Strategic Innovation

Today I was at IIM A to attend a talk by Vijay Govindrajan a Professor of International Business at Tuck School. The talk was on "10 rules for strategic innovation". He is an interesting speaker. One thing that struck me at the first sight was his shining bald head (signifying great intellect, my perception) and his twinkling eyes showing his enthusiasm to address the audience. One more thing that impressed me most was his punctuality.

Coming back to the topic of the day, his talk was mainly concerned with how companies should handle the strategic innovation in the face of disruptive innovations which threaten the existence of the companies. An example he sighted was of Encyclopedia Britannica and Microsoft Encarta. How, Britannica failed to realise the shift in the business dynamics and became marginalized from its position of strength. Same phenomena applies to Ford's failure in the Indian market. They failed to understand the market and applied the same yardstick as American market.

One thing he says he is betting on is how the Indian and Chinese markets and how the products developed for these markets in the next 15-20 years will change the way business is done across the world. Another example that struck me was how the different styles in high jump have pushed the bar higher and higher. Though the business remained the same over a century, the disruptive ways of crossing the bar have changed the whole game.

The other thing he makes it a point is to Think Different, how iPod with its different take on the digital music has changed the whole digital music market for ever. All companies focus on their present, which of course they must. However, at the same time they should invest in their future. One more example was Xerox. Xerox had a thriving business of copiers. They had a great clientèle in the fortune 500 companies. They built a great fortress around them making it literally difficult for any company to challenge their position. IBM, Kodak those with big pockets failed, but a small company at that time Canon made a dent with totally a different approach by hot ballooning into Xerox's fortress. Xerox fell to their own strengths.

He asks the companies to set unrealistic goals and fall short of them than set realistic goals and do marginally. The other thing he ask companies is to not to defend their rules, but to create new rules. One more things that greatly struck me was the bottom up approach as opposed to the top down approach. The doers at the bottom of the ladder are the closest and first to notice the disruptions.

The talk of one hour was very interesting and engaging. What ever he said in the lecture was not very new, but as they say in marketing it was old wine in new bottle. Sometimes it becomes necessary to repackage the old stuff to stay relevant (a disruption in its own right).

My personal theory which fits in here is "Catch Them Young", tomorrows disruptions are caused by todays young, so keep a keen eye on them. They will define yours and your companies future.