Organizations need intentional structures for disruptive innovation

Organizations that intend to manage sustaining innovations for existing customers while also exploring and developing disruptive innovations need to develop financial and management structures that support both.

They placed projects to develop disruptive technologies in organizations small enough to get excited about small opportunities and small wins. … They planned to fail early and inexpensively in the search for the market for a disruptive technology. … When commercializing disruptive technologies, they found or developed new markets that valued the attributes of the disruptive products, rather than search for a technological breakthrough so that the disruptive product could compete as a sustaining technology in mainstream markets.^[1]

One way to do this is to create a new company that is owned (at least in part) by the incumbent company.

#organizations #innovation