Is Continuous Innovation Too Risky? – Forbes

While the idea of continuous innovation is great, not convinced that satisfying customers and investors at the same time is impossible. Apple is not just maximizing customers but also investors. It requires a strong leader, team autonomy, even secrecy culture.

Jack Welch, considered by many to be a leading practitioner of the idea, recognized in 2009 that shareholder value is a result, not a strategy. Worst of all, maximizing shareholder value creates the risk of disruptive innovation.

They studied their customers. They carefully researched the market and new technologies. They meticulously cultivated innovation. They stringently evaluated new development and weighed the cost of new investment against potential gains. And in the process, they missed disruptive innovations that opened up new customers and markets for alternative blockbuster products.

The solution to disruptive innovation: continuous innovation. But continuous innovation is almost impossible to achieve when the goal of the firm is maximizing shareholder value.

Apple hasn’t optimized its organization to maximize profit. Instead, it has made the creation of value for customers its priority.

Pursuing the goal of maximizing shareholder value produces less shareholder value than a sharp focus on delighting the customer.

via Is Continuous Innovation Too Risky? – Forbes.

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