Radical Innovation Research Program
Lally School of Management and Technology, Rensselaer Polytechnic Institute

Phase I (1995-2000):
Purpose:
To understand the management practices in large established firms associated with breakthrough, or radical innovation.

Reason:
Applying management practices associated with incremental innovation to projects fraught with high uncertainty is inappropriate and will likely kill the project every time.

Approach:
The research was unique for the academic world as it was based on a longitudinal study of 12 Radical Innovation projects in ten large, established firms and conducted by a multi-disciplinary team of Rensselaer faculty. This enabled the team to observe practices that worked or did not as these events occurred, not through retrospective analysis. It was sponsored by the Industrial Research Institute and funded by the Sloan Foundation.

Output from Phase I:

1. Publication of the book Radical Innovation: How Mature Firms can Outsmart Upstarts (Harvard Business School Press, 2000) and numerous academic papers
2. Identification of seven management challenges that need to be overcome and four, not two, uncertainties to be managed.
3. Development of a model for managing radical innovation within the confines of the established firm (labeled a radical innovation hub), with elaboration of the interface mechanisms necessary. Antithetical to off-site incubator model.
4. Development of Transition Readiness Assessment and Learning Plan tools for management use.
5. Draft of Radical Innovation Maturity Assessment Tool.

Phase II (2001-2005)
Purpose:
To understand how organizations can initiate and develop a sustainable radical innovation capability.

Reason:
These corporate level initiatives have been tried and fail on a regular basis. Empirical data indicates the average lifespan of a “New Ventures” division, or “Business Ventures Group” is 4 years.

Approach:
Longitudinal Study of 12 Corporate Initiatives committed to building a sustainable Radical Innovation Capability (over and above single, ad hoc projects). Again, the research was led by multi-disciplinary team of 10 faculty from Rensselaer as well as Babson College. The research was sponsored by the Industrial Research Institute and this time funded by Corporate participants.

Output from Phase II:

1. Publication of the book Grabbing Lightning: Building a Capability for Breakthrough Innovation (Jossey Bass February 2008) and numerous academic papers.
2. Definition of the elements for an effective innovation system, including models of successful RI portfolio development and management, based on company history and culture.
3. Identification of three distinct competencies, Discovery, Incubation and Acceleration that comprise the DIA Model.
4. Development of Portfolio Evaluation Tool to value the portfolio, given high uncertainty and lengthy timeframes required for commercial results, to help portfolio manager communicate the value of the RI organization's activities to the rest of the company.
5. Completed a large scale benchmarking survey of RI organizational structures and practices, and correlated management practices to RI success.
6. Refinement and validation of the Radical Innovation Maturity Assessment diagnostic tool.

Summary of Key Learning:
Radical innovation maturity has to be considered as three distinctive sets of competencies, not one. Each requires its own skills, organizational structure, processes and metrics. The research has identified a set of "elements of initiation" required to increase the likelihood of success. It has identified a set of challenges firms face in evolving their RI capabilities, and has documented mechanisms firms are using to circumvent those challenges.

Four exemplar approaches to building a RI capability have been identified, based on distinctive company cultures. In no way does the "radical innovation hub" appear to be a "one size fits all" answer…but it is clear that the principles of interface management drive RI success, and this is practiced differently in companies of varying cultures. The models are:

1. Competency and Readiness
2. Strategy
3. Execution
4. Rationale

Cohort III (January 04 - December 05):
Purpose:
To serve as a validation set of companies for Phase II learning.

Reason:
To build a community of practitioners all concerned with building sustainable and productive radical innovation capabilities in their firms.

Approach:
Nine companies participated in the cohort with a designated team of three people involved in major innovation initiatives. Four workshops were held over two years. Each workshop focused on the most recent findings from the Radical Innovation Phase II study and delved into one or two rather specific challenges that had been identified.

Output of Cohort III:
Researchers and cohort companies learned from the study by:

1. Reviewing the most recent findings from the Phase II companies;
2. Receiving feedback on whether the RI research team interpretations of the data made any sense given specific company experiences; and
3. Surfacing new issues that cohort members are experiencing that were missed in the initial set of companies.
4. Benchmarking where their companies stood relative to a particular issue.
5. Developing company specific action plans.