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The Inside and Outside View of Innovation

March 19, 2013 | Alden M. Hayashi | Workplace, Teams, & Culture

How can companies ensure that a promising initiative receives the necessary resources? And why do so many brilliant inventions fail while other seemingly mediocre offerings succeed? Such questions are addressed in two recent books — Unrelenting Innovation: How to Build a Culture for Market Dominance, by Gerard J. Tellis and The Wide Lens: A New Strategy for Innovation, by Ron Adner. The first book concentrates on a company's internal workings, while the latter focuses on its external environment.

In Unrelenting Innovation, Tellis asserts that the single most important driver of innovation in any organization is its culture, and he cites three organizational traits important for innovation: a willingness to cannibalize existing products, a risk-taking attitude and the ability to focus on the future. Many companies have a hard time commercializing radical innovations, Tellis notes, because these would hurt the company's existing products. To counter such tendencies, Tellis offers three practices: providing the right incentives, fostering internal markets and empowering "innovation champions" within the organization.

The overarching theme of The Wide Lens is that many products do not succeed or fail by themselves.

Instead, their fates are ultimately determined by the support they receive from external parties. "The light bulb on its own," writes Adner, "was a miraculous invention but needed the development of the electric power network to turn it into a profitable innovation." Because external support is crucial, executives need a very broad perspective — "the wide lens" in the book title — to ensure that their innovations become commercial successes. Adner is able to deconstruct a company's external environment to look specifically at two types of important parties: those needed to develop complementary products or services (co-innovation) and those needed to adopt an innovation before the end customer can fully appreciate its value (the adoption chain).

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