The Week: Best of the blogs - Time to change the rules

I came out of education right into the middle of a recession and I remember the apparent lack of opportunity at the time. But you make your own opportunity, and that's what we call innovation.

The real question for businesses is what type of innovation - product innovation is one thing, but the real game-changers come from stuff that changes the rules of a market. Most business model innovations come from newcomers to an industry. Most established competitors find this type of innovation difficult because it often doesn't make economic sense for them.

This is a huge challenge. For every established business trying to develop a new model, there might be hundreds of entrepreneurs trying to do the same thing. And even if you can harvest the good ideas from your organisation, it's tricky to grow them in an environment where you are trying to accommodate two divergent and potentially conflicting games that operate to very different rules. Ideas are one thing, action quite another.

Everyone sat inside those organisations has the leverage to transform the model of the business they are in. When they try, the temptation is for the business to wrap such ideas in short-term ROI, judge it by existing rules, implement it through an existing structure, make it fit an existing process. You don't manage innovation. You need to get the organisation, with all that process, all that hierarchy, all those assumptions, out of the way. In order to create a purple cow, you have to get rid of a few sacred ones first.

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