Making Innovation Work

Your article on Bell Labs innovation ("Mad Scientist," February) was spot-on. The notion of approaching innovation systematically and being ruthless about the allocation of resources to it (plus ensuring that the established businesses keep their mitts off of it) is one that is corroborated by years of my own research at Columbia Business School.

Many companies that muffle innovation make some very simple mistakes:

1) Innovation (or new business development or corporate venturing or whatever you call it) is a flavor-of-the-month sort of thing. There's no consistent advocate; the process moves in fits and starts, and just as you are actually learning something, an urgent crisis causes the program to be shut down.

2) Launching a major new business is seen to be the only legitimate goal of innovation. Sure, that's great, but my colleagues and I have learned that the real benefit of innovation is often to keep your company on top in fast-moving core markets. Other benefits include patentable ideas, development of innovative people, spin-offs with economic value, and valuable learning that can lead to a success the next time around.

3) The role middle managers play in the innovation process is ignored. These folks and their networks are often the first to hit the chopping block in a corporate downsizing, but without them, innovation comes to a crashing halt.

4) Conventional disciplines -- financial benefits, career rewards, performance reviews, promotions -- are applied to uncertain new businesses. Our thesis in a forthcoming book is that established companies have most of what they need to innovate and grow, except for the right disciplines.

Rita Gunther McGrath
New York, New York

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