Boundary-Setting Strategies for Escaping Innovation Traps

Smartly placed, legitimizing constraints actually enable innovation by focusing it and giving it traction in the competition for corporate attention and resources.

Like many CEOs, Andy Grove missed the boat on the Internet. The longtime CEO of Intel Corp. explains that he was simply too busy with the microprocessor business, which was doing extremely well in the mid-1990s.1 Similarly, Microsoft Corp.’s preoccupation with its release of Windows 95 initially blinded it to the vast potential of the Internet as a business proposition. The truth is, emerging opportunities for innovation are often obscured by current business concerns. For managers who have many competing demands for their attention,2 short-term needs and goals are often more pressing and absorbing than long-term possibilities.3 In attempting to run their companies to the best of their abilities, executives can paradoxically make themselves vulnerable to a variety of “traps” that actually forestall innovation. In our work (see “About the Research.”), we have identified three common innovation traps that can ensnare managers at large established companies, particularly when radical rather than incremental innovation is called for.4 These are the performance trap, the commitment trap and the business model trap. These categories dovetail nicely with much of the existing management literature on the subject. (See “The Innovation Traps.”)5

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References

1. “The Charlie Rose Show,”

Acknowledgments

We would like to thank Charles Baden-Fuller for comments on an earlier version of this article. The first author wishes to thank Woodside Institute partner companies for their long-lasting support. The second author gratefully acknowledges financial support by the research foundation at the Bocconi School of Management.