Page 65 - ENTREPRENEURSHIP Innovation and entrepreneurship

53231_Innovation and Entrepreneurship.qxd 11/8/2002 10:50 AM Page 58

58 THE PRACTICE OF INNOVATION

service area) and the values and expectations of its customers;
— An internal incongruity within the rhythm or the logic of a
process.

I

INCONGRUOUS ECONOMIC REALITIES

If the demand for a product or a service is growing steadily, its
economic performance should steadily improve, too. It should be
easy to be profitable in an industry with steadily rising demand. The
tide carries it. A lack of profitability and results in such an industry
bespeaks an incongruity between economic realities.
Typically, these incongruities are macro-phenomena, which occur
within a whole industry or a whole service sector. The major oppor-
tunities for innovation exist, however, normally for the small and
highly focused new enterprise, new process, or new service. And usu-
ally the innovator who exploits this incongruity can count on being
left alone for a long time before the existing businesses or suppliers
wake up to the fact that they have new and dangerous competition.
For they are so busy trying to bridge the gap between rising demand
and lagging results that they barely even notice somebody is doing
something different—something that produces results, that exploits
the rising demand.
Sometimes we understand what is going on. But sometimes it is
impossible to figure out why rising demand does not result in better
performance. The innovator, therefore, need not always try to under-
stand why things do not work as they should. He should ask instead:
“What would exploit this incongruity? What would convert it into an
opportunity? What can be done?” Incongruity between economic
realities is a call to action. Sometimes the action to be taken is rather
obvious, even though the problem itself is quite obscure. And some-
times we understand the problem thoroughly and yet cannot figure
out what to do about it.
The steel “mini-mill” is a good example of an innovation that suc-
cessfully exploited incongruity.
For more than fifty years, since the end of World War I, the large,
integrated steel mill in developed countries did well only in wartime.
In times of peace its results were consistently disappointing, even