Organizational structures optimized for efficiency cannot manage disruptive innovations

Most organizations adopt traditional management structures that are designed for operational efficiency and control. Unless they redesign their structure to pursue, identify, and implement disruptive innovations, the disruption will happen to them, not by them.

Successful companies want their resources to be focused on activities that address customers’ needs, that promise higher profits, that are technologically feasible, and that help them play in substantial markets. Yet, to expect the processes that accomplish these things also to do something like nurturing disruptive technologies—to focus resources on proposals that customers reject, that offer lower profit, that underperform existing technologies and can only be sold in insignificant markets—is akin to flapping one’s arms with wings strapped to them in an attempt to fly.^[1]

#innovation #organizations

See also:

• Efficiency is purchased by a loss in flexibility
• Emerging markets are decreasingly attractive as organizations get larger
• Disruptive innovation is antithetical to good management