5 Innovation Styles for Organizing the Innovation Process

1
5 Innovation Styles for Organizing the
Innovation Process
The Cauldron
The PacMan
The Fertile Field
The Explorer
The Spiral Staircase
2
The Cauldron
Unleash entrepreneurial energy in a concentrated
mixture of talent, ideas and resources

• Key Levers
• Internal markets for new ideas
• Venture capital model of internal entrepreneurs
  seeking funding from both internal and approved
  external sources
• Use of peers, rather than bosses, to screen and
  evaluate opportunities
• Loose structure and frequent organizational
  changes
• Example Enron
• You cannot control the atoms within a nuclear
  fusion reaction. We allow people to go in which
  ever direction that they want to go. And theyre
  incented to do all the steps of innovation
  themselves. And around that, we put broad
  risk-reward controls. Ken Rice,
  Enron Capital Trade Resources

3
The Fertile Field
Cultivate and harvest a rich portfolio of
strategic assets and core competencies

• Key Levers
• Manage the overall portfolio of core competencies
  and strategic assets
• Bring people together across organizational
  boundaries to share information and discover
  opportunities
• Create mechanisms that gather, disseminate, and
  track new ideas and learnings for all employees
• Determine when and if to spin off a growing
  business
• Examples
• Emerson Electric (Growth Process)
• Royal Dutch/Shell (Gamechanger)
• Lucent Technologies

4
The Spiral Staircase
Continuously improve and innovate in the core
business

• Key Levers
• Create a profound sense of core purpose
• Let everyone know their innovation contribution
  is important
• Give teams the leadership and autonomy they need
  to win
• Create a culture of experimentation and
  commitment to learn
• Examples
• Charles Schwab
• British Airways
• Allstate (BVP Process)

5
The PacMan
Acquire successful innovators and integrate
competencies into existing businesses

• Key Levers
• Use strategic intent to guide the entrance into
  new markets and development of new competencies
• Develop alternatives early in the innovation
  process
• Take stakes in promising start-ups, using the
  market as a screen
• Assess competitive responses to strategy
  innovations
• Examples
• Cisco
• Microsoft, WorldCom

6
The Explorer
Unleash entrepreneurial energy in a concentrated
mixture of talent, ideas and resources

• Key Levers
• Aspire beyond what seems possible
• Design and carry out effective and low-cost
  experiments
• Use Strategic Intent to guide the entrance into
  new markets and development of new competencies
• Emphasize continuous, cumulative learning
• Examples
• Monsanto (15 years to shift from chemicals to
  life sciences)
• Corning (12 years to develop optical fiber)
• Motorola (10 years to develop cell phones)

7
Characteristics of Various Innovation Styles
Is the primary focus to...
Develop new rapidly
Improve on existing business?
Cauldron
Do you need new assets and competencies?
Leverage existing over time
Near term with defined market?
Fertile Field
How well defined is the opportunity and how long
will it take?
Create new businesses?
Long term with undefined market
Acquire in marketplace
PacMan
How can you best develop new assets and
competencies?
Develop internally
Explorer