Corporate Innovation and Hacking

In Clayton Christensen's Innovation Brain, Jena McGregor of BusinessWeek talks to Clayton 10 years after the publication of The Innovator's Dilemma (an excellent book, BTW) and elicits some insightful answers. I'd like to highlight two of them.

1. On the topic of why it is dangerous to mistakenly equate "disruptive" ideas with those that are "new" or "bold", he says:

Because it causes them to think that, "I'll just take whatever hobby horse I have, because Clay's study showed that disruptive products create these new growth markets. I'll cause everyone to believe my idea's going to do that." In fact, big technological leapfrogs rarely create new growth. Almost all of them are defensive in character. The equation of disruptive with new and radical causes people to target markets that don't exist.

Andy Grove recognized this a lot sooner than I did. There are many prior connotations in the English language for the word disruption. He was worried that the word would be so misused that he called it "the Christensen effect" internally. The problem was I couldn't call it the Christensen effect. In retrospect, it would have made things a lot clearer had I found a word that didn't have so many other connotations. It gets hijacked.

It's sad but true. I've seen more than a few people get all excited about something new (that's really not) and call it disruptive or go on about how it's going to change the landscape. Rarely does that actually happen.

2. On the topic of trying to cultivate innovation in established companies, he says:

Generally you create a lot of hype. People come up with lots of new ideas, but nothing happens. They get very disillusioned. Never does an idea pop out of a person's head as a completely fleshed-out business plan. It has to go through a process that will get approved and funded. You're not two weeks into the process until you realize, "gosh, the sales force is not going to sell this thing," and you change the economics. Then two weeks later, marketing says they won't support it because it doesn't fit the brand, so we've got to change the whole concept.

All those forces act to make the idea conform to the company's existing business model, not to the marketplace. And that's the rub. So the senior managers today, thirsty for innovation, stand at the outlet of this pipe, see the dribbling out of me-too innovation after me-too innovation, and they scream up to the back end, "Hey, you guys, get more innovative! We need more and better innovative ideas!" But that's not the problem. The problem is this shaping process that conforms all these innovative ideas to the current business model of the company.

[Emphasis mine.]

That's so true.

That was a real concern for the internal Hack Days we started at Yahoo. Back when we hosted the first Hack Day, some worried that it could be a great time and fun to show off, but if nothing ever saw the light of day, people would eventually figure out that's it's all talk and no meaningful action.

Thankfully, we've seen several business units and product groups really embracing the ideas and prototypes that come out of Hack Day. They've been funneling them into an accelerated development process and getting them launched.

The beauty, of course, is that people start to see evidence of how powerful it is to spend a day or two on a hack (it could get launched quickly), so the quantity and quality of the hacks seems to increase each time. It's a positive feedback loop.

It's a great problem to have and exactly the opposite of what we'd worried about happening.

Posted by jzawodn at June 28, 2007 09:12 AM