The most significant barrier to innovation is that organizations are designed to protect their main business. This means they have many disincentives to invest in and nurture new ideas and business units that will define their future.
An excellent book on this topic is ”Loonshots” by Safi Bahcall. He outlines the conditions required for innovation, one of which is that if you don’t create a barrier between your “franchise” and your “innovation,” the franchise will always win.
We experienced this at Amazon. When it was time to invent our digital media offerings, Jeff understood that a different management approach was required for new product innovation versus the core business.
For example, instead of asking me to build new digital media products while I was managing the core US Books, Music, and Video businesses, he pulled me out of that role, and I was made a Single-Threaded leader for digital media—building what would become Amazon Music and Prime Video.
The other important management decision Jeff made was that he prioritized spending time with me to brainstorm, ideate, iterate, and manage these new businesses. I met with him multiple times a week to align on the “who”, “what”, and “how” we were building in digital media. This meant that my decisions and plans were equally Jeff’s decisions and plans. We were aligned, and Jeff was all-in on what we were doing.
We would never have achieved success without Jeff’s support and approval; the resistance and gravitational pull of the rest of the company would have killed these new businesses in their early years, when they were struggling to grow and make a profit.
You see, a new product or service is like a newborn baby — turning this baby into an effective adult is going to require a lot of time, care, and feeding. Everyone else in the company is managing an adult business, so when they look at your new venture, they just see a baby draining the enterprise’s resources rather than an adult contributing new ones.
The takeaway for executives:
a) Innovation is not a side gig. If your leaders are managing both the core and the new offerings, the core will always take priority.
b) Separation is necessary. New ideas need to be nurtured in an environment free from the biases of the established business.
True innovation requires both the courage to take your best leaders and builders away from your biggest businesses and the patience and support to build new ones.
