Innovation, John Hagel, and JSB

January 23, 2005

After an eight-month hiatus, John Hagel is blogging again. Hagel founded McKinsey’s e-commerce practice and just finished a book with John Seely Brown. Hagel & JSB write the most compelling descriptions of the power of loose coupling and services-oriented architecture I’ve read anywhere.

Their new book, The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization, due out in June, will break new ground.

Those alluring mass markets of China and India? Their new middle classes will be very demanding. To keep up with internal demands, China and India will become hotbeds of innovation — generating what Hagel and Brown call “innovation blowback.” Companies from developed countries who penetrate these emerging markets will often find themselves competing with radically improved products/ services/ processes back in their home markets. Developed countries don’t have a patent on innovation. Hagel promises to elaborate in an article in the Feburary Harvard Business Review. (I have an online account; the article is not up yet.)

A few teasers:

“The real opportunity will be to combine product and process innovations in ways that play off and reinforce each other.”

“Don’t get overly consumed by breakthrough innovations depending on new generations of technology – a lot of the opportunity comes from rapid iterations of enhancements to products and processes that individually may not make a big difference but cumulatively enable breakthroughs in price/performance levels.”

“It is dangerous to think of innovation as a one time event. It is much more productive to view innovation as a process playing out over time. This is the key to the bootstrapping that is occurring in a broad array of product and service categories, ranging from digital still cameras to motorcycles to health care services.”

I keep bumping up against the same meme, as if ripples from some inspiring event are rolling into my consciousness. It goes like this:

  1. At first, competition hinges on being able to deliver the goods or, better still, having them in plain view on the shelf
  2. When several providers join the fray, products that are “better, faster, cheaper” gain the upper hand.
  3. Innovation kicks in, improvements roll out more often, and intergenerational feuding begins. As among Western peoples, a youth culture springs up. The lithe newcomer with the latest features is venerated. Join the product of the month club.
  4. Financial markets reward companies that concentrate on core and hand off everything else. This used to mean getting really good at what you did. Now it means being agile enough to swap into a new core.

I realize this is abstract. I’ll come back to add graphics and try to make things more intelligible.

This topic is also more about business than traditional training, but I contend that if corporate training isn’t supporting the business, it doesn’t deserve to exist. And business is changing.

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