Failing Companies: The Innovation Economy and Diagnostics

Some companies have yet to discover that in the new Innovation Economy, know-how is less important than knowing what to do with know-how. The capability to translate traditional assets – brand, knowledge and intellectual property – into value is increasingly the distinctive mark of companies that have unlocked the secrets of success.

For everyone else, attitudes verge on the medieval. There are obvious signals of medieval attitudes in management that are quite easy to spot.

One signal is constant vetting of external communications from the innovation team, no matter how insignificant, by groups set up specifically for this purpose. Another is nervousness when it comes to innovators participating in conference programs. Yet another is elimination of collaboration technologies, or a failure to provide them in the first place.

However, the most significant signal of all is when innovators cause outright panic when it is realized they are using social media outside the boundaries of their organizations. Or when innovators choose to collaborate with other companies or individuals without the permission of their management.

Ultimately, the problem is that innovation teams which share are able to create synergies which often result in the ability to create “man on the moon” type projects. Everyone else is stuck with the glacial progress that results when you have to do everything yourself.

Signifiicant reliance on trade secrets and other legal protections of this kind makes each innovation group an island.

It means the really big, really significant innovations can come only from the largest players in a particular category, who can afford to fund the work required. For most markets, this approach means that the biggest changes can only come from one or two established players.

Sharing across organizational boundaries makes it possible to create much more significant innovations than would otherwise be practicable. It is more often than not the failure to share that causes company collapses in the Innovation Economy.