5 Innovation Styles for Organizing the

Innovation Process
The Cauldron

The PacMan

The Fertile Field

The Explorer
The Spiral Staircase

The Cauldron
Unleash entrepreneurial energy in a concentrated mixture of
talent, ideas and resources

Key Levers
Internal markets for new ideas
Venture capital model of internal entrepreneurs seeking funding
from both internal and approved external sources
Use of peers, rather than bosses, to screen and evaluate
opportunities
Loose structure and frequent organizational changes

Example: Enron
You cannot control the atoms within a nuclear fusion reaction. We
allow people to go in which ever direction that they want to go. And
theyre incented to do all the steps of innovation themselves. And
around that, we put broad risk-reward controls.
Ken Rice,
Enron Capital & Trade Resources
2

The Fertile Field

Cultivate and harvest a rich portfolio of strategic assets and
core competencies

Key Levers
Manage the overall portfolio of core competencies and strategic
assets
Bring people together across organizational boundaries to share
information and discover opportunities
Create mechanisms that gather, disseminate, and track new ideas
and learnings for all employees
Determine when and if to spin off a growing business

Examples
Emerson Electric (Growth Process)
Royal Dutch/Shell (Gamechanger)
Lucent Technologies
3

The Spiral Staircase

Continuously improve and innovate in the core business

Key Levers
Create a profound sense of core purpose
Let everyone know their innovation contribution is important
Give teams the leadership and autonomy they need to win
Create a culture of experimentation and commitment to learn

Examples
Charles Schwab
British Airways
Allstate (BVP Process)

The PacMan
Acquire successful innovators and integrate competencies
into existing businesses

Key Levers
Use strategic intent to guide the entrance into new markets and
development of new competencies
Develop alternatives early in the innovation process
Take stakes in promising start-ups, using the market as a
screen
Assess competitive responses to strategy innovations

Examples:
Cisco
Microsoft, WorldCom
5

The Explorer
Unleash entrepreneurial energy in a concentrated mixture of
talent, ideas and resources

Key Levers
Aspire beyond what seems possible
Design and carry out effective and low-cost experiments
Use Strategic Intent to guide the entrance into new markets and
development of new competencies
Emphasize continuous, cumulative learning

Examples:
Monsanto (15 years to shift from chemicals to life sciences)
Corning (12 years to develop optical fiber)
Motorola (10 years to develop cell phones)
6

Characteristics of Various Innovation Styles

Is the primary focus to...

Develop new
rapidly

Improve on
existing
business?
Spiral Staircase

Create new
businesses?

How well defined is

the opportunity and
how long will it
take?

Cauldron

Do you need new

assets and
competencies?

Near term with

defined
market?

Long term with

undefined
market

Leverage
existing over
time
Fertile Field

Acquire in
marketplace
PacMan

How can you best

develop new assets
and competencies?

Develop
internally
7

Explorer