Tuesday, March 24, 2009

Innovation versus Idiots How to stay on the right road

Still catching up with some of the older pending posts in my draft bin. Found some from Harvard Business Publishing, especially this one by Bill Taylor.

The article of particular interest was Wisdom of Warren Buffett: On Innovators, Imitators, and Idiots in which he provides a hour-long television interview with Buffett in which he talks about the "natural progression" of how good new ideas go wrong. The "three I's":
  1. Innovators, who see opportunities that others don't.
  2. Imitators, who copy what the innovators have done.
  3. Idiots, whose avarice undoes the very innovations they are trying to use to get rich.
Taylor tells us that, the problem, in other words, isn't with innovation -- it's with the idiocy that follows.
So how do we as individuals (not to mention as companies and societies) continue to embrace the value-creating upside of creativity while guarding against the value-destroying downsides of imitation? The answer, it seems to me, is about values--about always being able to distinguish between that which is smart and that which is expedient. And that takes discipline. Can you distinguish between a genuine innovation and a mindless imitation? Are you prepared to walk away from ideas that promise to make money, even if they make no sense?
So if Buffet warns us of the path to economic destruction, but what do we need to do to keep on the right road? Scott Anthony provides another insightful post, again from Harvard Business Publishing in which he discuses the Three Steps to Innovating in Struggling Industries.
  1. Lower the cost of testing.
  2. Creatively tap into outside resources.
  3. Ruthlessly prune the portfolio.

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