Transcript

Wade Roush: Hey. You’re listening to Innovation Answered, the podcast for corporate innovators. I’m Wade Roush, and I’ll be your guest host for a special series of Innovation Answered episodes that we’re putting together right now.

The series is sponsored by PatSnap, the global leaders in connected innovation intelligence, and by PatSnap’s Innovation Academy, offering online innovation intelligence courses from industry experts.

And over the next four episodes, we’ll be going on a hunting expedition for the rarest of rare species, the persistently innovative organization. 

By which I mean, those big, famous companies or organizations that have been the incumbents in their fields for decade after decade, but have somehow managed to sidestep the fate predicted for them by late great business scholar Clay Christensen.

The way Christensen saw it, there’s an inherent downside to becoming a big, successful incumbent in your industry, which is that eventually you just want to protect your big existing market and you lose the incentive to keep innovating. At that point, it’s only a matter of time before you find yourself surrounded by smaller, nimbler competitors that are stealing away that market. 

That’s what Christensen called “the Innovator’s Dilemma.” And what we’re looking for are big companies that have figured out how to solve it. 

If there are any.

The truth is, I think these persistently innovative companies are a little like those cognitive and physical super-agers you hear about sometimes. You know, the people are still out there running marathons and winning memory competitions at age 90. Meaning, these companies are somewhere between exceptional and nonexistent. 

You see, I’m a journalist and audio producer who’s been covering technology and business for a long time. And my experience tells me that Clay Christensen was mostly right. If you’re looking for innovation, the most likely place to find it is inside small organizations like startups. 

By definition, a startup is just getting started, so it isn’t weighed down by existing customer bases and product lines. It’s built to test brand-new ideas as quickly and cheaply as possible. And if it finds a good one, then it can scale it up. The real test for a startup is whether it can keep that scaling going for a decade or more after it becomes the incumbent.

Now of course there are lots of companies that are still in business after 50 years or 80 years, or even 100 years or more. But only a tiny handful of these organizations manage to hold on to their lead decade after decade and keep pumping out products people love. 

Those are the super-ager companies we’re going to try to single out. And through conversations with business scholars and current and former executives, we’re going to try to figure out how they do it and what other companies can learn from them. 

So to kind of whet your appetite for the series, we wanted to bring you this bonus conversation, where I sat down here at my kitchen table with Innovation Leader’s co-founder Scott Kirsner.

Scott and I talked a little about where the idea for the series came from and what sorts of theories we have going in about what makes an organization persistently innovative.

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Wade Roush: So, Scott, how did this all start in your mind? You came to me a few weeks ago and asked if I’d be willing to take on this project, and I was kind of curious and interested and, like, intrigued. But I didn’t 100 percent buy on right from the start, and you had to kind of persuade me that this was a good idea. So where did the idea come from and why do you want to do this?

Scott Kirsner: I guess it was a little bit of a sales job, now that you remind me of it. But you know, we started this podcast Innovation Answered a couple of years ago, just really to specifically focus on all of the challenges of innovating inside bigger, established 25-year-old, 50-year-old, 100-year-old companies. And we’ve done seasons with a particular focus. The most recent one was different roles in the C-suite and how they support and foster innovation from their seat. And one of the things everybody wants to know, like, who are the role models for innovation? Who should you try to be like? And I think it’s very easy to to rattle off companies Apple and Nike and Google and, you know, LEGO, for example, and say, “Oh, those are the innovators.” But we wanted to peel off, and I felt like there wasn’t really anybody who could do this better than you, sort of peel off a couple layers to understand, what are the mechanisms, what are the elements that have made these companies great over decades? What have been some of the mistakes and setbacks and how did they overcome those? But I think the word innovation just gets used and overused, probably. And so the hope was to do an exploration of companies that really are role models, and what are all the factors and what is the what is the mechanism really look like inside those organizations?

Wade Roush: Yeah. Well, so thanks for those kind words about me. I have been covering innovation in different forms for a long time. You know, I’ve been doing this for about 25 years, covering science and technology in different forms. I wrote about Silicon Valley, where I was the senior editor for MIT Technology Review back in the sort of the late and early post dot com era early 2000s. Then I was at Xconomy, which was a media startup based here in Boston, but with bureaus around the country. And the whole premise there was that we wanted to understand the mechanics of venture-backed startup innovation. But we also covered big company innovation once in a while when it made sense to. And since then, I’ve also written for places like Scientific American and have continued to write for MIT Technology Review and make audio for them. And so, yeah, I’ve always been doing this dance of trying to figure out where is the innovation happening today and wanting to talk to the change-makers. But I think I have developed a bias that I will cop to in favor of the startups. My bread and butter or my daily kind of work at a place like Xconomy or Technology Review was going and visiting an early-stage startup—maybe they were seed stage, maybe they were Series A or Series B, so really early in their history—getting to know the founders and the chief engineers and having a look at their technology and going back and writing about why was that promising? And was it going to work?

Scott Kirsner: Is your point of view that like, look, right now, in the twenty-first century, where the where the real excitement is is the startup world and Cambridge and Tel Aviv and Silicon Valley?

Wade Roush: I guess I just feel like if you look back at where most of the world-changing and economy-changing innovations of the last 20 years or 30 years have come from, I can only think of one that came out of an established company that had been around for decades, and that’s the iPhone. 

Scott Kirsner: Mm hmm. 

Wade Roush: And I feel like there are so many examples. Zoom. Let’s pick another example. The everyday texture of life is so different now because we can talk with each other in these virtual spaces and we don’t have to be in the same physical space. And that’s changed everything at exactly the right moment when we really needed some kind of technology to keep our organizations together in the midst of the pandemic. And Zoom was a startup. It’s getting pretty big now, but it was a startup. It wasn’t created by AT&T or Verizon. It was a startup. So that’s where I’m coming from. I feel like with the exception of the iPhone, which has completely changed everything, and which came out of Apple, a very large, very established company and therefore a very interesting example, I can’t think of a lot of other world-changing innovations that really came out of giant companies in the last 20 years. Can you? 

Scott Kirsner: Well, I would expand the time frame a little bit just to benefit my side of the debate and say, Let’s talk about the last hundred years. And you do have these companies. I think what I’m interested in, and kind of the reason that we wanted to make this mini-series of the podcast happen, is that iPhone is great go-to example because lots of people have them in their pocket, or they have an Android phone, which is, you know, an operating system developed by Google. But I think if you look at companies, any of the big pharma companies, Merck, Pfizer, Novartis, you know, they’ve been sources of new drugs and therapeutic treatments for lots of different stuff. The most recent is COVID. Pfizer partnering with a German startup, and Johnson and Johnson partnering with an academic lab here in Boston. So I think pharma and biotech, you have a lot more established companies bringing innovation to market. I think if we can talk about some of the companies that we have been trying to shortlist for this mini-series, companies like Disney or LEGO or IBM, where, OK. Disney is a good example where lots of people with kids now have a relationship with Disney+. And it’s not that Disney was the first breakthrough player in streaming media, but they’ve been kind of orbiting it for a long time thinking about how are we going to own the relationship with the customer through their television set? And so I’m kind of interested in the 100-year span of how do companies really innovate and remain relevant to their customers and bring good things into the market over longer periods of time than a Google?

Wade Roush: I guess what we’re looking for are examples of—and I’m totally open to being converted and persuaded—I just think I’m going in here with sort of the skeptic’s point of view, and I’m looking for reasons to change my opinion, basically, about where does true innovation come from? And I think on the longer time scale, you’re right, if you’re talking about timescales of 100 or 150 years, you absolutely would miss a ton of the story if you took out the giant long-lasting companies like General Electric or Disney. One thing I’m going to be really interested to find out as we go into this process and do the research and the reporting and the interviews is, in the companies where they have built up a reputation for consistent innovation over decades, if you dig down a little deeper, how consistent is that innovation? I wouldn’t be surprised if every single company we go to has interesting stories to share about times when they maybe forgot how to innovate or they hit a wall of innovation, or they had to rethink and reinvent how they innovate. Or they had a CEO who didn’t know what he was doing or she was doing, right? 

Scott Kirsner: Yeah, I was going to mention, I think a lot of it is tied to people, right? And you think about eras where there’s a particular CEO that revives innovation and really supports creativity and product development. That person leaves or they get ousted for some reason, like Steve Jobs at Apple getting pushed out. And so I mean, one hypothesis I have is that you need to figure out ways to to get beyond the idea of there’s an innovation champion who’s our CEO or a chief technology officer or our head of R&D or whatever. And if that person disappears, then suddenly innovation starts to evaporate. So that’s kind of one hypothesis I have, is that it is tied to people and personalities. But if you really want to be innovating for decades upon decades, you need to figure out how to detangle that. So it’s not just, Oh, Walt Disney has died. We’re, you know, we’re done for, we’re out of ideas. 

Wade Roush: Yeah, no. I think it would be fabulous to be able to untangle that. When I hear you put out that hypothesis, my reaction is, “Yeah, maybe.” But I guess I wouldn’t be surprised if we land somewhere slightly different and we come back to some middle ground, and that the truth is closer to: leaders really make a huge difference. And having the right visionary in charge who’s willing to take risks, who’s willing to go against the grain and maybe even go against the market and the shareholders. Without that, nothing else happens. And that that might be one of the consistent ingredients. And the reason that startups maybe are more successful in the short run is that they are sort of, by definition, they’re built around charismatic founders, right?

Scott Kirsner: Yeah. Yeah, there are no startups unless there’s a visionary founder or a couple of visionary founders that are there, working every day, working, being the hardest working people and probably the most visible people on that team. And so I do think it’ll be interesting to explore the role of of leadership. I think it’s sometimes a cop out for companies to say, when you’re talking about innovation and companies and how companies stay focused on the future, you say “Oh, you need C-suite leadership.” It’s such an easy answer. I think there’s probably some truth to it. I think you also probably will also probably discover that you need a few different mechanisms. Some companies innovate really effectively by acquiring great start ups and some of them build up R&D teams or innovation teams where they’re trying to attract smart people to come up with a pipeline of new innovations. And I think there are probably some other mechanisms will discover too. Licensing and and partnerships with startups. Open innovation where maybe people run challenges to source ideas. I bet these companies have more than one, you know, trick in the bag.

Wade Roush: Yeah. I think if there are provably repeatable mechanisms and principles that you can use to design an innovation system inside a company, then we want to find out what those are and we want to underscore those. And it’s not like we be inventing anything new. There are legions of people inside the nation’s business schools asking these questions, and we’re going to talk about that.

Scott Kirsner: I was going to say: there are so many books and so many theories about how to make innovation systematic, and how to have a portfolio of ideas and figure out which have potential and test them in front of customers. But what I’m excited about with this series is that like, we’re looking at real examples. It’s like you’re going out into the wild to understand how this stuff is manifested inside real companies as opposed to, you know, a diagram in a really great book that says this is how the innovation process should work. And I don’t know, I think you and I both come at things from a storyteller perspective, and I do think you can really highlight maybe where the listeners’ company is strong and maybe where they’re weak and need to invest more from from hearing some of these stories.

Wade Roush: Yeah, I think that’s the hope. So, maybe by January or February, we’ll have some some answers to these questions. So it’s going to be a fun process and thanks for asking me to come on board.

Scott Kirsner: Yeah, I’m excited to hear the episodes myself. I love listening to the podcast. It’s an honor to be on it. I haven’t been on it that much. So, yeah, I’m excited to hear the episodes that you create. And we should also say thanks to PatSnap and Innovation Academy, who are sponsoring this mini-series.

Wade Roush: Yeah, thank you to them. And it’s going to be fun. So stay tuned and we’ll be back with our first full episode in this mini-series pretty soon.

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Wade Roush: You’ve been listening to Innovation Answered. I’m Wade Roush. I’m the guest host and guest producer for this special series. Special thanks to Scott Kirsner for joining me today.

We’ll be releasing the first full episode of this miniseries just a few weeks from now, on January 18, 2022. So keep an eye out for that. 

For more bonus content, subscribe to Innovation Answered wherever you get your podcasts. You can also check out the whole archive of Innovation Answered episodes at innovationleader.com/podcast. Thanks so much for listening, and see you in the new year