The New Rules for Bringing Innovations to Market
58
HARVARD BUSINESS REVIEW
The more networked a market is, the harder it is for an innovation to take hold. Smart innovators learn to orchestrate marketwide change by starting from the endgame they desire.
New Rules for Bringing
Innovations by Bhaskar Chakravorti
to Market
I
T'S TOUCH to get consumers to adopt innovations-and it's getting harder all tbe time. As more markets take on tbe characteristics of networks, once-reliable tools for introducing new products and services don't work as well as they used to. The efficacy of advertising, promotions, and tbe sales force bas declined; it is more difficult for innovators to rise above tbe din of information from competing sources; and only bard-to-manage relationship skills seem to make a difference. Executives need to rethink the way they bring innovations to market. By using game theory, they can develop new strategies for playing in today's networked world. By understanding how social, commercial, and physical networks behave, innovators can develop new tactics. And by working back from an endgame, they can change markets from foes to allies.
59
MARCH 2004
T h e New Rules f o r B r i n g i n g I n n o v a t i o n s t o M a r k e t
Nature's Way
Markets, by their very nature, resist new ideas and products. Despite the risks involved with developing and launching new innovations, companies love them because they drive profits, growth, and shareholder value. Innovations reap sucb handsome rewards because they are risky. Markets, meanwhile, kill most new products and services and accept the rest only grudgingly. For instance, television took more than three decades to become a mass medium in the United States-from tbe first experimental broadcasts in the late 1920s to widespread acceptance in tbe 1960s. Likewise, tbe number of transistors on a semiconductor chip has doubled every 18 to 24 months, as Intel cofounder Gordon Moore predicted, but the productivity gains from tbe
HARVARD BUSINESS REVIEW
The more networked a market is, the harder it is for an innovation to take hold. Smart innovators learn to orchestrate marketwide change by starting from the endgame they desire.
New Rules for Bringing
Innovations by Bhaskar Chakravorti
to Market
I
T'S TOUCH to get consumers to adopt innovations-and it's getting harder all tbe time. As more markets take on tbe characteristics of networks, once-reliable tools for introducing new products and services don't work as well as they used to. The efficacy of advertising, promotions, and tbe sales force bas declined; it is more difficult for innovators to rise above tbe din of information from competing sources; and only bard-to-manage relationship skills seem to make a difference. Executives need to rethink the way they bring innovations to market. By using game theory, they can develop new strategies for playing in today's networked world. By understanding how social, commercial, and physical networks behave, innovators can develop new tactics. And by working back from an endgame, they can change markets from foes to allies.
59
MARCH 2004
T h e New Rules f o r B r i n g i n g I n n o v a t i o n s t o M a r k e t
Nature's Way
Markets, by their very nature, resist new ideas and products. Despite the risks involved with developing and launching new innovations, companies love them because they drive profits, growth, and shareholder value. Innovations reap sucb handsome rewards because they are risky. Markets, meanwhile, kill most new products and services and accept the rest only grudgingly. For instance, television took more than three decades to become a mass medium in the United States-from tbe first experimental broadcasts in the late 1920s to widespread acceptance in tbe 1960s. Likewise, tbe number of transistors on a semiconductor chip has doubled every 18 to 24 months, as Intel cofounder Gordon Moore predicted, but the productivity gains from tbe