Technology and globalization have greatly reduced the length of modern business cycles. Everything is moving faster, and the time between cycles has shortened dramatically.
Successful organizations do not wait to innovate. They innovate continuously and quickly. Innovative organizations measure speed in two significant dimensions: speed to market and speed to failure. Both measures are critical.
The faster you innovate, the faster you get new products and services to market. You can’t have innovation without failure, and the best way to fail is to fail quickly.
The pharmaceuticals industry, which depends on continuous innovation and speed to market, understands this dichotomy and has learned to live with it.
Most pharmaceutical companies rely on a two-stage approach to innovation. In the primary stage, the emphasis is on discovery and testing. In the secondary stage, the focus shifts to success and refinement. The initial stage focuses on the abstract and the ideal, while the later stage zooms in on practical applications for real-world markets.
Both stages are necessary. The initial stage is where the failures take place. The later stage is where the product emerges. In the early stage, failure is not only acceptable, it is expected — because the whole purpose of the early stage is separating winners from losers. Only the winners are sent ahead to the later stage, where they are groomed and prepared for market success.
The innovation strategies used in the pharmaceutical business offer valuable lessons for all of us, and are worthy of deeper study. I especially like the concept of a logical, repeatable process that begins with abstractions and ends with the creation of real products that generate measurable value for the enterprise.
If you want to learn more, I recommend a Harvard Business Review article entitled A More Rational Approach to New-Product Development by Eric Bonabeau, Neil Bodick, and Robert W. Armstrong.
It always helps to remember that innovation is a both a combinatorial and a collaborative phenomenon. It doesn’t happen in a vacuum, and you can’t do it alone.
That’s why peer-to-peer interaction among CIOs and other IT leaders is essential for continuous innovation. I look forward to meeting you and speaking with you personally at an upcoming CIO Executive Leadership Summit. Please check the schedule to find the next event in your area.