In the organizational context, innovation is often linked to positive changes in efficiency, productivity, quality, competitive positioning, market share, etc. Some will flourish under its influence. Other will die. Startups that do not compensate effectively for innovative forces (mainly from outside) may be destroyed by those that do.
- Innovation leaders burst onto the scene, win early market leadership, but sometimes can’t sustain the pace.
- Fast followers often jump in later and make fortunes. AltaVista ->Yahoo-> Google
- Innovation leaders are sometimes acquired by larger players before they have a chance to evolve
- Sometimes it all boils down to timing and luck
- Innovation and Competition go hand in hand. Innovate and stay on top of the chain
- Big companies that shield their customers from innovation will soon loose them
- There are always a combination of factors that determine who becomes an innovative leader and a fast follow
- Other times: technology is outstanding but the management not so good.
- Management optimizes around protecting their existing business and fails to recognize and react to disruptive threats. Myspace->Facebook ->Google+?
- The PC revolution(Market share):IBM->Compaq->Dell ->HP->Mac.
- Fast followers continue to innovate far beyond the original idea or feature set and have maintained market leadership. Google
- Anyone who has worked in a start-up knows the difference in attitude, culture, stress, creativeness, risk taking from what exists at old established companies. Innovate or you will be overtaken by a fast follower.
Lessons for entrepreneurs;
- Never stop innovating
- Build a well rounded management team early
- Value sales and marketing talent as much as technical talent
- React quickly to disruptive technologies or business models
- Don’t be too proud to imitate when it makes sense
