When rapid environmental change is endemic, old methods fail

Many accounts of innovation, entrepreneurship, change, and growth have focused on the successful efforts of “high tech” firms pioneering changes the rest of industry eventually had to adapt to. The “low tech” or “mature” firms seeking to adapt have often been characterized as change-resistant organizations whose sluggish, inept managerial modes fail to accomplish effective response. Fair or not, the popular impression is that high tech firms are innovative, entrepreneurial, and flexible, whereas mature firms are not.

Successful major innovations in mature-industry firms are all the more impressive because they must overcome a variety of innovation dilemma that were identified long ago (e.g., Quinn 1979; Miller & Friesen 1980). Slow response to external change can be followed by frantic, ineffectual efforts to catch up. Scarce R&D dollars may be devoted to poorly understood projects, particularly where little research or product development has taken place for years, and radical change can derail firms already near the edge. New developments may be starved in vain hopes of preserving once-dominant products, on the reasoning that successful products should not be cannibalized. Or new efforts may simply fail.

In short, for mature businesses especially, innovation is often risky, poorly understood, and poorly executed. All these responses disclose a common failure to respond entrepreneurially to the changing competitive environment. Examples will illustrate their relevance today.