Sure, innovation happens from time to time, but can we sustain it?

In the ‘90s, business professor Clayton Christensen noticed something strange about companies that failed despite having supposedly excellent management. They’d been blindsided by innovations, some of them developed within their own ranks, that they ignored until smaller upstart firms started encroaching on their markets. He wrote a book about the phenomenon, titled The Innovator’s Dilemma, and it became a bestseller and a business classic.

Christensen divides new technologies into “sustaining innovations” and “disruptive innovations.”

Sustaining innovations improve product performance of established products, while disruptive innovations appeal to the bottom end of a market, or even another market entirely, instead of the higher-end markets that sustaining innovations target. These simpler products, developed by outside firms then move upmarket to the point where they displace the sustaining innovation (and the companies clinging to the high end).

Of Hard Drives and Mainframes

Yet, companies who do make use of these technologies eventually improve their performance to the point where they can upset their competitors. Christensen uses the example of the disk drive industry, which he calls the “fruit fly of the business world.” (Geneticists study fruit flies because their life cycles are so short.)

For example, 8-inch disk drives were smaller than 14-inch drives that mainframes used, but also less reliable, which made them unattractive to mainframe customers. When the rest of your computer takes up an entire room, there’s not much of a point in having a smaller hard drive, especially if it’ll break more often than the 14-inch drive and doesn’t hold as much data.

The 8-inch drives, on the other hand were perfect for minicomputers. A number of firms , all new entrants, managed to thrive by making these new drives. They later made their way into mainframes after all when the companies made them cheaper, able to hold more data, and more importantly, more reliable. The same thing happened with 5.25 inch drives, then 3.5 inch drives, and smaller and smaller.

 

How to Sustain Innovation?

One way companies can avoid the fate of the 14-inch drive makers is to have an environment where people are encouraged to run with their ideas, no matter what happens.

For example, you could give an department within a company more autonomy to make its own decisions, within reason. In extreme cases, you might have to form a separate subsidiary. Christensen recommends this in The Innovator’s Dilemma if the values of an organization make it difficult to create a new product that, for example, will derive lower profit margins than the kind the parent company usually deals with.

Ultimately, people should be able to propose ideas without worrying whether they’ll fail or succeed. Of course, we want people to succeed, but a lot of good ideas don’t always look so good at first. After all, in the ‘70s, very few people predicted that we would carry our computers in our pockets, let alone want 8-inch and even smaller hard drives.

Even though an idea isn’t always feasible at first, once you get at least another brain on it, it can turn into something great. Even the greatest works of literature started from rough draft. It’s an act of courage in the first place to submit a draft in the first place, but it takes a good editor to whip it into shape.

You’ll have to make the members of different departments, who may very well have different values, comfortable with working with each other.

Sustaining the Future

If you shoot down ideas immediately, in the end you’ll only shoot yourself in the foot, as many mainframe and minicomputer companies found out with the rise of the PC. The only way to separate good ideas from bad is hindsight. We can sustain innovation, but only as long as we turn off some of our internal self-censorship mechanisms and start to follow our ideas. All too often, businesses can get so focused on doing things a certain way that any deviation looks like a threat. And as Christensen points out in his book, it becomes a self-fulfilling prophecy. If we learn to really collaborate, we can have more sustainable innovation in the long run.