THREE | Innovation and Abandonment

“The best way to predict the future is to create it.”

…To Peter, the conventional view of innovation, focused solely on product development or brand extension, missed the point. To truly innovate, Peter believed you had to radically change customers’ expectations.

…The effective organizations learn systematically to abandon or at least to build systematic abandonment into their ordinary life cycle.

…”There’s an old medical proverb,” Drucker once explained, “There’s [probably] nothing more expensive, nothing more difficult, than to keep a corpse from stinking!”

Most corporations waste time, energy and precious resources on keeping their corpses – their old products – from stinking. Because these old products are still generating large revenues, most executives don’t even recognize that they have stinking corpses. And so the bosses assign smart people to tackle serious problems in old businesses. This is a misallocation of precious, creative resources.

In an interconnected world, trying to generate high-impact innovation, despite the high failure rate, is actually much less risky than sticking with the old standby. The innovative organization uses incentives, employment guarantees, performance measures, and active engagement by leadership to help people embrace change rather than fear it.

Peter Drucker viewed innovation as a discipline, a skill that can be learned and practiced like playing the piano. To innovate, you must devise a systematic method of identifying opportunities that provide new value for your customers. Many people think that the discovery of new ideas is random and unpredictable. Far from it; such discoveries come from scouring the landscape and translating sightings into “what we don’t know that might matter.”

The organization needs to be constantly on the offensive. It must watch for potential new frontiers instead of just playing defense against intruding competitors.