Setting the Right Strategy for Innovation and Disruption

Raynor has been a leading and consistent voice in the strategy and innovation ecosystem ever since his work with Clayton Christensen on ‘The Innovator’s Solution’ and his book ‘The Strategy Paradox’.  In this interview, he discusses the conflict between sustaining and disruptive innovation initiatives of an organization and the relationship between strategy and innovation.

On the first matter, the conflict between sustaining and disruptive innovation, the issue usually comes down to the fact that financial measures that drive organizational behavior are incompatible with disruptive efforts. Raynor concludes that an effective way to manage this conflict is to create separate organizational entities that answer to these very different financial imperatives. On the topic of the relationship between strategy and innovation, Raynor states:

Strategy and innovation can be usefully separated but kept very closely connected. Strategy is really a cross sectional game, and innovation is a longitudinal game. Strategy is a set of integrated choices, the combined effect of how an organization embraces the trade-offs that define the services it delivers to its customers. Innovation is the complimentary idea that beyond simply embracing trade-offs to be different, you can break trade-offs to be better.

Regarding what is involved with disruptive innovation, Raynor discusses breaking the traditional and accepted tradeoffs that current strategy defines. As he states

When you understand both where you are in the market, and where you’re headed over time, it allows you to focus your innovation efforts … focus on those trade-offs that if you broke them, it would result in a larger number of consumers in the market you are targeting to actually adopt your service.

There is much more in this interview that is insightful and valuable. Michael Raynor is an influential voice on strategy and innovation and his perspective should be considered by all strategists and innovators.

Original Article »

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