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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
About the Research
We began our inquiry into the effects of boundaries on innovation from a practitioner perspective by reflecting on the cases of companies we knew. Liisa Välikangas has addressed innovation in various companies and contexts, including Shell, Nokia, Air Products, IDEO, Sun Microsystems and others. Michael Gibbert has written about innovation, organizational capabilities and the management of knowledge assets in such companies as BASF, Deutsche Bank, Siemens, Novartis and Unisys.i We also considered what other authors in strategic management and the management of innovation have discovered about boundaries and/or innovation. We found that few authors addressed the two issues in conjunction; even fewer studies integrated ideas about the effects of boundaries on innovation, and none that we are aware of considered the dual nature of boundaries — either enabling or constraining.ii Thus we sought to explore the notion of boundaries in innovation together with the specific ways in which the company managed innovation by setting constraints and creating enablers.
Methodologically, we were inspired by Glaser and Strauss’ “grounded theorizing,”iii and wished to engage executives in a dialogue.
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1. “The Charlie Rose Show,”