Innovation Succession

Jim Euchner,  From the Editor, RTM 61.1

“To everything there is a season, and a time to every purpose under the heaven.”

—Ecclesiastes 3:1

I have always been intrigued by the notion of forest succession. Following the burnout of a forest, the trees that grow are not (at first) the ones that were burned. The soil and the light are not proper for these trees. Instead, first-generation vegetation—mostly mosses and grasses—begins to grow, almost as soon as the ashes cool. Over time, as these plants grow, they change the composition of the soil, making the conditions right for a second-generation forest composed of bushes and small trees. Next, fast-growing evergreen trees take over. These trees love the sun and quickly become the dominant species. Soon, trees that thrive in the shade—the large, deciduous trees that will be the dominant species in the mature forest—begin to grow in their understory. The canopy they produce creates an environment in which the shade-intolerant pines cannot thrive; the climax forest is primarily composed of large, long-lived, shade-producing trees.

Innovation in corporations can be like the evolution of a forest. When a decision is made to start or restart an innovation program, the soil is fresh. The first-generation work is usually groundwork—setting up a capability, communicating about innovation, educating people in its potential. Eventually, there are some successes (and some failures). The successes create more of an appetite to take bigger bets or bets further from the core. These second-generation bets are more visible, and they can help create the conditions for more breakthrough innovation, but they also entail bigger risks. Their very success breeds a new set of challenges—how to invest in the wins, how to organize for change, how to manage tension with the core business. The success may even occasion a rethinking of the program itself. This can be painful, as the program that brought the company to its current success may not be appropriate to support new aspirations. In succeeding, the program has sown the seeds of its own destruction. And sometimes, something akin to a forest fire—a change in leadership or a downturn in markets—can send the program back to its beginnings.

We have all experienced this evolution: the rise and decline, the success and dismantling of innovation programs. But the most direct analogy between the evolution of innovation programs and forest succession may be that for innovation, as for vegetation, the conditions must be right for a particular practice—a particular species of innovation—to flourish. Identifying the key conditions for different practices is the subject of the papers in this issue.

Sabine Brunswicker and Henry Chesbrough’s article, “The Adoption of Open Innovation in Large Firms,” is the first example. Their report looks beyond past surveys, which have focused on the implementation of open innovation at the organizational level, to analyze open innovation practices at the project level. Their goal was to identify the factors that distinguish success from failure at a more granular level than had been attempted previously. They found that success in open innovation depends, in part, on the willingness of teams to share knowledge and selectively disclose information to potential partners, something they call “purposive design of openness.” Without this willingness, success is less likely. An open question is whether, an organization must go through learning stages with open innovation, akin to the growth stages of a forest, to reach the necessary level of maturity.

And, in “Reversing Gears,” Sergej von Janda, Monika Schuhmacher, and Sabine Kuester argue that “to successfully transfer emerging-market innovations to developed markets, companies must develop a culture that promotes reverse innovation.” In other words, the soil must be right for reverse innovation. They observe that developing a successful innovation for resource-constrained customers is not enough; the barriers to its transfer to developed markets must be overcome. The ability of a firm to do this depends on its culture; in particular, successful reverse innovation requires a culture that is not afraid of cannibalization, that includes a diverse management team, and that nurtures an open mind-set. Before firms seek to invest in a reverse innovation initiative, they should assess their ability to provide the right nutrients to allow it to grow and thrive.

This issue also includes an interview with John Rossman, who led two new businesses at Amazon and authored The Amazon Way. Amazon is, in many ways, an advanced life form in terms of its ability to nurture innovation. It has evolved from books to CDs and then to making itself the “everything store”; from selling its own inventory to becoming a marketplace for goods from Amazon and from its competitors; from offering storefronts to third-party vendors to providing these competitors its vaunted fulfillment services; and from operating a high-performance, cloud-based infrastructure for its own use to becoming the leading provider of cloud services to others. Rossman gives a window into how the company does this by discussing its 14 operating principles and describing how they play out in practice.

A big frustration of innovation managers is the difficulty they face in adopting promising new innovation practices, even ones that have been very successful at other companies. Cultural factors—the corporate analogues to the conditions of soil, sunlight, and rainfall in the forest—loom large. Although there are common requirements for successful adoption across the spectrum of practices—an openness to new practices, senior management support—there also appear to be environmental factors that are particularly important to specific practices. To the extent that these preconditions can be understood and taken into account in driving an innovation program, success rates should improve. We hope that this issue of RTM provides some of the practical insight needed to make those factors more clear, and success more certain.

Read more from this issue…..


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