Tag Archives: AT&T

Thought Sparks – Episodic Innovation

Raise the curtain on Innovation Theater yet again!

Episodic Innovation

GUEST POST from Rita McGrath

We know that to create meaningful innovations that can move the needle for the companies that sponsor them, attention, resources and commitment needs to be sustained. But in too many organizations, innovation gets started, gets some traction and – just at the brink of discovering something useful – gets cut. Welcome to the world of innovation theater.

Layoffs are in the air

Predictably, firms that spent like drunken sailors during the low-interest-rate free-for-all that we’ve just been through are now reconsidering their spending as the economy looks a little soft, inflation has become a thing and investors are asking for — egads — a route to profitability!

We have seen this movie before, and it is one of the most devastating patterns that afflicts internal corporate venturing, or ICV. It’s worth bringing back some original research by Stanford’s Robert Burgelman and his colleagues to understand it.

The mystery of corporate innovation cycles

Years, ago, Robert Burgelman and co-author Liisa Vilikangas came to a perplexing conclusion. Despite all the talk about innovation, all the energy and money thrown at it and all the noise about accelerators, studios and labs, companies find it extraordinarily difficult to stick to an innovation program.

Indeed, as they observe in this article, “many major corporations experience a strange cyclicality in their ICV (Internal Corporate Venturing) activity. Periods of intense ICV activity are followed by periods when such programs are shut down, only to be followed by new ICV initiatives a few years later. Like seasons, internal corporate venturing programs begin and end in a seemingly endless cycle.”

They identify two influences on how an innovation process can come to grief. The first predictor is how healthy the existing core business is in terms of growth prospects. The second is how much a company has in terms of uncommitted resources – whether that’s cash or people. What you get when you juxtapose the two is a lovely 2×2:

Corporate venturing orphans: With plentiful resources, people get resources to start new ventures, only to find that the core business is quite happy to ignore them. So, things get going, develop for a while, then wither on the vine as the core business essentially refuses to welcome them into the corporate fold.

The entrepreneurs behind such ventures either give up in frustration, leave to find a firm with a more welcoming environment or even leave to found a startup that might well compete with the original firm. The interesting story of how Zoom became Zoom is a case in point.

All-out venturing drives: In this situation, there is money to invest, company leadership knows it has a problem, and venturing becomes the holy grail. This can be useful, as it tends to raise the profile of the venturing activity and it finally attracts attention, talent and a seat at the table.

The dilemma is that senior leadership teams in a hurry are apt to put too much time pressure and expectations for rapid growth on a still-uncertain activity. This can cause them to lose faith in its prospects and terminate it before it even has a chance. IBM and Maersk’s effort to create a blockchain platform, TradeLens, feels like that to me. That venture also ignored Bent Flyvbjerg’s excellent advice to avoid complexity to the extent possible.

Venturing seems irrelevant: Here, money and talent is already committed to other things, and the core businesses’ chances are looking pretty good. So why bother with an uncertain, unproven, hard to predict new business activity when you can just ride the existing gravy train, probably for as long as is relevant for the career of a given senior leader?

What happens in this situation is that investments in new capabilities are ignored, and eventually competition catches up or makes your existing operations irrelevant. For instance, Carlson Travel was riding pretty high for a while, and evidently under-invested in technology. Carlson Travel implicitly acknowledged as it struggled through a bankruptcy that it had under-invested in its core digital technologies and customer experiences and promised to spent $100 million on getting up to speed.

Desperately Seeking Corporate Venturing! Ok, so we’ve left investing in the future too late, money is now tight, and we need to deliver something to our customers and investors PRONTO! These situations rarely end well. A desperate senior executive team might well enter into ill-considered acquisitions or now, belatedly, fund the one or two ideas that have survived being neglected.

These are often terrible ideas. See: checkered history of mainline telecom or cable companies entering the content business. AT&T’s misadventures with its forays into the media business are a case in point. Verizon’s as well. Desperation seldom leads to cool-headed deal-making or venturing. A rare exception took place at Xerox Parc, where the invention of the laser printer saved the company after the government forced it to essentially give away its patents to other firms.

It doesn’t have to be this way!

In the next Thought Spark, I’ll describe what we think about all this at Valize, my sister company whose mission is to create predictable and reliable innovation and growth capabilities. In the meantime, please stop pouring money into innovation theater!

Or if you are really itching to start an innovation or transformation program, mail us at growth@valize to set up a time. We can get you off on the right foot. After all, there are no standing ovations for innovation theater.

Image Credits: Unsplash, Pexels, MIT Sloan Review, www.collectivecamp.us

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Can Microsoft win the Android and iPhone Haters?

Can Microsoft win the Android and iPhone Haters?Nobody, including people inside Microsoft, would argue with the fact that Microsoft beat Google and Apple to the Mobile OS marketplace, but lags them both in terms of market share.

According to Wikipedia, the IBM Simon was the world’s first smartphone and was released to the world nearly twenty years ago. This means that the smartphone market is yet another example of a market where mass adoption has lagged behind initial product introduction by 20-30 years. For the inventor audience this is important to note, because it shows that #1 – innovation takes time – and #2 – that being first is no guarantee of being number one in the market when mass adoption arrives.

Well, mass adoption in the smartphone market is now upon us.

The only question is – which operating system maker will dominate the golden years of the smartphone market?

Will it be Apple or Google?

Or do Microsoft and RIM have a change to counterattack and make themselves relevant again?

Invention does not guarantee innovation. Innovation requires that you create value above every existing alternative and that you achieve wide adoption. The reason we often see changes in the leadership of the marketplace of an emerging innovation is that often the market creator does a worse job than new entrants of adapting their solution offering for the evolving desires of the customers. New entrants generally see an opportunity to solve problems that the incumbents don’t, and an create new value that the incumbent solutions don’t deliver.

But can an incumbent react to newer entrants and rebuild momentum in the marketplace?

Motorola’s revitalization in mobile handsets shows that a competitive response focused on leadership instead of reaction can in fact get you back in the game.

So can Microsoft do the same thing and steal share from Apple and Google in the smartphone OS market?

The answer lies in whether Microsoft can do a better job than Apple or Google (or even RIM) of understanding why people hate their current smartphones, while also anticipating:

  1. What the needs of customers will be in 6-12 months
  2. What customers will want in 6-12 months
  3. What emerging technologies will make possible in 6-12 months

Timing is one of the key components to successful innovation. You can invent things at any time, but you can only turn an invention into an innovation when customers and other parts of the value chain can see the value and are ready to accept it. Whether customers and the value chain can see the value is of course dependent on how well you translate for them how a potential innovation will fit into their lives.

Can Microsoft and Nokia come up with the answers that the marketplace will accept in 6-12 months? Are their existing phones the right answer for customers now?

I don’t know. But I can tell you that I hate, absolutely hate, the Google Android operating system on my Samsung Galaxy S. The Samsung device itself seems relatively well-designed but the Google Android OS is always crashing, doesn’t make smart use of the SD Card (the internal memory is always filling up), and leaves me constantly frustrated.

I bought two Samsung Galaxy S phones on T-Mobile over two iPhones on Verizon or AT&T for my wife and I, because they will cost me $1,000 less over the two-year commitment.

I can tell you with certainty that my next smartphone when I’m eligible for an upgrade will NOT be a Google Android phone. At the same time I know people who hate their iPhones and their Blackberries as well, so this represents an opportunity for Microsoft to convert disgruntled iOS, Android and Blackberry customers. Plus, there are a still a lot of people without a smartphone that will buy one in the next 6-12 months.

These two market dynamics represent a huge opportunity for Microsoft to get back in the smartphone OS market. The only question is:

Will they take advantage of this opportunity?


Article first published as ‘An Opening for Microsoft and Nokia?’ on Technorati.

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