Nature of Innovation

“Innovation is organized, systematic, rational work.”


“. . . the bigger a business gets, the less and less interest it has in small opportunities. And all the big growth markets of tomorrow are small today.”


Only about one in ten enterprises is somewhat successful at innovation and can maintain long-term growth levels acceptable to shareholders.[4] While there are occasional spectacular successes of innovation, very few can sustain innovation on a consistent basis. This section discusses the sources of innovation along with a review of a strategic approach to innovation, disruptive innovation, and a tactical approach, open innovation.

[4] Christensen, Clayton. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997).

Sources of Innovation

Innovation can and should be systematized, much like invention and R&D. Enterprises generally have difficulty and delays in identifying opportunities for innovation in their industries. As noted, innovations exploit change, and Drucker[5] has provided a hierarchical list of seven sources of innovation that identifies areas to look and helps prioritize the innovation efforts within an enterprise. These sources are listed in the following table, in order of importance.

[5] Drucker, Peter F. Innovation and Entrepreneurship (New York: Harper & Row, 1985).

Sources of Innovation
Within the CompanyOutside the Company
1. Unexpected events ...

Get Innovate or Perish: Managing the Enduring Technology Company in the Global Market now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.