Incumbentitis – The Anti-Innovation Disease

Well, we’ve just been through quite an election – out with the ‘old’, in with the new – well, somewhat, there were several incumbents re-elected. This isn’t a mandate for or against either party; it was a mandate for an economic revolution to get rid of big government and make one that works for the people. Is the government capable of re-inventing itself? Of innovating?

Let’s look at other established entities – like big companies. In the blogosphere & twittersphere there has been discussion of whether or not big companies can innovate. Well, I’ve seen some do it – does that answer the question? Kind of.

What is the biggest inhibitor to success & innovation? Success! This is what I see now – so many of my colleagues and clients are doing amazing well despite the recession. They are sitting on a lot of cash they are hoarding…for lots of reasons (like fear of a double dip, etc.). But now is the time to really innovate – to disruptively innovate. For most of them, the amount of money it would take to experiment, to prototype, to try some things is insignificant compared to what they have in the bank. This may be, for some, the least financially risky time to innovate – financially, not culturally. Culturally, the risk is huge!

They say to themselves, look at how we’re doing despite the economy, we must be doing something right! And they were/are…but not for that long – for many their R&D/innovation pipelines are 2-3 yrs out max. Beyond that? Not too great.

Let’s look at some who didn’t innovate – we know them, especially in the computer industry – remember Wang? DEC (Digital)? The original AT&T (bought out by the kids it spun off)? Hey, Smith Corona?* Yahoo? Blockbuster? In fact, ‘netflixed’ is a now a verb! And Blockbuster even says they saw it coming but didn’t really heed the warning signs.

Then there are those that were able to reinvent themselves. P&G, IBM, Ford, Apple. What was the difference? People – Management. New leadership (in the case of Apple, original leadership returning) brought in new insights, were not entrenched in the groupthink and were able to see and start the turn-around. But this isn’t easy nor is it typical. I’ve had the privilege to work with a few companies that have been able to do this, but again, it’s due to very special people. Check out one that still amazes me – Menasha Packaging.

So, is it possible for big institutions to reinvent themselves and innovate? Yes. Does it happen often? No. Can the government do it? I sure hope so, but am quite cynical…how about you?

*was watching “My Wife & Kids” rerun with my kids. There was a power outage and the teenage girl was given a typewriter to type up her paper – she typed the whole thing out without paper in the typewriter, looked at her dad and said, “I’m ready to print it out!”

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Deb, founder of Mills-Scofield LLC, is an innovator, entrepreneur and non-traditional strategist with 20 years experience in industries ranging from the Internet to Manufacturing with multinationals to start ups. She is also a partner at Glengary LLC, a Venture Capital Firm.