Venture capitalist Howard Anderson recently decried the failure of large companies to capitalize on their inventions (Technology Review, May, 2004, pp. 56-59). Causes? Slowness, timidity and incentive problems. Big just can't get it right. Only entrepreneurs really attack markets, changing the world while big companies defend positions with outdated products. So says Anderson. Yet who are those entrepreneurs? Typically, they are people who left (or were ejected from) large companies. OK, for a moment in the late '90s, universities couldn't keep students from diving into entrepreneuring. Still, most high-tech entrepreneurs are people with corporate experience. The issue isn't company size. The problem is not with big alone and has not been solved by small companies. The problem is both bigger and more insidious. Lack of Vision Companies large and small lack both a vision of innovation (the sum of invention plus commercialization) for the company and an innovation vision for every product. The problem isn't lack of invention, but perceiving invention as the goal. And it isn't lack of commercialization, but seeing commercialization as tasks to do. Anderson names the overall problem execution, yet that focuses on skills. If we understood innovation, we would adjust our skills. Sit in on a typical big-company project review. Most management expects and most staff knows no better than to focus on the project-technology, staffing, resources, processes, etc. Where is value to the customer? Missing, right down to basic conceptual understanding of value. Likewise, sit in on a typical entrepreneur's plan review. You will find detail on technology, team credentials and financials, plus a half-page afterthought marketing plan. Where are the specific needs to meet? Preferences to design in? Value to deliver? Not just missing-not even conceived! Clearly I overstate. Counter-examples include P&G, Gore, EBay, and Google. Still, companies big and small invent just fine. Their problem is innovation . . . Reduction of an idea to in use, for the first time anywhere, that creates compelling value for customers. (For product in use also read business in service, process in application, and more.) We're Trained That Way Why this narrow-mindedness? Because we are trained that way. Engineering schools teach engineering, not finance, distribution or marketing. They graduate narrowly-focused experts. Business schools teach business, not science, engineering or manufacturing. They graduate narrowly-focused experts. Each is taught that theirs is the true core expertise needed by the world. Neither is taught respect for the other. Then companies hire engineers to do engineering and marketers to do marketing. Not to serve customers with new products, not to create wealth for the company, but to engineer particular products (on one side) and to launch and sell products (on the other side). Worse, engineers are never taught strategy, and school graduates get at most one course. So we wind up with tactical experts with no inclination to see the big picture. And no expertise to create the big picture if they were so inclined. For the same reason, we wind up with managers, not leaders-with people who often see strategy as an esoteric waste that diverts resources from the real job. The Tactical Culture So knows how to run, but not how to win races. We have a tactical culture of invention and a tactical culture of marketing, but not a strategic culture of innovation. We manage discrete functions instead of leading integrated systems. A few years ago, I integrated two research studies into a book, Technology and the Agents of Change (Market Engineering Press, 1999). …