Strategic Innovations

Knowledge of the genetic code is knowledge of the fundemental ruls that guide human behavoiyur. Simliary , management researchers seek an organization code - a set of rules can reduce dysfunctions, sustain growth and lengthen the average coproate life span beeyound that of a normal human life cycle. The Code that enables is "Strategic innoivations" : a process of exploring ideas and delivering value as an end result.

Rule 1

• In all innovations the great idea is only chapter 1.

Building breakthrough business process requires forgetting borrowing and learning. These central challenges demand more then just talented and ambtious leaders,; they requir leveraging the power of the organizational DNA.

Rule 2

• Sources of organizationl memory are powerful

Organizations natually cling to corre Business Orthodoxy, even when moving ino new envorinemtes. But new business proposistions need to operate in fundamentaly different ways.

Rule 3

• Large and established companies can beat start-ups.

Several of the strategic experiments studied have found a long list of make or breaks of unknowns. Challenges were intensified because the large businesses required that they make those one time bets to. They have the resources and the potential for profits is high then what the start-up can envision.

Rule 4

• Strategic expriements face unknowns

No Amounnt of research of these unknowns can resolved before the business is luanched. Therefore, success depends more on on ability to experiment and learn than on the inital strategy.

Rule 5

• The new Business organizations must be built from sctrach.

Buidling from sctach includes choices in staffing, strcuture , systems and culture. This is the only way to defeat the powerful forces of institutional memory.

Rule 6

• Managing tensions is a job for Senior Management

The health between new Business and Core Business deterirates easily. There are several natural sources of tension, driven by dynamic forces. This attribute is particualary the demand and supply of capital within the organization.

Rule 7

• New Companies need its own planing process

The Core business norms for evaulating business performance will disrupt the new business learning and performance. In effect the foucs on gross margains causes delays in learning.

Rule 8

• Interest, influence , internal competetion and politics distrupt the new Business.

To ensure learning , one must take a disciplined , detached and analytical approach to making predications and interpurating differences between prediciations and outcomes. Discussions of a new business and core business divsions does not belong in the same room at the same time.

Rule 9

• Hold New Business acountable for learning not results

you can achieve accountablity for learning by insisiting on a disciplined learning process. Accountablity for results against plan, while simplier to practice, is counerproductive.

Rule 10

• Companies can build capacity fo breakthrough growth through strategic innoivations

Skills in forgetting, and learning are the foundations. Managers must start to build these skills early in the companies life.

Sources : From Ideas to Exuction. - Vijay Govindrajan and Chris Trimble

Harvard Business School