Gagan Kaul Blog

I have been reading a lot of blogs that discuss innovation and the business implications of the same. I recently came across the blog of Vijay Govindarajan, Professor of International Business at the Tuck School and founding director of Tuck’s Center for Global Leadership. He has also co-authored a book Ten Rules for Strategic Innovators, which is getting rave reviews from the business brethren. His blog is a collection of ideas that might act as good guidelines for anyone in pursuit of a transformation.

In one of his posts, he has outlined a very interesting three-box thinking model for streamlining innnovation and thinking about it consciously from a business perspective. However, most of the discussion seems to revolve around the larger companies. I wonder how the universe of smaller companies might go the innovation path, in the context of the three-box model. I had written a comment on the same on his blog, but am still awaiting a reply. I am posting my comment here as well, in case you might have some interesting thoughts on this.

Dear Govind,

Your last two posts outlined a very interesting thought process. However, most of the ideology behind strategic innovation is often discussed in the context of large organizations. Is this because the adaptability of a smaller company is quicker and easier than a large organization?

I feel that a small or mid-sized organization might bear a larger inertia to pursue the change/innovation process. A major focus for the smaller companies is to improve margins and cut costs. Just like a large organization, a smaller organization also has its processes and services well defined and entrenched in its modus operandi, though the universal set of offerings might be smaller when compared to that of large companies. However, instead of a strategy based on innovation and identifying future direction vis-a-vis industry dynamics, small companies usually pursue a short-term goal spanning two to four years, with a greater focus on replicating the existing processes and offerings.

A larger organization might be able to shift focus or include innovation in the larger picture, but does it make ’strategic’ sense for a smaller company to shift focus and strive to create new markets? Does it make sense for a smaller company to ignore short term profitability, and allocate resources towards innovation? And that too at a stage, where year-on-year growth for a smaller company is more critical for survival compared to a large organization that can afford to bear a few downturns.

I have been thinking about this of late. Would love to hear your thoughts on this.

Regards,
Gagan.