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42 THE PRACTICE OF INNOVATION

and to the tremendous changes in knowledge, sophistication, and
management capacity of the world’s farmers.
The unexpected success of appliances at R. H. Macy’s was a
symptom of a fundamental change in the behavior, expectations, and
values of substantial numbers of consumers—as the people at
Bloomingdale’s realized. Up until World War II, department store
consumers in the United States bought primarily by socioeconomic
status, that is, by income group. After World War II, the market
increasingly segmented itself by what we now call “lifestyles.”
Bloomingdale’s was the first of the major department stores, espe-
cially on the East Coast, to realize this, to capitalize on it, and to inno-
vate a new retail image.
The unexpected success of laboratory instruments designed for the
hospital in industrial and university laboratories was a symptom of the
disappearance of distinctions between the various users of scientific
instruments, which for almost a century had created sharply different
markets, with different end uses, specifications, and expectations. What
it symptomized—and the company never realized this—was not just
that a product line had uses that were not originally envisaged. It sig-
naled the end of the specific market niche the company had enjoyed in
the hospital market. So the company that for thirty or forty years had
successfully defined itself as a designer, maker, and marketer of hospi-
tal laboratory equipment was forced eventually to redefine itself as a
maker of laboratory instruments, and to develop capabilities to design,
manufacture, distribute, and service way beyond its original field. By
then, however, it had lost a large part of the market for good.
Thus the unexpected success is not just an opportunity for inno-
valion; it demands innovation. It forces us to ask, What basic changes
are now appropriate for this organization in the way it defines its busi-
ness? Its technology? Its markets? If these questions are faced up to,
then the unexpected success is likely to open up the most rewarding
and least risky of all innovative opportunities.
Two of the world’s biggest businesses, DuPont, the world’s largest
chemical company, and IBM, the giant of the computer industry, owe
their preeminence to their willingness to exploit the unexpected suc-
cess as an innovative opportunity.
DuPont, for 130 years, had confined itself to making munitions and
explosives. In the mid-1920s it then organized its first research efforts
in other areas, one of them the brand-new field of polymer chemistry,
which the Germans had pioneered during World War I. For several