How to Manage Radical Innovation

by Robert Stringer



Most large companies are not radical innovators. They are good at making close-in changes to existing products or technologies, but they cannot seem to commercialize breakthrough ideas. This is the case because of their "genetic" makeup: values embodied in their leadership practices, their cultures and structures, their reliance on internal R&D, and their inability to attract and motivate the kind of aggressive and agile entrepreneurs who are the source of most radical innovations. Large companies in traditional industries that want to increase their access to radical innovation have a variety of approaches available to them. These range from ones that draw on existing organizational resources but are unlikely to stimulate radical innovation to ideas that involve a rethinking of external relationships with entrepreneurs and venture capitalists. As the focus of innovation moves from what is inside to what is outside the organization, the keys to success move from mechanisms of owning and controlling the radical innovation to mechanisms that promote learning about its commercial potential.

California Management Review

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Published at Berkeley Haas for more than sixty years, California Management Review seeks to share knowledge that challenges convention and shows a better way of doing business.

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