Page 161 - ENTREPRENEURSHIP Innovation and entrepreneurship

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154 THE PRACTICE OF ENTREPRENEURSHIP

also the markets each serves and the distributive channels it uses, in
order to estimate their position on the product life cycle. How much
longer will this product still grow? How much longer will it still main-
tain itself in the marketplace? How soon can it be expected to age and
decline—and how fast? When will it become obsolescent? This enables
the company to estimate where it would be if it confined itself to man-
aging to the best of its ability what already exists. And this then shows
the gap between what can be expected realistically, and what a compa-
ny still needs to do to achieve its objectives, whether in sales, in mar-
ket standing, or in profitability.
The gap is the minimum that must be filled if the company is not
to go downhill. In fact, the gap has to be filled or the company will
soon start to die. The entrepreneurial achievement must be large
enough to fill the gap, and timely enough to fill it before the old
becomes obsolescent.
But innovative efforts do not carry certainty; they have a high
probability of failure and an even higher one of delay. A company
therefore should have under way at least three times the innovative
efforts which, if successful, would fill the gap.
Most executives consider this excessively high. Yet experience
has proved that it errs on the low side, if it errs at all. To be sure,
some innovative efforts will do better than anyone expects, but oth-
ers will do much less well. And everything takes longer than we
hope or estimate; everything also requires more effort. Finally, the
one thing certain about any major innovative effort is that there are
going to be last-minute hitches and last-minute delays. To demand
innovative efforts which, if everything goes according to plan,
yield three times the minimum results needed is only elementary
precaution.
4. Systematic abandonment; the Business X-Ray of the existing
business, its products, its services, its markets, its technologies; and
the definition of innovation gap and innovation need—these together
enable a company to formulate an entrepreneurial plan with objec-
tives for innovation and deadlines.
Such a plan ensures that the innovation budget is adequate. And—
the most important result of all—it determines how many people are
needed, with what abilities and capacities. Only when people with
proven performance capacity have been assigned to a project, supplied
with the tools, the money, and the information they need to do the
work, and given clear and unambiguous deadlines—only then do we