You’ve got one chance, so you’d better make it good. That, ladies and gentlemen, is what Vijay Govindarajan and Chris Trimble, both profs at the Tuck School of Business at Dartmouth, say that you have when it comes to making a “strategic innovation” in your organization. Why just one? Because “They remain unprofitable for several quarters or more and thus are too expensive to repeat.”
So, when faced with that—a roll of the dice, from one point of view—you might ask yourself why an organization would even think about getting into the strategic innovation arena. It’s rather simple. Because any company, the authors explain, gets to a point where it is the only way for growth. Consequently, “the long-term survival of a company depends on it.” In other words, it is a do-or-die situation. What makes doing this sort of challenge all the more daunting is that chances are there is no one in your company who can tell you just how to go about developing and implementing a strategic innovation due to the rarity. If you accept those premises, then 10 Rules for Strategic Innovators is all the more valuable, in that if getting into that arena is as risky as they posit and if there is no one who can tell you how to avoid the lions, tigers and bears that are seemingly attendant with the undertaking, then having these rules is essential.
What’s interesting is how the authors set up “NewCo,” the company developed for the strategic innovation, and “CoreCo,” the company from which it emerges. There is give-and-take, ideally, between the two. NewCo needs the resources that CoreCo has; CoreCo needs the fresh new business that NewCo can bring. But one of the dangers is that there are people within CoreCo who know what made it successful so “They naturally create value propositions that are similar to what they already offer, and they naturally try to use or re-create existing processes.” Which is fine if you’re going to do what you’ve always done, but if doing that is like drilling a drying hole, then what’s the point? Clearly, “a different business model requires different competencies,” so those existing value propositions and the means of delivering on them are wholly insufficient if an organization is going to attain new sources of wealth.
Although the book is engaging and full of interesting examples from the real world (OnStar is a strategic experiment that, as they point out, could have gone awry), reading the book is one thing, performing what they counsel is still another. As they point out, “It is not the idea that counts; it is what you do with it.”—GSV