This article explores the process of innovation in 13 global companies. Many of the standard arguments for how to encourage innovation were confirmed, but some surprises were uncovered as well. The article organizes its key insights around five persistent “myths” that continue to haunt the innovation efforts of many companies. The five myths are: (1) The Eureka Moment; (2) Built It and They Will Come; (3) Open Innovation Is the Future; (4) Pay Is Paramount; and, (5) Bottom Up Innovation Is Best.
Nurturing a new and lasting idea doesn’t result from analyzing market data. Aspiring creators must act on what nonprofits already know: you get the best answers by burying yourself in the questions. The authors explore the efforts of companies such as Grameen Bank and Hindustan Unilever Ltd., the Indian subsidiary of the Dutch consumer products multinational Unilever N.V. They are engaged in serving the multitrillion-dollar consumer market at the “base of the economic pyramid” or BoP — the four billion people with annual per capita incomes below $1,500.
Companies are increasingly rethinking the fundamental ways in which they generate ideas and bring them to market — harnessing external ideas while leveraging their in-house R&D outside their current operations.
Fighting against a disruptive business model by rolling out a second business model is one option for companies to consider. But to make that work, you need to avoid the trap of getting stuck in the middle.
Most companies segment their markets by customer demographics or product characteristics and differentiate their offerings by adding features and functions. But the consumer has a different view of the marketplace. He simply has a job to be done and is seeking to “hire” the best product or service to do it. Marketers must adopt that perspective.
Using outside technologies to develop products and licensing intellectual property to external parties will carry a company only so far. The next frontier is to open the business model itself.
MIT Sloan economist and digital-business expert Erik Brynjolfsson tells how the rising data flood and emerging tools for analyzing it are changing the ways innovation gets done.