MIT Sloan Management Review

How can companies ensure that a promising initiative receives the necessary resources? And why do so many brilliant inventions fail while other seemingly mediocre offerings succeed? Such questions are addressed in two recent books — Unrelenting Innovation: How to Build a Culture for Market Dominance by Gerard J. Tellis and The Wide Lens: A New Strategy for Innovation by Ron Adner. The first book concentrates on a company’s internal workings, while the latter focuses on its external environment.

Increasing numbers of companies, whether providing hardware devices, traditional software or software in the cloud, are trying to become platform masters by releasing application programming interfaces that allow others to build software and hardware products or complementary services on top of their offerings.

But what can you do when a competitor has already established a leading platform? Learn from Apple’s iPhone, Google’s Gmail and Facebook — and how they overtook earlier market leaders.

In this interview, MIT Sloan School of Management professor of management Michael Cusumano discusses traits that will help companies through disruptive transitions. One trait is agility, which has four principles: capabilities rather than strategy; pull rather than push concepts; economies of scope rather than scale; and an emphasis on flexibility rather than efficiency. A second trait is deep, differentiating capabilities, which can be found in processes (such as supply-chain management).

Should external innovators be organized in collaborative communities or competitive markets? The answer depends on three crucial issues.

You would think that a company like Intel, which in 2001 provided nearly 85% of the microprocessors for personal computers, would feel relatively secure. But companies holding the keys to popular technology don’t live in a vacuum.