Managers must safeguard side projects to mitigate the risk of a start-up disrupting their business – according to a new book from Professor Philippe Silberzahn of emlyon business school.
In ‘The Manager’s Guide to Disruptive Innovation: Why Great Companies Fail in the Face of Disruption and How to Make Sure Your Company Doesn’t’, Silberzahn states that the number one way to deal with disruptive threats is for established companies to promote their own innovation through the protection of experimentation – even if financial results are not immediate.
“Disruption is a huge and growing threat to industries the world over – somewhere there is always a start-up looking to disrupt your business”, says Silberzahn. “Businesses must fight the temptation to close down not-yet profitable or expensive side projects in the face of adversity – when it comes to combatting disruption, the safeguarding of innovation is the only thing that can save you. Often finance directors looking to cut costs will home-in on any in-company projects that don’t deliver immediate financial value – this is a mistake.”
Silberzahn also adds that sticking to your business plan, looking after your customer and engaging in perceived ‘good practice’ will lead to failure in the face of disruption, because disruptions always mean targeting a new set of customers.
“Companies also often maintain the belief that sticking to their core business and customer base will see them prosper in the face of disruption – this caused the downfall of Kodak. On the other hand, Nestle prospered hugely from the decision to support the development of the Nespresso side project – even though it took over 20 years and two failed launches to come to fruition.”
In the end, successful innovation is not about creativity or devising bold, blue sky projects, but about transforming management. “Companies must develop a management system that allows for this type of internal innovation.
Ultimately, if management is inflexible and manages budgets ‘too well’, disruptive projects will be asphyxiated, and disruptors will eventually usurp the business.”
For more information or to speak to Philippe about his book, contact: firstname.lastname@example.org or call +44 (0)1582 790 704
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