I had the opportunity to interview Mark W. Johnson, a co-founder and senior partner of Innosight, and author of Seizing the White Space recently. Here is part one of this two part interview:
[Braden Kelley:] 1. When it comes to innovation, what is the biggest challenge that you see organizations facing?
[Mark W. Johnson:] Organizations don’t fully understand the term innovation. They think about it as some kind of monolithic term. But the fundamental challenge that organizations face with innovation is something most of them aren’t really aware of. That’s the fact that there are really two kinds of innovation — innovation to sustain the core and innovation for creating new business platforms in the long term.
The two couldn’t be more different. They play different roles in strategy. They need to be developed according to different timetables, with different levels of resources and different people, rewarded in different ways.
Innovations meant to sustain the core – like Windows 7 or the next Nokia camera phone – are developed within a company’s current business model and so fit very comfortably within its existing processes. These are generally short- and medium-term projects. The company devotes large teams and substantial funding to and then rightly expects large revenue payoffs pretty soon in return.
But innovations meant to fuel the future – those like the Apple iPhone/iTunes combination or the iPad – need to operate more like start-ups do, starting as small projects overseen full-time by a small group of people given a small amount of funding. And, critically, they need to be understood as long-term seeds for growth. They need to be given enough time – five to seven years in many cases — to find their path to fulfilling their potential before demands are made on them to contribute significantly to the top line.
All too often, companies fail to distinguish between the two and treat all innovation efforts as short-term, core initiatives. So as a practical matter, the people chartered with fueling the company’s future end up having to split their time over too many projects both short and long term. Worse, they subject both kinds of projects to a single time scale and are rewarded with the same incentives. In my view, that’s the critical problem that companies trying to innovate need to confront.
I was just on the phone with the CEO of a large health care company, who was asking, “How are we going to think about innovation?” And I said, “First off, your teams – your game changers who you want to develop your new business platforms — are being asked to do innovation part-time. How are they going to be successful when they’ve got their day job and that job is from a totally different discipline from the one you want them to do as new-growth innovators?” One job is control and execute the core, and the other is create something new.
[Excerpt, click on the link to read the rest of Part 1 of this interview. We’ll post the link to Part 2 above this post when it’s available.]
From: Innovation Excellence — Getting Smarter at Failure — Interview – Mark W. Johnson – Part 1 of 2
By Braden Kelley