2.2 Organisational implications
Once a product has reached the market, it typically goes through a life cycle. Initially several rival designs compete to outperform each other and key features are improved. Conventional wisdom has it that gradually a dominant design emerges. Subsequently, manufacturers devote their attention to improving the manufacturing process, for example, using machine- rather than hand-blown bulbs for incandescent lights. Manufacturing costs are usually substantially reduced; in the case of the electric light bulb, for example, labour time has fallen from (originally) about an hour to less than 20 seconds. At some point another radical innovation comes to challenge the technology, e.g. fluorescent lights (Taylor, 1996) or, in an increasingly energy conscious-world, solid-state lamps may crossover from the automotive industry and make both these forms of domestic light obsolete. LED lights are making increasing inroads in the lighting market (Cardwell, 2013).
Foster (1986) presents a graphic account of the impact of radical and incremental innovations, shown in Figure 5 as a series of s-curves.
With each radical innovation progress is initially slow, as research, design and development efforts produce limited improvements in technical performance; but subsequent development produces rapid improvements in the performance (curve A). Then, another radical innovation comes along that eventually replaces the existing technology (curve B). For example, when steamships replaced sailing ships, ballpoints replaced fountain pens, or aluminium replaced steel beverage cans.
This distinction between radical and incremental change matters because managers have to deal with both. In most cases, depending on circumstances, dealing with either one alone is unlikely to be sufficient.
Tushman and O'Reilly’s (1996) article on ambidextrous organisations illustrates patterns of organisational evolution in various industries that encompass long periods of incremental change alternated with discontinuous or radical change. Their message is two-fold. First, to underscore the power of an organisation’s culture; culture being the set of beliefs, attitudes and behaviours that made the organisation in question ‘what it is today’. Second, to notice that things change both incrementally and radically, and that organisations need to respond to both. Culture may help with the response to incremental changes, but ‘that which made the organisation what it is today’ may actively prevent it becoming what it needs to be tomorrow. To borrow a term from the article, managers need to be able to ‘juggle’.