Radical Innovation: How Mature Companies Can Outsmart Upstarts [Hardcover]

Richard Leifer (Author), Christopher M. McDermott (Author), Gina Colarelli O'Connor (Author), Lois S. Peters (Author), Rice Mark P. (Author), Mark Rice (Author), Robert W. Veryzer (Author)

Book Description

Publication Date: January 15, 2000

How many big businesses have pioneered the technologies and business models that now dominate e-commerce, personal computing, biotechnology, and wireless telecommunication? The answer: hardly any. The problem is not that executives fail to recognize the need to infuse their organizations with the kind of model-busting innovative capabilities of agile startups. It's a lack of understanding of what to do and how to do it. But now, this groundbreaking book reveals the patterns through which game-changing innovation occurs in large, established companies, and identifies the new managerial competencies firms need to make radical innovation happen. The authors define a radical innovation project as one that delivers a product, process, or service with either unprecedented performance features, or with familiar features that will enable market transformation through significant performance improvements or cost reductions. These projects are nurtured within the established organization, not skunkworks. They are not concerned with exploiting current lines of business, but with exploring entirely new ones. Based on evidence from a five-year, real time study of twelve radical innovation projects within ten major corporations-including General Electric, IBM, Nortel Networks, DuPont, and Texas Instruments - this book addresses seven managerial challenges large companies face in creating and sustaining radical innovation: dealing with radical ideas in the 'fuzzy front end'; developing new models for project management; learning about unfamiliar markets; working through uncertainty in the business model; bridging resource and competency gaps; managing the transition from radical project to operating status; and, engaging individual initiative. The authors, experts in a variety of areas such as entrepreneurship, R&D management, product design, marketing, organizational behavior, and operations and project management, distill a comprehensive, interdisciplinary approach to mastering each of these challenges, from the conceptualization of viable ideas to the commercialization of radical innovations. Designed to push the envelope of thinking about the most significant challenge facing large companies today, this important book offers a revolutionary new paradigm for long-term corporate success. Richard Leifer, Christopher M. McDermott, Gina Colarelli O'Connor, Lois S. Peters, Mark Rice and Robert W. Veryzer are all faculty members in the Lally School of Management and Technology, Rensselaer Polytechnic Institute.

Editorial Reviews

Review

"...for the would-be innovator and for the rare company that wants to encourage innovation rather than simply talk about it." -- Financial Times, January 2001

"...the authors lay out a systematic method for firms to manage this phenomenon." -- From The Industry Standard

"Radical Innovation is required reading for any manager in the management of research and development activities." -- Science and Technology, November 2000

About the Author

Richard Leifer, Christopher M. McDermott, Gina Colarelli O'Connor, Lois S. Peters, Mark Rice and Robert W. Veryzer are all faculty members in the Lally School of Management and Technology, Rensselaer Polytechnic Institute.

Product Details

• Hardcover: 261 pages
• Publisher: Harvard Business Review Press; 1st edition (January 15, 2000)
• Language: English
• ISBN-10: 0875849032
• ISBN-13: 978-0875849034
• Product Dimensions: 9.5 x 6.4 x 1.1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #764,874 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

17 of 18 people found the following review helpful:

5.0 out of 5 stars Innovation = Respiration, May 13, 2002

By 

Robert Morris (Dallas, Texas) - See all my reviews
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This review is from: Radical Innovation: How Mature Companies Can Outsmart Upstarts (Hardcover)

I think this book will have the greatest value if read in combination with Yoffie and Kwak's Judo Strategy. Why? Because the authors of that book correctly stress the importance of maximizing organizational speed, agility, balance, and leverage in any competitive marketplace. What they do not address (except perhaps indirectly or by implication) is the importance of radical innovation which, more often than not, proves to be a decisive competitive advantage. Indeed, the seven authors of the book I am about to review identify "Seven Challenges in Managing Radical Innovation" (see Table 1-1 on page 8) and meeting these challenges effectively indeed requires maximizing organizational speed, agility, balance, and leverage. Obviously, no single volume asks all "the right questions," much less provides "all the right answers." Hence the importance of carefully correlating the ideas from several different sources. I also strongly Michael Hammer's The Agenda which offers a "model" by which decision-makers in any organization (regardless of its size or nature) can determine appropriate priorities and then set appropriate objectives before formulating strategies and tactics by which to achieve those objectives.

The subtitle of this book ("How Mature Companies Can Outsmart Upstarts") reminds me of Jack Welch's comments when explaining why he admires "small and sleek" companies:

"For one, they communicate better. Without the din and prattle of bureaucracy, people listen as well as talk; and since there are fewer of them they generally know and understand each other. Second, small companies move faster. They know the penalties for hesitation in the marketplace. Third, in small companies, with fewer layers and less camouflage, the leaders show up very clearly on the screen. Their performance and its impact are clear to everyone. And, finally, smaller companies waste less. They spend less time in endless reviews and approvals and politics and paper drills. They have fewer people; therefore they can only do the important things. Their people are free to direct their energy and attention toward the marketplace rather than fighting bureaucracy."

For those who seek radical innovation in so-called "mature" companies, the challenges which the authors of this book identify are obviously much greater than they are for those in the "small and sleek" companies which Welch admires. A majority of upstarts pursue a "judo strategy" (in one form or another) because they lack the resources of their much larger competitors. (David had no chance if he wrestled Goliath.) For that reason, they cannot afford incremental innovation. They must take bold, decisive action when and where it will have the greatest impact.

When explaining what they call an "imperative," the authors of this book make a critically important distinction: "...incremental innovation usually emphasizes cost or feature improvements in existing products or services and is dependent on exploitation competencies. In contrast, radical innovation concerns the development of new businesses or product lines -- based on new ideas or technologies or substantial cost reductions -- that transform the economics of a business, and therefore require exploration competencies." This is indeed a key distinction.

Much of the material in this book was generated by the authors' research over a period of five years (1995-2000) which followed the development and commercialization activities of 12 radical innovation projects in 10 large, established ("mature") firms. For the authors, a radical innovation project must have the potential to produce one or more of these results: an entirely new set of performance features, improvements in known performance features of five times or greater, and/or a significant (i.e. 30% or more) reduction in cost. What the authors learned from the research serves as the foundation of their conclusions; also of what they recommend to those who seek radical innovation in their own organization. All of the ideas presented are anchored in an abundance of real-world experience. Although this brilliant book's greatest value may be derived by decision-makers in "mature" companies, I think substantial value can also be derived by decision-makers in the "upstarts" with which such companies as DuPont, General Electric, General Motors, IBM, and Texas Instruments will continue to compete. One final point: All of the "mature" companies discussed in this book were once "upstarts" themselves. How revealing that all of them are now so hard at work on regaining or preserving certain competitive advantages which once served them so well.

17 of 20 people found the following review helpful:

5.0 out of 5 stars GREAT Information for ALL companies - Upstart and Mature, February 12, 2001

By 

Terry Morris "SailingKnitter" (Sailing South) - See all my reviews
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This review is from: Radical Innovation: How Mature Companies Can Outsmart Upstarts (Hardcover)

Very succinct yet comprehensive. It has key advice on the marketing, finance, and people skills necessary to see a new idea advance to a great new product. This book should be required reading for all MBA students, managers, and anyone who has the dream of a great new idea but is unsure as to how to make it come real. Although the title states that the book focuses on how more established companies can create environments to promote radical innovations, the information can readily be applied to any firm regardless of length of operations - and yes, to individuals.

The authors present a list of 7 challenges that face the radical innovator and then they provide the competencies, or skills, that are necessary to meet these challenges. Throughout the text, real-life examples from well-known firms help the reader to understand how these challenges come about, and to even recognize a challenge should it present itself. The examples do tend to focus on radical innovations that are new technological products, but the recommendations could also be applied to other new ideas such as new management systems or organizational structures.

9 of 17 people found the following review helpful:

2.0 out of 5 stars Superficial and non-comprehensive book, November 9, 2001

By A Customer

This review is from: Radical Innovation: How Mature Companies Can Outsmart Upstarts (Hardcover)

Having read this book two thoughts come up:
1. They should have had much more in-depth data, why stick so much to the surface ?
2. Is their overview of ways to deal with radical innovation comprehensive ?

Seen the impressive list of authors and the impressive research they've done the book is disappointing. Maybe because they were limited on what they could disclose, time pressure etc.

To learn more about dealing with radical innovation I recommend the books 'Corporate Venturing, 'Intrapreneuring', 'Webs of Innovation', 'The Innovators Dilemma'.

So should you read 'Radical Innovation ? Well if you're active in the field it should be on your shelves, otherwise I wouldn't spend my dollars on it.