Innovation Has Deep Roots That Require Constant Tending


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management education with the disciplines of engineering and science. Within organizations, executives must do more than just honor this or that breakthrough: they must insist that the implementation and execution of good ideas is just as important as the inventions themselves.

Indeed, as well-regarded business professor Clay Christensen has elegantly noted, one of the problems of industry is not that it is poorly managed—it is that it is too well managed. Technological innovation counts in the early days of a company’s life cycle, but then it becomes part of marketing; eventually, every company seems run by financial masters. The great companies have balance—manufacturing, marketing, finance, distribution. But the companies that succeed are those that use innovation to build agility everywhere. While no company has true sustainable competitive advantage, the only way to even achieve temporary advantage is a reward system that meaningfully honors innovation.

While General Motors, Ford, IBM, Microsoft, and AT&T were all the innovators of their day, the business world is comprised of Attackers and Defenders. Defenders have a brand, a strong balance sheet, and customers, and the odds are in their favor. Attackers may lack these advantages, but they have innovation on their side. Indeed, today’s Defenders were themselves once Attackers.

Which brings us back to Great Britain. That nation once led the world in textiles, only to lose its lead as competitors innovated with better products and production. The same was true with its automobile industry. Despite its first-rate universities, lots of capital, and other advantages, the progeny of those British tradesmen are standing around while Germany remains the power of all Europe.

Georges Doriot, who founded American Research and Development, this nation’s first real venture firm, stressed that innovation must be more than episodic—it must be ingrained in the culture and institutionalized in organizations. “Somewhere, someone is building a better system than yours,” he cautioned. “Don’t let them get there first.”

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Howard Anderson is the founder of The Yankee Group and co-founder of Battery Ventures. He currently holds the William Porter Chair of Entrepreneurship at the MIT Sloan School of Management. Follow @

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