The Dynamics of Innovation

30 Apr

Consider the following quote from James M. Utterback’s book titled Mastering the Dynamics of Innovation.

Firms owe it to themselves to improve and extend the lives of profitable product lines. these represent important cash flows to the firm and links to existing customers. They provide the funds that will finance future products. At the same time, managers must not neglect pleas that advocate major commitments to new initiatives. Typically, top management is pulled by opposing, responsible forces: those that demand commitment to the old, and those that advocate for the future. Unfortunately, advocacy tend to overstate the market potential of new product lines and understate their costs. Management, then, must find the right balance between support for incremental improvements and commitments to new and unproven initiatives. Understanding and managing this tension perceptively may well separate the ultimate winners from the losers.

Even those who were once considered on the forefront of innovation sometimes become entrenched in past accomplishments and are unable to embrace innovation past his or her initial own revelation. Consider the example of Thomas Edison. In 1879, he was considered a bold and courageous innovator. In 1889, he was a cautions and conservative defender of the status quo. Edison had adopted direct electrical current as the standard, even through alternating current was understood at the time. When George Westinghouse recognized the potential technical superiority of alternating current, Edison defended his turf in the legal system, through regulation, and in the court of public opinion.

Unless an organization and its leaders embrace innovation and change as a constant, they will succumb to the traditions of the past. The implementation of informal control will give way to an emphasis on structure, goals, and rules. Structure then becomes hierarchical and rigid, and tasks become formal. Ultimately, major innovations – once the life-blood of the organization – are less and less encouraged; continuous incremental improvements (though critical) become the norm.


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