Page 53 - ENTREPRENEURSHIP Innovation and entrepreneurship

53231_Innovation and Entrepreneurship.qxd 11/8/2002 10:50 AM Page 46

46 THE PRACTICE OF INNOVATION

demands to be taken seriously. It demands to be staffed with the ablest
people available, rather than with whoever we can spare. It demands
seriousness and support on the part of management equal to the size
of the opportunity. And the opportunity is considerable.

II

THE UNEXPECTED FAILURE
Failures, unlike successes, cannot be rejected and rarely go unno-
ticed. But they are seldom seen as symptoms of opportunity. A good
many failures are, of course, nothing but mistakes, the results of greed,
stupidity, thoughtless bandwagon-climbing, or incompetence whether
in design or execution. Yet if something fails despite being carefully
planned, carefully designed, and conscientiously executed, that failure
often bespeaks underlying change and, with it, opportunity.
The assumptions on which a product or service, its design or its
marketing strategy, were based may no longer fit reality. Perhaps cus-
tomers have changed their values and perceptions; while they still buy
the same “thing,” they are actually purchasing a very different
“value.” Or perhaps what has always been one market or one end use
is splitting itself into two or more, each demanding something quite
different. Any change like this is an opportunity for innovation.
I had my first experience with an unexpected failure at the very begin-
ning of my working life, almost sixty years ago, just out of high school.
My first job was as a trainee in an old export firm, which for more than
a century had been selling hardware to British India. Its best seller for
years had been a cheap padlock, of which it exported whole shiploads
every month. The padlock was flimsy; a pin easily opened the lock. As
incomes in India went up during the 1920s, padlock sales, instead of
going up, began to decline quite sharply. My employer thereupon did the
obvious: he redesigned the padlock to give it a sturdier lock, that is, to
make it “better quality.” The added cost was minimal and the improve-
ment in quality substantial. But the improved padlock turned out to be
unsalable. Four years later, the firm went into liquidation, the decline of
its Indian padlock business a major factor in its demise.
A very small competitor of this firm in the Indian export business—
no more than a tenth of the size of my employer and until then barely
able to survive—realized that this unexpected failure was a symptom