Beyond the Champion: Institutionalizing Innovation Through People by Gina Colarelli O’Connor Andrew C. Corbett & Lois S. Peters

Author:Gina Colarelli O’Connor, Andrew C. Corbett & Lois S. Peters [O’Connor, Gina Colarelli]
Language: eng
Format: epub
Publisher: Stanford University Press
Published: 2017-04-10T04:00:00+00:00

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ACCELERATION ROLES

Acceleration is the capability to scale a business that appears to have great promise and a demonstrated path to profitability but does not necessarily conform to the culture and operating routines required of any of the company’s ongoing businesses. It’s the exciting time of growth in a business that should be viewed as one of the bright stars for the company’s future. Acceleration typically requires intensive levels of investment in capital equipment, personnel, and marketing. We’ve moved beyond exploring and experimenting to focusing and responding to the market and scaling production. New types of uncertainties plague the business now . . . those associated with an ability to scale. In addition to uncertainty, now we face greater risks as well, given that higher levels of investment are on the line. That is why incubation is so crucial; if done right, it provides us with the confidence needed to undertake acceleration.

An accelerating business has been incubated to the point of having first customers, and is likely experiencing inquiries from other potential customers as the market begins to understand the value the innovation can provide. They are delivering product in small quantities, primarily for the purpose of confirming the value proposition and identifying new performance attributes that the market finds valuable. The new business platform now moves toward becoming a full-fledged business and needs leaders of each function (i.e., heads of engineering, marketing, sales, purchasing, etc.) and a general manager. As one innovation veteran described it, “In a project, you can still have project organizations. But the minute you sell to the market, then all the functions of a regular business are needed.”

Innovation is still happening in acceleration—breakthrough innovation, in fact. But rather than focusing on the product and features, focus tends to shift to operational process and organizational innovation. Important challenges accelerating businesses face include reducing costs, increasing yields, debugging systems, instituting financial and IT systems that enable the new business’s operating model, scaling the number of personnel, and confirming how and where this new business will fit within the company’s current organizational structure.

We have seen the value proposition change completely during acceleration, because sometimes the process innovations that occur as the emerging business is scaling enable new functionality or unexpected cost-performance outcomes. Alternatively, scaling presents so many new problems that the company decides to halt its investment. The point is, there is still risk and uncertainty in acceleration. For this reason we caution senior leaders against incorporating acceleration into the ongoing lines of business, but instead to take it seriously as a capability within the innovation function and recognize that it still needs to be managed differently from traditional new product introductions.

To illustrate, we start with a story that illustrates the risks that exist with strategic innovation, specific to this most crucial and expensive acceleration phase. The story focuses on decisions and assumptions made within an emerging business team as it faced somewhat typical acceleration challenges.

THE EVAPORATING VALUE PROPOSITION

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