Strategic Innovations

Knowledge of the genetic code is knowledge of the fundamental rules that guide human behavior. Similarity , management researchers seek an organization code - a set of rules can reduce dysfunctions, sustain growth and lengthen the average corporate life span beyond that of a normal human life cycle. The Code that enables is "Strategic innovations" : 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 require leveraging the power of the organizational DNA.

Rule 2

• Sources of organizational memory are powerful

Organizations naturally cling to correct Business Orthodoxy, even when moving in new environments . But new business propositions need to operate in fundamentally 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 experiments face unknowns

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

Rule 5

• The new Business organizations must be built from scratch.

Building from scratch includes choices in staffing, structure , 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 deteriorates easily. There are several natural sources of tension, driven by dynamic forces. This attribute is particularity the demand and supply of capital within the organization.

Rule 7

• New Companies need its own planing process

The Core business norms for evaluating 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 competition and politics disrupt the new Business.

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

Rule 9

• Hold New Business accountable for learning not results

you can achieve accountability for learning by insisting on a disciplined learning process. Accountability for results against plan, while simpler  to practice, is counterproductive.

Rule 10

• Companies can build capacity fo breakthrough growth through strategic innovations

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

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

Harvard Business School