HP Innovation Journal Issue 01: Winter 2015 | Page 8

LEARNING FROM
HISTORY
BY DOUG WARNER,
VICE PRESIDENT,
HEAD OF STRATEGY AND INCUBATION
How HP can avoid the
Innovator’s Dilemma, drive
disruptive innovation, and
create the new businesses
of tomorrow
We can learn quite a lot from history. Let’s
journey back to the year 1940, when two
young engineers were working on the
future from their garage. Having outgrown
their space and ready for so much more, off
they went to Page Mill Road in Palo Alto to
create HP’s first office. In the years since,
HP has gone from the first startup to one
of the world’s largest startups. Today HP
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INNOVATION JOURNAL ISSUE 1
ships more than 80 printers and 100 PCs
per minute and generates $50 plus billion in
revenue annually. innovation is quite different from incremental
innovation and requires a different approach
for success (See Table A).
No company reaches this scale and
success without being very good at
operations, incremental improvement and
driving predictable results. Successfully
scaled companies are very good at meeting
the current needs of existing customers.
Yet this very success has a dark side termed
the Innovator’s Dilemma. It states that
established businesses avoid pursuing
disruptive innovations because they require
new markets, or new customers, or both.
And more often than not existing customers
have no immediate need for disruptive
innovations. Fundamentally, disruptive The Innovator’s Dilemma is not new to large
companies. The average life expectancy of a
Fortune 500 company in 1955 was 75 years;
today it is less than 15 years. Tomorrow, who
knows?
So how do we drive disruptive innovation and
still keep established businesses healthy and
growing? The answer is reinvention. Create
the disruptive new businesses of tomorrow
while running, growing and extending the
existing businesses. To do this, we need
a framework for new ideas and pursuit of
disruptive versus incremental innovation
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