Chapter 2: Part 3 – In the age of innovation, the right brain reigns supreme

Gary Pisano a professor at Harvard Business School proposed a framework for classifying innovation. He divided innovation into four categories according to technology and business model. He called innovations that are relatively small in technology and business model Routine Innovation while innovations that are relatively large in technology Radical Innovation those that are relatively large in business model Disruptive Innovation and those that have significant innovations in both Architectural Innovation.

In the past a large number of innovations in enterprises belonged to Routine Innovation. These innovations made small improvements to products based on existing technology and business models. Customers can accurately identify the new value brought by innovation so new products do not face too much resistance when they are pushed to market.

But when there is a major change in technology or business model existing consumers and users will have doubts: Does new technology new methods new products really work? Of course people will feel that they need to figure this out before opening their wallets. However since technology or business model is brand new people do not have past experience or even enough knowledge to make judgments. In this case decision paralysis will occur. People will say: “Wait until I figure it out before buying this product?” Or “Wait let me think about it?” But in fact most people’s wait is a lifetime.

The reason for innovation failure is innovation itself and the answer lies on the surface of the puzzle. In the past if you could control the market you would certainly not want innovation to happen or at least not let it happen too quickly. This is the real secret behind so-called magical laws like Moore’s Law. Controlling the pace at which technology enters the market is a business secret for head enterprises.

But the problem is that more and more large enterprises are beginning to find that something is wrong. The market that was thought to be controllable is surging with dark currents even turning up huge waves. The opponent is no longer the original market’s second or third place barbarians break in and directly overturn the table. Intel has painstakingly operated in the CPU market for decades building an empire that seems unbreakable. At its peak even Apple had to bow its head for a while but empire’s gate was easily attacked by ARM from mobile device market. ARM’s new business model not only snatched away Intel’s original customers but also attracted many new players in smart device market to flock around it. The offensive and defensive situation reversed instantly.

This situation is by no means an isolated case and it is happening more and more frequently and faster. Today attempts to limit innovation to Routine Innovation alone have failed. More and more Radical Innovations Disruptive Innovations even Architectural Innovations are emerging in market. These innovations make left-brained thinkers in enterprise management extremely anxious they try to use detailed data rational analysis to convince customers but these methods which were effective in Routine Innovation field have no effect at all in new innovation field.

To solve this problem we need to bring back right-brained thinkers.

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