MARKET LEADER q1 11 COVER draft 1.indd - The Marketing Society

i n n ovat i o n
kieran levis
Radical innovation
almost invariably
comes from outsiders.
They do much more
than dream up a
brilliant new product
– they develop
radically new markets
becoming ‘the world’s most customercentric
company’; for Sky, breaking the
oligopoly that used to control British
broadcasting. Conventional wisdom
nearly always dismissed these ideas as
irrelevant to what ‘real customers’ wanted.
The most important attribute of
these businesses was developing,
largely through trial and error, a set of
organisational capabilities that none
of their competitors could easily copy.
Nobody has ever been able to match
Apple for innovativeness. For years, no
other search engine was remotely as
good as Google’s. Amazon survived the
dotcom meltdown – when its share price
plummeted from $100 to $6 – because its
customer service really was the best. After
a shaky start, Sky became the bestmanaged
television company in Britain.
These distinctive capabilities enabled
them to make uniquely compelling
propositions to customers. If you’re the
only business able to offer it, you have
something approaching a monopoly for
a while. That’s the prize that market
creation offers, but it’s nearly always a
perishable one. Sooner or later, others will
learn to match the capabilities and make
comparable customer propositions.
These attributes are all rare – and
they’re not the only ones – but they are
particularly difficult to achieve in large,
successful organisations. They have too
much at stake in defending the existing
order against creative destruction. Their
cultures don’t encourage them to question
existing ways of doing things and try new
ones, many of which are bound to fail.
They are optimised for execution not
exploration and experimentation. They
are not natural entrepreneurs.
Perhaps the most difficult attribute of
all to achieve is the one I call disciplined
entrepreneurialism. Few organisations,
big or small, achieve this elusive balance
between entrepreneurial spirit and
management discipline. There’s an
almost inevitable tension between the
often anarchic forces of creativity and
originality and those of order, efficiency
and professionalism. Creative people and
organisations are frequently hopeless at
practical tasks, while the highly practical
often lack a creative spark. Too much
brilliance with no discipline means
products don’t get delivered on time and
costs run wild. Too much emphasis on
efficiency and control crushes originality
and inhibits experimentation.
Not always a paragon
Apple is now a paragon of disciplined
entrepreneurialism, but in the 1980s it
went to both extremes. From the start
it had been a magnet for the brightest
computer engineers in the country, much
as Google became 20 years later, the place
to work in Silicon Valley. But shortly
after a sensational IPO in 1980, Apple’s
co-founder Steve Jobs engineered the
48 Market Leader Quarter 1, 2011