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Innovation: Why the ‘outrigger’ model worked for IBM

  The simple solution is not found in persistence, but in changing the model. “If you wish to think differently, then start by doing it differently”. Avoiding risk One risk with a radical innovation model may be that the resulting ideas and outcomes are not seen as “core business” and thus need to be discarded. […]
Roger La Salle
Innovation: Why the ‘outrigger’ model worked for IBM

 

The simple solution is not found in persistence, but in changing the model. “If you wish to think differently, then start by doing it differently”.

Avoiding risk

One risk with a radical innovation model may be that the resulting ideas and outcomes are not seen as “core business” and thus need to be discarded. Indeed, so common is the practice of discarding non-core activities that there are complete businesses that do nothing more than collecting and commercialising so-called “orphan technologies” that have been discarded by larger companies as non-core.

It beggars belief that this mindset still prevails, especially in the light of some classic successes.

Nokia, the company that essentially “owned” the mobile phone business before Apple, was in the lumber industry before it decided to reinvent itself and become the number one mobile phone maker.

IBM, or Big Blue, the supplier of major computer systems in days when computer centres occupied entire floors, one day came to the realisation that the personal computer may be a new horizon. This was something quite new to the company and its major systems engineering thinkers.

In order to implement the personal computer development and avoid the risk to the “mothership” if the idea was just a “flash in the pan” and thus a potential threat to its brand, IBM took a novel approach.

Rather than doing the development in-house, a development that would have taken a decade or more with all the internal bureaucracy and inertia of IBM, the company put a small team together, in a separate building, gave them an objective and let them at it. The outcome was the IBM PC, developed and delivered in just 12 months.

We might call this the “outrigger” model. This model has a lot of potential.

With the right person to lead the charge, some freedom to operate and some budget, almost without doubt the seed of an idea or opportunity will soon grow into a profitable outcome.

The key to success is to identify a new initiative, put a small team together, fund them and set them adrift to survive or succumb. Let them be an “outrigger” to your core business so they can do no harm to the “mothership” or the brand if they fail.

The cost is probably far less than funding an innovation bureaucracy, and the risk is minimal, but the likelihood of success is high.

There is a clear message here: if you are looking to get a different outcome, you need to provide a different approach. Perhaps the outrigger model presents one possibility!