by Vijay Govindarajan
AS ESSENTIAL as it is to the long-term health of organisations, knowledge about best practices for managing strategic innovation is scarce. For every strategic experiment studied, we observed a unique approach to management. There is no commonly accepted principle or standard. Management theory has evolved rapidly over the past few decades. For example, the once-popular notion that the essence of strategy is to maintain stability has given way to acceptance that stability is illusory. Modern strategists do not seek to build and defend a competitive advantage from change by, say, erecting barriers to entry. Instead, they recognise that to stay ahead, corporations must always look for new markets and new sources of competitive advantage. This shift in emphasis in strategy formulation demands a similar shift in the field of strategy execution, but the latter field lags. Although the what of strategy now focuses on innovation and change, knowledge of the how is still nascent. Truly understanding what works and why, requires multi-year, qualitative, interpretive study. The study of strategic innovation resembles history or psychology more than finance or economics. Furthermore, the little existing research-based knowledge emphasises the very early stages of managing strategic innovation, particularly the generation of and evaluation of creative ideas. That leaves much terrain uncharted... Limits to innovation have less to do with technology or creativity than with management skill.