How General Motors has struggled with innovation in recent years — and why inconsistent support for innovation is not a problem unique to G.M
The New York Times ran a fascinating article on General Motors' checkered history of innovation in recent years (registration required); it's a veritable case study on how not to innovate. With many G.M. senior executives coming from finance -- rather than engineering or product development -- backgrounds in recent decades, the company judged new products on profitability -- killing an electric car initiative in the late 1990s and not capitalizing on its own hybrid technology for years, according to The New York Times.
But inconsistent support for innovation is not a problem unique to G.M. In "Managing Internal Corporate Venturing Cycles," a 2005 MIT Sloan Management Review article by Stanford's Robert Burgelman and Liisa Välikangas, Burgelman and Välikangas observed that "many major corporations experience a strange cyclicality" in their attempts to launch new ventures internally -- a cyclicality marked by starting up programs only to shut them down later.
Can innovation save G.M. now? Well, one common stage of the cycle that Burgelman and Välikangas described is when companies are "desperately seeking" to launch new ventures because their core business is deteriorating. "Such decay is often caused by disruptive technologies, which the company may very well have dabbled in early on but given up or failed to capitalize on....If top management waits until new business opportunities are desperately needed, it is usually already very late in the game."