Leveraging the Right Capabilities
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Definition
Leveraging the right capabilities refers to the resources that make innovations successful. The main two resources are managers and money and if used appropriately, will inspire innovation.
Overview
Leveraging the right capabilities is one of the four rules of innovation created by Clayton M. Christensen. His article “The Rules of Innovation” is all about bringing new technology into the business world and how to make it successful. As his third rule, leveraging the right capabilities focuses on the resources used, such as money and managers.
Managers are a key resource for innovation within businesses. If the manager knows what they are doing and are capable of determining their organizations innovative limits, they can be successful. According to Christensen’s article, there are three questions a manager should ask themselves to determine whether or not their business can use innovation to their advantage: (1) Do I have the resources to succeed? (2) Will my organization's processes facilitate success in this new effort? (3) Will my organization's values allow employees to prioritize this innovation, given their other responsibilities? Also, if a manager knows the difference between core business management and innovative business management, then they should be able to propel their company forward.
Money is the second key resource mentioned in Christensen’s article. With money, innovators must realize that more is not necessary better and impatience for profits is normal. If a business gives too much money toward innovation, they may spend too much time following the wrong strategy. Having just enough money will force organizations to focus on what their customers really need. When the impatience for profits fuels their motivation, things get done. In the WSJ article “How Hard Times Drive Innovation” Mr. Christensen was interviewed about the economy and innovation. He talks about how economic lows can inspire innovation and that during an economic recession people and businesses are more careful on how they spend their money. This will increase the chance for a new technology to get off the ground and succeed.
Example
Sony was very successful with introducing new technologies. Between 1950 and 1980 introduced 12 new technologies that created new markets. Between 1980 and 1997, their innovative success stopped and they continued to modify and enhance already introduced technologies. This did not expand their business and they began to shrink into the background while other businesses took the top spot. They have shifted from an innovative to sustaining strategy because new management, focused on supporting customer needs in existing markets, were core business oriented. Their lack of innovative business management skills lead Sony to stay within the markets that already existed.
Future
With our economy in a recession, those with ideas and ambition will put their money and management to skills to use and try to create new technologies that will surpass what we’ve seen so far. Careful spending and focused ideas will bring about new innovations and creativity that will benefit everyone. Such technology may (or may not) include: • New computer interfaces • Hybrid technology • Medical advances (artificial organs) • Artificial Intelligence (AI)
References
Christensen, Clayton M. "Rules of Innovation." Technology Review June 2002. <http://www.technologyreview.com/Infotech/12843/?a=f>.
"How Hard Times Can Drive Innovation." Wall Street Journal 15 Dec. 2008. <http://online.wsj.com/article/SB122884622739491893.html>.