Perspective # 28 – Competence-enhancing & Competence-destroying Innovations:

Competence-enhancing & Competence-destroying Innovations: So far in this blog we have explored many categories of Innovations – let us explore few more ☺ Tushman and Anderson introduced the terms - ‘Competence-enhancing’ and ‘Competence-destroying’ innovations. Competence-enhancing innovations leverage the current organizational knowledge to the next level. These innovations builds upon and reinforces existing competencies, skills and know-how. Turbofans in jet engines, series of breakthroughs in mechanical watches etc. are often quoted examples – all these innovations leveraged past tacit knowledge of existing processes and technologies which helped leap frog to the next frontier. Indian IT firms are classic examples – recall how they progressed from rote Y2K coding to advanced analytics now.

The next in the list is Competence destroying innovation, which obsolesces and overturns existing competencies, skills and know-how – a la phoenix legend. Think about how transistors destroyed vacuum tubes – or quartz watches killed (almost) mechanical watches. There are very few Indian examples – a close one is how Toyota Kirloskar killed the popular Quails Jeep with Innova – It was baffling, how on earth can someone think of discontinuing Qualis which had a loyal following with ‘classic’ SUV looks and replace with a odd looking Innova branded as multipurpose vehicle? End of the day the courageous step paid off. As per Tushman and Anderson "Competence-destroying innovations are negatively associated with incumbent performance, while competence- enhancing innovations are positively associated with incumbent performance—even as both are associated with system-wide organizational change."

Obviously competence-destroying innovations are tough to practice especially if one has to destroy the cash cow. Remember the famous quote of Ken Olson who was the CEO of DEC who spurned PCs and stuck to mainframe cash cows, "There is no reason for any individual to have a computer in their home" ☺ Though this quote has a context we all know that DEC died as they stayed away from competence-destroying innovations.