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Five Tips for Managing Innovation
Published Wednesday, November 13, 2013

Why do some firms become master innovators while their brethren struggle? We can learn the answers by examining the success and ultimate failure of Kodak and Polaroid. Here are five lessons from these companies on managing innovation:

  1. Relentlessly focus on customer needs: Kodak rode the wave of film roll photography because it made photography convenient. “You click, and we will do the rest”, epitomized the innovation focus of Kodak for almost a century. Over the first 25 years, Kodak beat every other competitor by its relentless focus on the innovation that mattered the most for its success.
  2. Treat tunnel vision as a great friend: A race car driver is so focused on the track that he develops a tunnel vision wherein everything other than the immediate road ahead becomes invisible to the eyes. This is what makes him successful. This is why Kodak dominated the photography world for 100 years – by continuously improving the film. For the most part, tunnel vision is not a disability for organizations but a tool for survival and success. So when you find yourself frustrated with lack of major innovations, know that your business depends on same-old same-old innovations for success.
  3. Know when tunnel vision is the enemy: When the car race moves from a race track to a dirt track the good old friend tunnel vision becomes a liability. This happens to firms too. Kodak and Polaroid continued with their tunnel vision even after the advent of digital imaging. While customers were looking for better digital cameras, polaroid was busy innovating with printers on top of cameras and Kodak was busy making photo CDs. Knowing the difference between when tunnel vision is good and when it is bad can make you a far more effective innovator.
  4. Don’t view the future with a rosy lens of past capabilities:  Often, what made you successful yesterday will also make you successful tomorrow.  Unfortunately what makes you successful also often eventually kills you. What made Kodak and Polaroid successful in 1960 were the same capabilities that made it successful in 1970 and 1980. Polaroid thought that people will continue to need instant prints and Kodak thought that consumers will continue to value great prints. They were right until mid 1990s. After that a new set of capabilities became the key driver of success. Since film majors continued to rely on past capabilities for future innovation success, their performance began to decline and they had to eventually exit.
  5. Focus on profit impact of innovations: Just because you have a great innovation doesn’t mean it will also help you make money. When an innovation destroys your profits instead of enhancing profits, you will not want to launch that innovation. This is exactly what happened with Kodak and Polaroid. Digital imaging threatened to reduce their profits. As a result, in spite of great products, they did not find the will to aggressively commercialize them in the market. This lack of will is understandable. If they had looked at the profit impact of innovations early on, they could have transformed the innovation. But they took too long to start thinking about profits impact and thus were left with too little time to convert a profit destroying innovation to a profit creating innovation. The core reason for their decline and end was their inability to think about profit impact of the innovation. Don’t make the same mistake.

In the end, the innovation success depends not just on these five tips but on how you incorporate them cohesively into an innovation strategy. Do you have an innovation strategy that incorporates the above five learnings?


Dr. Ankush Chopra is an innovation expert with nearly two decades of experience in leading and enabling transformations across the globe, including projects within Citibank and Proctor and Gamble.  He is a Professor of Innovation at Fribourg School of Management, Switzerland and former Assistant Professor of Management at Babson College. His research focuses on issues such as overcoming challenges of innovation and transforming business and organizations. Chopra has a Ph.D. in Strategy from Duke University and an MBA from Indian Institute of Management, Bangalore and received his under graduate degree in Commerce from Delhi University. Chopra can be reached at .

His new book, The Dark Side of Innovation, is available for purchase at as well other fine booksellers.

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