Tuesday, May 29, 2012

Innovation and Auto-Immunity

Success breeds its own orthodoxy.  When an innovation defies the odds and not only survives but succeeds, it is perfectly natural to want to continue that success by perpetuating what is believed to have contributed to the success in the first place.  What those contributing factors were, however, may be more subject to multiple interpretations and perceptions than some might first admit.  This is where the next “orthodoxy” starts to sneak in.

We have been working with a company recently whose success has attracted many competitors on the outside.  Success has also required internal attention and effort to order, control and focus the innovation-born success on the inside, the need for which is not unrelated to the intensifying competition on the outside.  The dilemma facing this post-entrepreneurial stage company now is how to protect, defend and perpetuate its success while at the same time continuing to fulfill its vocation of providing innovative value to current and new consumers.  Sound familiar?

As whole companies or even product divisions seek to extend their success, they naturally develop “immune systems” designed to maintain the health of the organization.  Just as our physical health depends upon a robust immune system – a complex network of cells and molecules that normally work to defend the body and eliminate infections caused by bacteria, viruses and other invading microbes – business “fitness” depends to some degree on a corporate immune system.  These corporate “immune systems” can be comprised of a complex set of management attitudes (e.g., focus), decisions (e.g., resource allocations) and controls that serve to protect, defend and perpetuate the value proposition for customers and the resulting profits for the corporation.

However, when organizational fitness becomes more important than business fitness, orthodoxy can set in, creating conditions for the corporate “immune system” to attack the corporation’s own innovation efforts, mistaking these efforts as threats or “antigens.”  Just as immune cells can mistake our bodies’ own cells as invaders and attack them, internally developed or externally sponsored innovations can elicit “friendly fire,” in some very subtle ways.  In other words, well-intentioned and otherwise necessary corporate “immune systems” can sometimes unintentionally turn on the host and become what the medical profession refers to as “autoimmunity.”

“Corporate autoimmunity” frequently happens when the organization’s own need for order becomes more important than its purpose of providing (new) value to customers or consumers.  A classic example of an “autoimmune” response to an early stage innovation effort is when a large corporation seeking to innovate disqualifies an effort based upon size of market.  “We are only looking for billion dollar businesses,” failing to remember that the billion dollar business they are currently defending once started with relatively small and more humble beginnings.

Clayton Christensen points to four subtle, but deadly “autoimmune” responses to innovation in his new book The Innovator’s Solution.  Christensen says there are at least four reasons in established companies that cause managers to target innovations that are not aligned with the way that customers live their lives (page 86).  “The first two reasons – the fear of focus and the demand for crisp quantification – reside in companies’ resources allocation processes.  The third reason is that the structure of many retail channels is attribute [rather than customer] focused.  The fourth reason is that advertising economics influence companies to target products at customers rather than [their] circumstances.”

In other words, both internal (e.g., resource allocation) and external (e.g., comparisons to competition or conformity to the way retailers organize their aisles) orthodoxies that grow up around attempts to perpetuate an innovation’s success, frequently cause us to take our eye off the “ball” of opportunity – what Christensen describes as a “sharp focus on jobs that customers (or consumers) are trying to get done.”

Might this be the place to discover “heresy” with which to break out of the orthodoxy of success and start the next innovation in new value to customers?

This article was originally published in Innovating Perspectives in November 2003. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270.    

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