How Not to Innovate

As we all know, we're living in the great age of innovation. Of course, so did our parents. And their parents. Each generation seems to rediscover innovation -- and repeat the same mistakes, says Rosabeth Moss Kanter, a professor at Harvard Business School. Too often, says Kanter, grand declarations about innovation are followed by botched execution (Hint: don't entrust innovation to an antisocial micromanager who demands results by the next quarter). Kanter, who described these pitfalls in a 2006 Harvard Business Review article, "Innovation: The Classic Traps," tells us how avoid them.

Why do companies keep repeating the same mistakes?

Managerial generations seem to turn over at a fairly rapid rate. There's very little historical memory in companies. Every new effort starts afresh and they just assume there's nothing to learn from the past.

Does every generation think it lives in the age of innovation?

At least since I've been active in these fields they've thought so -- because it's been true! The pace of change has continued to speed up. Technology means there are more competitors in more parts of the world who learn about new ideas faster. It's harder to keep a monopoly on an idea or to operate in a protected market.

You say companies often focus on blockbusters like the next iPod or Viagra and overlook smaller, potentially more meaningful, successes. What's the psychology there?

If you can get a blockbuster, you can coast for a long time. If you can get a product that transforms the marketplace, like an iPod, you can keep taking that model and applying it in other places like the iPhone. There's a natural tendency to want to find those, except that they're rare. A potential blockbuster might be lurking in an idea that seems small at first. Companies that focus only on the blockbusters are going to miss a lot of the small ideas that might help fund the business and might later turn out to be things that truly are transforming.

Can you give us an example?

One of the companies that's been working hard on innovations of all kinds is Procter & Gamble. In Brazil, P&G was lagging in the market. They did some innovations they call "line extensions" of existing products like feminine hygiene, diapers, and laundry detergent. They were modifications of products with an awful lot of creativity that led to a bigger innovation -- a way to address lower income consumers which are the biggest growing market in countries like Brazil and most of the high growth markets of the world. These innovations literally saved the business. This became a model for the company around the world as a way to reach lower income consumers who couldn't afford the premium price product.

Can you give us an example of a company that smothered its own attempts at innovation.

Gillette had such a blockbuster with its razor shaving systems that many people there forgot to enrich, renew, and innovate in the other areas. They sort of coasted. When companies start sliding downhill, the people go passive. When Jim Kilts came and led the turnaround, they not only innovated in the shaving systems but also got much more innovation from all of the other divisions. It was quite a dramatic change. People came forward with ideas they thought were too small or no one had listened to before. One way you shut down innovation is by pretending that nobody else but top management ever has a good idea.

Who else does it right?

The danger in naming companies doing it right today is, that's looking back, and they could just as easily stumble tomorrow. We clearly have to say Google is doing it right. Google built off its original technology and became very popular because of the ease of use, great name, great branding. And they continued to innovate. They figured out Google could be the place for advertising, and offer a range of services. They've got a culture where they believe they only hire the best people, and I think they probably do. People think everybody in the company is incredibly smart and listens to their ideas.

Is the image of the hermit inventor obsolete?

Individual innovators don't have to pretend they're the genius doing it all by themselves. In fact, that's one of the things that gets you in trouble. There was a time when many companies thought innovators were mavericks who should be in the basement so they didn't contaminate the rest of the company. That myth was shattered when we saw that innovation takes an awful lot of teamwork.