Avoiding Innovation’s Dark Side

Innovate or die. It’s a familiar refrain, and one that echoes pretty loudly, particularly in technology companies and startups.

When innovation springs forth from your business, it can lead to success. Think about devices like the iPhone and iPad, which keep Apple’s coffers full. Being labeled an innovator is a badge of honor.

Yet innovation can be a double-edged sword, claims Dr. Ankush Chopra, a professor of innovation at the Fribourg School of Management, Switzerland, who is “passionate about innovation and business transformation,” he tells Small Business Computing. Armed with a Ph.D. in Strategy from Duke University and with years of experience helping firms like Citibank and Proctor and Gamble manage transformation, he explores how innovation can propel a company to new heights, or wreck it, in his book The Dark Side of Innovation.

“These innovations can punish the innovator and non-innovator alike, unleashing a paralyzing force on firms that pushes firms towards destruction,” he states.

Remember Kodak? Once the company to beat in film, optics and photography, Kodak practically stood immobile when digital imaging technologies took off.  “Every Goliath behaves like a deer in the headlights,” says Chopra, giving an opening to the clever David.

Don’t succumb to the dark side of innovation. Here are Chopra’s tips for stepping into the light.

3 Steps to Successful Innovation

1. Avoid the Two-option Trap

When an innovation rocks the business landscape, some companies get hopelessly stuck. Business leaders become afflicted by cognitive barriers to innovation that prevent them from capitalizing on the new status quo, says Chopra. They often ignore upstarts or, worse, they may attempt to maneuver through unfamiliar new territory using the “rosy lens of their past success.”

Typically, when a competitive threat arises—a new invention, free software or a completely new way of doing business—company owners feel that they have only two choices. You can either “embrace the innovation and deliberately destroy your profits, or avoid it,” he observes.

When faced with two bad options, people tend to avoid making a decision, which dooms them. Look for a third option. How? Glad you asked.

2. Cultivate Imagination

If you’re thinking of fighting fire with fire, “innovation is not enough,” warns Chopra. Many a company has tried to “innovate furiously toward bankruptcy.”

You may already hold the answers to continued success without realizing it. Chopra laments that Kodak sat on valuable intellectual property pertaining to printing technologies—”the keys to the kingdom” as he puts it—while the company circled the drain. By the time the company attempted to properly leverage its printer technology, it was too late. It missed its chance to be the HP of printers, which could have helped keep the lights on.

In contrast, Swatch sprouted from a moribund industry to become a cultural phenomenon and rake in the sales. After the arrival of quartz-based timekeeping technology decimated the Swiss watch-making industry in the 1970’s and 80’s, Swatch reinvented the wristwatch.

“No longer was it a timepiece, it became a fashion accessory,” says Chopra. Consumers ended up buying multiple watches to suit their tastes, match their outfits or to simply stand out. That the watches could tell time was a bonus.

“Imagination trumps innovation,” encourages Chopra. Look for imaginative, perhaps non-obvious ways of applying your company’s expertise in the face of new competitive threats.

3. Manage and Avoid Blind Spots

There’s a vicious paradox affecting business leaders. Although many readily acknowledge the need to have a broad vision for their companies, they are rewarded (in the short term) for their intense focus in competitive environments, akin to the tunnel vision developed by “a race car driver driving at 200 miles per hour,” says Chopra. If your attention slips, you risk a crash.

The trouble is that while you’re not looking, innovators can overtake you.

Devote part of the organization to innovating broadly, suggest Chopra. Entrust “someone who can look at all the broad points,” keep an eye on the horizon, spot opportunities and give you a heads-up in time for you to course correct.

A seemingly harmless burst of innovation that erupts far away can overtake your business in time. “Invest a small amount of effort to create a tsunami alert for your business,” advises Chopra.

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

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