Summary of Creative Construction

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Rating

9

Qualities

  • Well Structured
  • Background
  • Concrete Examples

Recommendation

Complex structures, inertia and politics obstruct innovation at established companies. Some consultants even recommend that successful companies focus on their core business while keeping a watchful eye on start-ups so that they can snatch them up when their innovations begin to take off. But innovation strategy expert and Harvard professor Gary P. Pisano recommends keeping it in-house: The right strategy, system and culture, he says, can enable even established firms to make innovation feasible.

About the Author

Economist Gary P. Pisano, PhD, teaches business administration at Harvard Business School and is the author of several books on innovation, strategy, manufacturing, and competitiveness – including Science Business and Producing Prosperity.

 

Summary

Even large companies can be innovative with the right innovation strategy when coupled with matching internal processes and a reinforcing culture.

Austrian economist Joseph Schumpeter (1883–1950) wrote that large organizations are “vulnerable to the gales of creative destruction.” Schumpeter explained that large corporations were usually designed for one purpose only and were unable to adapt when that purpose was no longer timely. For that reason, he concluded, even successful companies were unable to keep up with the speed of innovation that had made them successful in the first place.

Indeed, many large, successful innovators – including Xerox, Nokia, Sun Microsystems and Yahoo – became stagnant along their journeys and allowed competitors to surpass them. Some experts argue that the size of successful organizations stands in the way of transformative innovation.

But business leaders in large corporations can enhance innovation capacity by 1) crafting an “innovation strategy” that helps streamline and prioritize their innovation efforts; 2) assembling an “innovation system” that aligns talent, processes, structures and behaviors with that...


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