My good friend (and sometime intellectual sparring partner), Ron Adner, has just released a new book, the Wide Lens, which highlights a major problem for companies seeking to innovate: The essence is that they focus too narrowly on the admittedly difficult job of getting their own innovations up to speed, while ignoring two other ecosystem based challenges that have to be overcome if an innovation is to truly take off.
The first is what Ron calls Co-innovation Risk, meaning the extent to which the success of a partiuclar innovation depends on other innovations being successfully commercialized. The trouble is that when you are depending on someone else to do their part, and that someone is not under your own control, you can find yourself with a really expensive launch budget that is slowly getting spent before a 'complete' product can be ready. Why did MP3 players not really take off until Apple invented the iPod? Because there was no easy (and legal) way to get digital music for the mainstream.
The second kind of risk Ron highlights is what he calls Adoption Chain Risk. This is the risk to which you are exposed if you have to first sell the idea to some third party before your ultimate customers can judge how good your offer really is. Many stalled innovations have struggled with this dilemma. One that I'm following closely at the moment is alternative energy ecosystem company A Better Place. If you meet, as I have, with their senior leaders, you'll be utterly convinced that they have cracked a workable, sustainable solution to the electric-car problem, suitable for mass adoption and ready to shift our habits forever. One small problem is that they are having trouble getting the other value chain partners in a row. Powerful, entrenched interests such as those of existing energy companies are proving a powerful force of inertia.
Maybe I should ask Ron what they should do – will keep you posted on what he says!