Innovation in the Information Age, Part One—Framing the Dilemma:
One of the most critical questions facing large corporations today is how to
create an environment that can produce radical innovation. The internet
technology is the catalyst for a business revolution engulfing companies that
have honed their business models over the course of the 20th century. These
relatively stable monoliths are faced with the challenge of upstarts forcing
their hand; it’s David and Goliath all over—with the fleet-footed David’s
winning. ETRADE’s success (with revenue now of 10M) is no doubt behind the
announcement of a reluctant Merrill Lynch (with revenue of 22M) that they
will, at long last, offer online trading.
The 20th century organizational DNA has evolved to kill off anything that is
“not it,” any cultural aberration or structural divergence. Innovation does
not last long in a risk-averse culture that allocates expenditures against
bottomline milestones.
How can Fortune 1000 companies forged in steel in the fire of the 20th
century compete with the guerrilla tactics of these virtual upstarts? In the
coming weeks, we will explore the variety of methods and structures—both
intra- and extraventures—that are being used by the B of A’s and the New York
Times’ of the world to stimulate innovation in a change-or-die environment.
