Wednesday, April 18, 2012

Large Company Innovation re-visited

A couple of articles I read recently put the spotlight on the challenges faced by large companies in maintaining their innovation trajectories.

When I studied management, and in the early years of my teaching career, Sony was always considered the epitome of a powerful innovator. The Walkman, the Betamax video format, the Handycam, and the Trinitron technology for colour television were some of the prominent innovations that characterized the company’s innovative genius. Over the last decade, Sony has lost its way, and I have often wondered why. This perceptive article from the New York Times suggests that many of Sony’s problems were internal to the organization. Somehow, this contradicts one’s picture of a Japanese company (consensus-driven, company more important than the individual, etc.), but is consistent with other accounts about Sony, starting with John Nathan’s Sony: A Private Life. Sony's travails point to the difficulties in sustaining a vibrant innovation culture in a large company.

In the Innovator’s Dilemma, Clayton Christensen convincingly argued that large, established companies are unlikely to embrace disruptive innovations unless they set up organizational units separated from the main business organization. This article builds on the “skunkworks” idea, but I really wonder whether the skunkworks model is a sustainable way for companies to pursue disruptive innovation – at some point, companies have to try and induce more disruptive thinking into their “Standard Operating Procedures,” even if this sounds like a contradiction!

1 comment:

  1. This blog sets the tone for the next decade.One common notation that changed among the top 3 Indian IT Tier 1 companies is to have IT strategy and move the value chain similar to IBM models. In the past Japanese found success, next turnover is by India.

    Shiva G Richmond,VA