We know that innovation drives prosperity and wellbeing. Information technology is the primal ingredient for sustainable business organization success, which is why government policymakers and smart business leaders captivate over its cultivation.

Many of our brightest people become entrepreneurs. But as their new businesses grow, they encounter e'er more roadblocks to innovation.

Larger organisations, including big businesses, universities, governments and even cities, are acutely susceptible.

The drive towards efficiency that has defined big business for decades epitomises this hidden set of risks. In an age of mergers and acquisitions, ruthless cost-cut and the prioritisation of short-term shareholder value, corporate giants may be sleepwalking to failure.

It is oftentimes from the margins and playful spaces that innovative ideas sally, time and over again finding unexpected applications. This happened with microwaves, post-it notes and even Viagra, originally developed to treat high blood pressure. Only it is an system'south leadership that truly nurtures or stifles innovation – even when it brings new risks.

Organisations need the capacity to adapt, and leaders should be barbarians at their own gates.

How Kodak quashed its brightest idea

Kodak had a long history of cultivating and embracing risky innovations. George Eastman, the company's founder, recognised this when he pivoted Kodak'southward core business from dry-plates to film, and from black and white to colour, despite hit profitable production lines in the short-term.

Decades afterward, Kodak blew its chance to lead the digital photography revolution. They got things one-half-right. Kodak engineer Steve Sasson actually invented the digital photographic camera in the company's R&D labs in the 1970s.

Blue skies research matters

Prototype: flickr/Ian Britton

His leap forrad was a product of Kodak's willingness to invest in bluish skies research. Merely having the space and capital for innovation is not enough. A business concern's leadership – and the culture they create – must then exist willing and agile plenty to embrace innovations.

The reactionary antibodies within Kodak's leadership rejected the digital photographic camera, fearing it would cannibalise existing business organisation. As Sasson later told the New York Times, "it was filmless photography, then management's reaction was, 'that'southward beautiful — simply don't tell anyone about it.'"

Kodak's management also focused on the flaws of early on digital cameras, with their dandy weight, boring processing times and low resolutions. They could not see the utility to millions of potential consumers of "proficient enough" digital camera engineering.

Kodak's rivals seized the opportunity, leaving the incumbent flailing in pursuit of patent royalties. Sasson's Kodak digital camera patent expired in 2007. Kodak filed for bankruptcy in 2012.

Xiaomi, the Chinese mobile phone visitor learning from history

Xiaomi, the rapidly growing Chinese mobile phone company, is determined not to echo Kodak's mistakes. The leadership appears humble plenty to have that disruptive innovations can come from anywhere.

Xiaomi co-develops new products with its user base of operations, which has become more of a fan base. This fiercely loyal customs, known as Mi fans, jump at the chance to try new software updates or products, and to play a part in developing the company's high-spec, low-cost phones.

Mi fans are non merely tolerant of imperfection, many of them devote large amounts of time to fixing product flaws.

Customers are participants in, rather than passive subjects of, the innovation process. Xiaomi credits its user base for almost a third of the new features that have been added to the phone'south operating organization in recent years.

And Xiaomi is willing to expand its product line in radical new directions: from water purifiers and rice cookers to drones and exercise kit. History tells u.s. that innovative firms tin can overreach and fail; it is too soon to tell whether Xiaomi will successfully navigate the roadblocks and chicanes that volition challenge its ability to innovate in the future.

Embedding a culture of constant renewal is hard. Institutional conservatism, timidity and short-termism are tempting pulls for leaders. Yet at that place are counter-examples, like IBM's bold decision to sell its PC business to Lenovo. A decade on, this tough call looks like one of the wisest moves in the company'south 105-yr history.

Radical ideas, rooted in deep science

It is hard to renew and revive, peculiarly when a big business organization appears to be winning. Enduring success requires a abiding fight for innovative spaces.

Working with other research partners such every bit universities and through joint ventures can assist secure these spaces for longer-term innovative thinking.

For example, Royal Tech Foresight allows major corporates like BT, Shell and Syngenta to partner with some of the world's top academics as they try to predict how technology will modify their industries over the next two decades.

How often practice business organization executives get to think deeply and seriously about how cognitive social marketing, nanorobots or the blockchain will touch on on their businesses? Carving out that space, and finding the correct partners to practise so, is how major businesses can sustain their competitive edge.

Within universities we discover that some of the most radical – and high impact – ideas are rooted in deep science. Simply academics solitary cannot push them frontward. We accept the patience, just we often lack the early on user engagement, the capital and marketplace-dynamism of corporate partners.

Such collaborative innovation may be the nigh powerful way to navigate the chicanes.