The Difference Between Sustaining Innovation and Disruptive Innovation

Summary

The video discusses the dynamic challenges faced by both startups and large enterprises when it comes to innovation. Startups typically focus on disruptive innovation and aim to grow into sustaining businesses, while enterprises must balance their need for innovation with the complexities of protecting their established brands, managing HR, and complying with regulations. The key takeaway is that innovation in large organizations requires creative experimentation within set boundaries to avoid jeopardizing existing processes or brand value.

Takeaways

• 😀 The Innovation Spectrum includes two ends: sustaining innovation (enterprises) and disruptive innovation (startups).
• 😀 Startups aim to evolve into sustaining innovations to capture market growth and become large companies.
• 😀 Enterprises, while larger, face different challenges when trying to integrate startup culture, including the protection of their brand.
• 😀 A startup can experiment aggressively and fail without significant consequences, but large enterprises have more at stake, including brand value.
• 😀 It is not enough for enterprises to adopt startup perks like cool office spaces or Nerf guns; true cultural integration requires more.
• 😀 Large enterprises have bigger revenues, bigger business lines, and more regulations to consider when experimenting or innovating.
• 😀 Talent management is crucial—enterprises need to match process-oriented people with chaos-seeking innovators.
• 😀 Legal issues are important for enterprises, particularly in regulated industries; aggressive startup-style experimentation cannot ignore legal implications.
• 😀 Lean-type activities are recommended for enterprises, but they need ground rules to ensure creative experimentation doesn't damage the core business.
• 😀 Enterprises need to establish a framework that allows for internal startup innovation while safeguarding their brand and existing processes.
• 😀 Effective internal innovation in large enterprises requires balancing creativity with the protection of the 'mothership' (core business).

Q & A

What are the two ends of the spectrum discussed in the transcript?

The two ends of the spectrum are startups that want to become enterprises and enterprises that seek to incorporate a startup environment ethos.

What is 'The Innovation Spectrum' mentioned in the script?

'The Innovation Spectrum' refers to the range of innovation types, from sustaining innovation (typically associated with enterprises) to disruptive innovation (typically associated with startups).

How do startups typically differ from enterprises in terms of innovation?

Startups are usually focused on disruptive innovation, aiming to disrupt markets and industries, while enterprises focus on sustaining innovation, improving and scaling existing products or services.

What is the goal for startups, according to the speaker?

The goal of startups is to become more sustaining because that is where the market growth lies, and it is the way to scale and become a large company.

What challenge do enterprises face when trying to adopt startup culture?

Enterprises cannot just adopt superficial startup elements like cool office spaces or casual environments. They must also manage bigger complexities like brand protection, HR issues, and legal regulations.

Why do enterprises need to be cautious with innovation, according to the speaker?

Enterprises need to protect their established brand and existing processes. They can't take the same risks as startups because they have larger business lines, more customers, and legal compliance requirements.

What makes startups more capable of aggressive experimentation compared to enterprises?

Startups can afford to take more risks because if they fail, the impact is minimal—often only the founder's personal loss. Enterprises, however, risk damaging their larger brand and customer base.

How do enterprises balance creative experimentation and protecting their brand?

Enterprises can foster innovation by setting up ground rules that allow for creative experimentation within the structure of the organization, ensuring that new ideas don't harm the brand or existing processes.

What legal and regulatory challenges do enterprises face that startups don't?

Enterprises, especially those in regulated industries, must comply with legal requirements and cannot engage in unregulated or risky experimentation, as startups can.

What is the significance of 'lean type activities' for enterprises?

While lean activities—such as testing and iterating quickly—are still recommended for enterprises, they must be conducted within the boundaries of legal and organizational constraints to avoid potential risks.