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Built for Innovation

By Stephen Wunker, George Pohle

On Wall Street Innovation Rules. Just look at Google's three-year sprint to $200 billion in market capitalization and Nintendo's miraculous makeover. Thanks to an innovative new videogame console, Nintendo has become Japan's third most valuable company. Now bankers say that innovative little Facebook is worth up to $15 billion despite its short operating history.

But for each of these success stories there are thousands of others struggling to replicate the "innovative" DNA enjoyed by outfits like Apple and Google. Why do innovation efforts fail? We might expect individual innovations to fail—innovation is risky. However, that does not explain why companies often pull the plug on broad campaigns to accelerate innovation, sometimes after only short periods of time. Frequently, companies try to copy outstanding innovators, but the efforts never catch on, quickly become moribund and end up engendering cynicism.

Research by IBM Global Business Services, Innosight and the benchmarking organization APQC has shown the fallacy in the assumption that successful innovation will come simply by replicating the approach used by successful innovators. A survey of 90 companies across a variety of industries and 14 countries shows that the sourcing, shaping and implementation of ideas at innovative firms tends to conform to a small number of innovation archetypes. These different "builds" represent a self-reinforcing combination of culture and operations. Google is representative of one of those models, but only one. Because there is no single archetype of innovation, companies get into trouble by trying to replicate characteristics that are not "natural" to their own business. Instead, firms should recognize the benefits of the innovation model they inhabit, compare themselves to others using a similar approach and borrow selectively from other categories.

IS YOUR COMPANY BUILT FOR INNOVATION?

Read the full article on Forbes

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