Outsmarting the Upstarts Harvard Business School Press Publishes New Book By Lally School Professors
TROY, N.Y. -- Radical innovation happens in big corporations - but it's the exception rather than the rule. Making it sustainable and routine requires visionary leadership, markedly different management techniques, and an entrepreneurial team that can "manage chaos," say six Rensselaer management professors. In their new book, Radical Innovation: How Mature Companies Can Outsmart Upstarts (Harvard Business School Press), the Rensselaer team lays out a manifesto for managing corporate innovation.
"The business model these days is more than 'build a better mousetrap,'" says Mark Rice '71, director of the Severino Center for Technological Entrepreneurship. "Firms need to build a different mousetrap. If they don't do it, a competitor will - and will drive them out of the market."
Rice is one of six Rensselaer management professors who have followed top-secret research projects at 10 major corporations. Funded by a major grant from the Sloan Foundation in partnership with the Industrial Research Institute, the research examined radical innovation at Air Products, Analog Devices, DuPont, GE, GM, IBM, Nortel Networks, Polaroid, Texas Instruments, and United Technologies.
The researchers found that creating the culture of entrepreneurship within a big corporation is no easy task, but sustaining that culture was a real management conundrum-"an unnatural act," says Richard Leifer, associate professor of management.
"It's impossible to predict manufacturing costs, sales figures, market response, and profits for a product that doesn't exist," says Gina O'Connor, assistant professor of marketing and another member of the research team. "Traditional management and marketing techniques just don't work when applied to radically new technologies."
But established firms are learning some new tricks.
Texas Instruments, for example, developed a Digital Micro-mirror Device capable of creating a high-quality screen image by bouncing light off 1.3 million microscopic bi-directional mirrors squeezed onto a one-square-inch chip. The technology will displace rolling movie films and has opened up an entirely new infrastructure for distributing motion pictures to theaters.
As a result, Texas Instruments has formed a new division to develop and manage this technology.
The Rensselaer research team advocates firms establish a radical innovation hub within corporate R&D to provide support, access to funding, organizational contacts and networks, marketing and mentoring skills, in order to transition projects to successful operating status.
Firms that succeed at radical innovation over the long haul must establish this type of infrastructure so its passionate, entrepreneurial-minded individuals are not fighting bureaucracy, but rather are systematically supported as they wade through chaos.
Vital to that success is keeping the right people, and keeping them happy, stresses Rice.
"Dedicated, visionary leaders are critical to the radical innovation process," says Rice, "but so too are the innovators and entrepreneurs who roll up their sleeves and fight the tough battles in the trenches."
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