The Art and Craft of Business Innovation

By Associate Professor Stefan Meisiek, Director of Educational Practice in Business at the University of Sydney Business School.


Peter Drucker, maybe the most prolific management guru of the past century, saw innovation as key to corporate longevity and success. In his book Innovation and Entrepreneurship from 1985, he argued that innovation can’t be a special, discontinuous, ad hoc task of businesses, but must become a regular function of the organization. He aimed at stripping the mystery of novelty from the word innovation, to make it a routine management activity.

Companies need to innovate to survive in times of global markets, rapid technological development, hyper-connectivity, sustainability concerns, and shifting consumer preferences. But this is easier said than done. While ‘innovation”, ‘creativity’ and ‘disruption’ have become part and parcel of the public, political, and business discourse, most companies – large and small – are still over-reliant on past successes, and they often fail at turning creative endeavours into substantial competitive advantages. While the need for business innovation has increased tremendously since then, something prevents it from becoming routine. What could explain this knowing-doing gap?

Business innovation requires more than good management. This becomes obvious when we look at a common misconception. Innovation, so a common understanding, is about novel products and services. In fact, any novel product or service can be easily copied, and alone doesn’t provide a strategic advantage. Therefore, business innovation means changing the business across a number of elements: business model changes, process innovation, new organizational forms, human resources, products, services, bundles, branding, and customer engagement. And none of these elements can be dealt with in isolation. Any change leads to repercussions in the entire system. If business innovation is such a broad, underspecified endeavour, then it becomes a leadership task.

Leaders can invite and enable the forces of innovation across the organization.  They can make innovation a top priority and inspire employees to experiment and to make a difference. Leaders shape the context for innovation to happen. For example, Ed Catmul, the president of Pixar and Disney Animation Studios talks about creating stages for experts to perform on. This metaphor signals that leading for creativity and leading creative groups means to open carefully curated spaces for innovation work. The nature of work and organization moves over to the community style indicative of Pixar.

The role of management that Drucker imagines then begins to centre around the innovation process: Idea generation, recognizing opportunities, moving innovation to market.

Combining leadership that creates the context of innovation, and applying innovation management techniques, a number of companies are able to innovate repeatedly, and in a seemingly easy fashion. In the course “leading business innovation” we will be looking into companies that have been able to strike a balance between innovation management and innovation leadership, and we will uncovers some of their secrets of contraireness.

Associate Professor Stefan Meisiek will be facilitating a new elective ‘Leading Business Innovation’ in the University of Sydney Business School MBA Program.

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