Surviving Innovation

In a recent Wall Street Journal article (Sat/Sun, January 7/8, 2012), columnist Spencer Ante outlines how corporations survive beyond the corporate life expectancy of 40 years, and how to avoid the terrible toll of not responding to ongoing innovation. Most of us work for non-profits, but the lessons are easily applicable.

Business leaders, academics, and venture capitalists say the companies that are able to survive in a world of constant innovation demonstrate the following characteristics:

• They are ruthless about change;
• They are not afraid to cannibalize their big revenue generators to build new businesses;
• They make frequent, but small, acquisitions that bring in new technologies and open new markets;
• They also are the recipients, on occasion, of good luck.

On the other hand, the ones that don’t make it:

• Are burdened with beauroeucracy;
• Spend too much time on the defensive;
• Try to catch up too late by lurching into big acquisitions;
• They also are the recipients, on occasion, of bad luck.

The article stated that top executives at large successful companies display the same characteristics as executives at small successful companies: they are smart, able to diversify, and are focused on the company’s core mission.