big idea they had and how to build a new cash cow while sustaining the bread and butter existing business. The authors explain the three challenges (a: The need to 'forget' the parent company success recipe b: 'Borrow' some assets of the parent, such as brand, manufacturing etc. c: 'learning' on how to succeed in a new environment) The Key message is as fol. "The core competencies and routines you have developed to succeed allow you to innovate in an incremental way around the current business But, those same competencies and routines will hamstring entrepreneurial efforts in new businesses. If NewCo cannot forget the old, then it will have trouble learning the new.” and this means rewiring the organizational DNA across four areas: staffing, structure, systems, and culture.
Tough job indeed..Considering the shorter CEO life spans and the danger of missing the quarterly earnings estimates! Reminds of the famous Jonathan Swift quote "He was a bold man that first ate an oyster." Yes, it needs lots of courage and boldness to do a strategic innovation experiment, but it is worth it.
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