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5 09, 2018

Is Sunk Cost Thinking Dooming Your Innovation Portfolio?

By |2018-09-05T16:00:14-08:00September 5th, 2018|Blog|0 Comments

Photo: Manivasagan N, https://www.dtnext.in

I’ve written many times that portfolio management is about change: changing attitudes, changing tactics, and changing how you invest your limited funds and focus your talented teams. We all know change is difficult, leading us away from a known environment and into an unknown future. But the issue at hand is more than a simple case of the devil you know vs. the devil you don’t.

Sunk cost thinking makes change even more challenging. Once we are working on a project our tendency, as humans, is to keep working on it. This remains true even when we are faced with mounting evidence that the project outcome will not live up to our expectations. We all have an innate tendency to look backwards (at what we’ve invested) while we look forwards (and decide how much more to invest), and this leads us to limit our options time and time again. Consider these individual examples (collected in the fantastic book Essentialism by Greg McKeown): (more…)

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9 06, 2012

Is Your Innovation Strategy Actionable?

By |2017-05-23T15:42:04-08:00June 9th, 2012|Blog|0 Comments

Every firm we speak with talks about strategy, and yet for all the attention lavished upon the idea, few companies are able to craft a strategy that provides a clear path forward for the R&D organization. Why is it so hard? There are a wide range of statements that are interesting, useful, difficult to conceive, yet still fall far short of being considered a strategy. I cover a few of these below, and briefly outline a method we’ve seen capable of creating actionable strategies.

Mission and Vision Statements are Not a Strategy

“We will hire the best, qualified staff and reward them richly”
“We will provide a fun place to work and solve challenging problems”
“We will leave the world a better place and have fun doing it”
“We will lead the industry in mobile social networking platforms”

When written with care, mission and vision statements can set the tone for a subsequent definition of a strategy, but they are just the beginning. Statements like these make people feel good and have the illusion of bringing clarity to their jobs, but they don’t qualify as actionable strategy. Even the last one, stating a desire to dominate a product category, falls short of being actionable.

(more…)

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3 06, 2012

Are large companies doomed to failure?

By |2017-05-23T15:42:04-08:00June 3rd, 2012|Blog|0 Comments

graveyardIt is hard to open the paper these days without seeing a story presaging the demise of a another industry titan. If you believe the articles, Microsoft, GM, Xerox, Dell and many other bellwethers will face, at best, a slow, uninteresting decline due to their failure to innovate in ways that disrupt the markets in which they compete. Even Google and Facebook have been mentioned as established companies that cannot innovate as quickly or profoundly as they could when they were smaller, had everything to gain, and far less to lose. In The Power of Pull (Basic Books, 2010) John Hagel of Deloitte has calculated that the average life expectancy of companies in the S&P 500 has declined from 75 years in 1937 to a mere 15 years today. So is a descent inevitable for the larger firms?
(more…)

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