The Discipline (and Paradox) of Innovation

Early today I revisited this article by Peter Drucker from Harvard Business Review and found myself reflecting on the 'discipline of innovation,' on which Drucker notes:

"...Innovation is real work, and it can and should be managed like any other corporate function."

Indeed, innovation is real work. And, yes, it must be managed. However, the paradoxical nature existing between innovation and corporate structure warrants further discussion.

For firms, an entrepreneurial strategy offers a framework for organizations to cope with increasing complexity and high-velocity change in the external environment through continual exploration, innovation, and adaption internally. It presents the opportunity for a sustained competitive advantage in an ever fleeting world. The structured nature of an organization, however, presents certain obstacles that can work to constrain entrepreneurial behavior in an existing firm. In many cases, a company’s entrepreneurial spirit is systematically destroyed as it grows and gravitates toward structure and certainty – both of which can work to impede experimentation and innovation. In contrast, firms that effectively exhibit corporate entrepreneurial activity are characterized by a willingness to deviate from prior routines, strategies, business models, and operating environments in order to embrace new combinations of resources and opportunities that pose potential for the organization. That is, while entrepreneurship is more consistent with an environment that encourages the management of uncertainty, risk tolerance, experimentation, and empowerment, entrepreneurial behavior flourishes in established firms where individual employees, departments, and business units are free and able to pursue actions that are novel to the firm. Accordingly, organizations must enable its employees to act as stewards of innovation, or as “corporate entrepreneurs” (also commonly referred to a intrapreneurs) by providing them the freedom and resources required to explore, develop, and execute their ideas. Nevertheless, and as Drucker pointed out, this process of exploration and innovation must be both managed and directed in order to be effective and efficient -- it has been demonstrated how corporate entrepreneurial behavior can result in rogue and unproductive behaviors with regard to the firm if not properly directed. Consequently, an entrepreneurial vision must not only be integrated into the company’s strategies, but also be supported with the proper organizational structure and controls that provide room for both discretion and formality.

In summary, innovation most certainly needs to be managed. However, it is most certainly not like any other corporate function. It is, however, real work -- existing as a complex process that is both dynamic and mutable, which must be understood and supported at the firm level. Recognizing and executing effectively within this paradoxical relationship is imperative for successful and sustained innovation at the firm level.