Innovation – Way towards sustained growth
Global organizations follow a three-step procedure to attain growth and profit: innovate, scale-up and adapt. Interestingly, these three steps embody a contradiction. In order to exploit the creativity of the individuals who create innovations, organizations have to deploy them worldwide. But size may distort the innovation. Another paradox pertains to scaling-up and adapting. Cost savings derive from selling standard products everywhere, enabling extended production runs and learning-curve savings. That is, there is a continuous pressure to make products standard. But local markets often differ widely in culture, preferences and tastes. Adapting products for each type of market can be fatal for cost and profit margins. At the same time, excess-standardization ruins the product. General Motors over-standardized its cars, so that the once powerful car brands became homogenized look-alikes. The ultimate goal of innovation is sustained competitive advantage. Thus, it becomes imperative t...