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Category Archives: Innovation

Realigning the innovation spend

In his Forbes article, “The Folly of Trying to Spend Your Way to Innovativeness,” Bill Fischer, MIT Sloan Executive Education faculty and Professor of Technology Management at IMD, cites a Booz & Co. 2011 study finding that “only three of the most innovative companies in the world were among the 10 biggest spenders on R&D.” As Fischer points out, “Booz & Co.’s research has consistently shown over the past eight years, [that] there is no long-term correlation between the amount of money a company spends on its innovation efforts and its overall financial performance.”

The Booz & Co. study specifically looked at internal innovation and R&D efforts. But innovation does not necessarily need to be developed in-house; in fact, it can be purchased. For example, since 1999, IBM has acquired more than 130 companies—some of which are truly innovative.

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Networking your way to new products

Many companies get it wrong when it comes to creating new products. They focus on what they need for revenue streams, how to evolve current products into new extensions, and immersing themselves in their R&D labs. Then they take the new product out to a focus group to get feedback.

This process, however, is backwards. Innovative products really come from users who have a need for something. And often, those users are finding work-arounds to solve their needs. Research by Eric von Hippel—Professor of Management of Innovation and Engineering Systems at MIT Sloan—conducted with Steven Flowers, Jeroen de Jong, and Tanja Sinozic, found that 6.1% of consumers in the U.K. over the age of 18 had created or modified a product for their own use within the last three years.

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The innovation long game

This past fall, Tim Worstal wrote in the Forbes article, “The iPhone 5s, Proof That Apple Has Given Up On Innovation,” that the iPhone 5s is just another example of Apple “steadily losing its mojo following the death of Steve Jobs.” Worstal echoes the growing speculation that Apple is no longer capable of producing great disruptive inventions e.g., the Mac, and is simply coasting on the momentum of the innovation tidal wave they created rather than navigating new waters.

But it’s difficult—and arguably a waste of time—to prove that a company has stopped innovating. Apple represents the collective nerve it strikes in the business world: fear that once you reach a certain point of success, you will no longer be able to consistently innovate to satisfy user demand while beating your competitors.

Is it possible then to create an environment built to create consistent innovation over time? Three innovation experts at MIT Sloan say yes.

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Networking your way to new products

Many companies get it wrong when it comes to creating new products. They focus on what they need for revenue streams, how to evolve current products into new extensions, and immersing themselves in their R&D labs. Then they take the new product out to a focus group to get feedback.

This process, however, is backwards. Innovative products really come from users who have a need for something. And often, those users are finding workarounds to solve their needs. Research conducted by Eric von Hippel, Professor of Management of Innovation and Engineering Systems at MIT Sloan, in collaboration with Steven Flowers, Jeroen de Jong, and Tanja Sinozic, found that 6.1% of consumers over the age of 18 in the U.K. had created or modified a product for their own use within the last three years.

User-innovators are unlikely to bring their idea to a focus group—after all, the product is already “baked.” That’s where networking—or participating and observing your target markets—comes into play. In today’s open, collaborative world, that’s very easy to do.

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Creating resilience with public/private partnerships—and planning

Guest post by Chuck Brooks, Executive for DHS at Xerox

Public/private partnerships are critical to the success of government operations that provide essential services and benefits. Such partnerships can help agencies reduce costs, simplify operations, and are easily scalable at times of increased and decreased need. Whether motivated by a natural disaster, terrorism, or an interruption caused by legislative shortfall, successful public/private partnerships can provide business continuity and resilience.

Given that most of the infrastructure in the U.S. is private, government has a need to coordinate with the private sector for maintaining critical transportation modes, IT, and communications support, allowing these agencies to keep preparedness at high levels. The private sector can also bolster humanitarian efforts with supplies of needed food, water, and provisions.

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