Future Growth through Radial Innovations: The Role of Senior Management

Abstract

Large established firms are generally good at managing incremental innovations, yet they often fail when developing and deploying radical innovations (RIs). Senior management at large firms is becoming increasingly aware of the importance of RIs. However, most of the large firms have failed to establish a mechanism i.e. a well defined organisational structure, management processes and resource allocation system, to develop RIs systematically. Such firms can learn from leading companies like Shell, Nokia and IBM who have successfully established RI mechanism and finely balanced their resources between incremental and radical innovations. This paper presents three main implications for management. One, a firm needs a fine balance between incremental and radical innovations to ensure long-term survival and growth. Two, the senior management must establish a RI mechanism, which may include instruments such as an incubation unit, a validation unit and/ or a venture capital arm among others, to incubate and develop radical innovations systematically and continually. This mechanism should be customised to individual firm’s needs. Three, the management must de-ploy adequate resources, funds and managerial time, for a longer term for a successful RI mechanism.