Kirk Klasson


The telegraph ranks among the most significant achievements of modern times. By liberating the delivery of communications from the limits of phusical transportation and from humans’ sensory boundaries, the new medium ushered the world into the information age.

Invented almost two centuries ago, the telegraph sparked innovation on an unprecedented scale. It immediately precipitated flurries of incremental improvements in telegraph technologies – great strides were made in transmission quality, and very quickly, the technology standardized around Morse Code. It ever began to change the way that businesses were organized. Many firms dramatically reinvented themselves to exploit its advantages. Other sectors were annihilated. Soon, who needed the Pony Express?

The land grabs and surges of speculation that characterized the telegraph’s early days show that the goal of the innovation in a business context – to gain a monopolistic hold on a new market – is as old as capitalism itself. Success then, as now, required a three-point strategy. Contenders had to get in early, rapidly grow their user networks before competitors arrived, and focus on core competencies to stake out defensible positions.

As with every Next Big New Thing, the telegraph generated a range of innovations that conforms to a hierarchy of value creation. On top are layers of disruptive innovations such as new business models that reconfigure industries, or new technologies that redefine product categories. Lower down are the incremental innovations that seek to improve existing products, services, and processes.

What’s different today? In two words: the Internet. Its unique facility for slashing coordination costs – the costs of liaison between, say, a customer and a supplier – fosters unprecedented levels of business-model innovation. Plummeting transaction costs, greater market liquidity, and more partner transparency are just some of the Internet-fueled realities that allow innovative business models to continually emerge.

Please do not presume you’re OK because your firm has an entrenched “innovation process” or funds an “innovation engine”. Geared to deliver incremental innovations only, they will not support the disruptive innovations needed to reinvent your business model. And both types of innovation absolutely belong in your portfolio of options in the New Economy.

This white paper puts the innovation discussion on a new plane. It sketches out the innovation-value hierarchy. It explains the link between innovation and value creation, and concludes with a self-diagnostic tool that will help you determine where you truly stand in the innovation game.

To view the Full Innovation White Paper, Click Below:

One Comment to "Innovation"

  1. Steph says:

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