Innovation’s Holy Grail

by C.K. Prahalad and R.A. Mashelkar

INNOVATION, AFTER VANISHING from corporate priorities during the recent recession, is slowly making its way back onto to-do lists in corner offices. In most companies, though, the innovation process is coughing and sputtering like a rusty old engine. Not unlike internal combustion, traditional innovation is heading for obsolescence—because parameters have completely changed—and it will take unsuspecting organizations with it.

Most innovation programs are built on the assumptions of affluence and abundance. The more, the better. Striving for bigger margins is B School 101. However, we see shaken consumers in the United States and Europe asking for inexpensive or value-for-money ...

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