Tellis points to Sony Corp., which created the mobile music market when it launched the Walkman and had an MP3 player before the iPod. Finally, incumbents focus too much on the present, obsessing about marketing their current products and satisfying their existing customers rather than imagining the new pathways to which new products might lead. Incumbents are also risk-averse, measuring new innovations unrealistically by the speed at which they can produce returns that match their current, highly profitable products. They fear cannibalizing their currently successful products, so they ignore or squash innovations that blossom internally. Market dominance, power and success contain the seeds of their destruction. In fact, that is the problem – what he calls the incumbent's curse.
Perennial success belongs to those firms that innovate relentlessly."īut many companies fail this test, despite being large and having abundant resources. Tellis's verdict is that "there are no permanently dominant firms or permanent market leaders. Light beer: Trommer's, Gablinger's, Brau, Miller, Bud.Īfter studying 66 markets, Prof. For microcomputers, it has been Altair, Tandy, Apple, IBM, Compaq, Dell, and Hewlett-Packard. In video games, we have seen leadership change from Magnavox to Atari, then Nintendo, Sega, Sony, Microsoft, and Nintendo again.
He notes how in mobile music, Sony was the leader until Apple came along. He starts with the fact that market leadership frequently passes from company to company, contrary to the common belief that large organizations are behemoths that can't be budged. That cuts to the heart of his fascinating new book, Unrelenting Innovation, which brings together his studies over the years with other academics on successful and unsuccessful innovators.
The extensive research of University of Southern California business professor Gerard Tellis shows that you must provide incentives for enterprise (rather than incentives for the status quo) build internal markets that create competition and reward, rather than stifle, the best ideas and empower innovation champions. If you want to be eternally innovative as a company – and avoid the innovator's curse which topples large companies that fail to remain dynamic – you must adopt three practices.
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