There is an interesting article in BusinessWeek with an interview of Dr. Vijay Govindarajan. Dr. Govindarajan is currently a Professor at Dartmouth's Tuck School and a is world authority on strategic innovation. It was recently announced that he would become the Dean of the John H. Sykes College of Business at the University of Tampa. I am currently enrolled in the Masters of Technology and Innovation Management at UT.
The article is essentially a high level overview of my TIM 730 class, "Leading Innovators". The article focuses on how mature businesses can compete, innovate and spin off high growth companies to compete against nimble startups. The article (and the course itself) focuses on a number of case studies such as The New York Times Interactive, OnStar, Microsoft .NET, The Fate of the Vasa and Hasbro Interactive. It attempts to point out how companies can use assets like brands, customer relationships, expertise, manufacturing capacity, etc to compete against and even beat these startups.
The major focus of the article is that when established companies form a new business unit or organization, these new entities must:
- Forget the parent company's success formula
- Borrow the parent's resources
- Learn how to succeed in a new environment
Dr. Govindarajan states that the difference between innovation and strategic innovation is:
"An innovation is strategic when there is a substantial change to one or more of the fundamental questions that define a business: Who are the customers, what value do we provide, and by what processes, and through what areas of expertise do we provide that value?"