Epilogue

Abstract

We began this book with a discussion of the problems inherent in managing ­innovation systems and some unique solutions for managing them. Leaders within most organizations, whether managing projects, services, manufacturing, or other operations seek to minimize the variability inherent in the system, which in turn improves the ability of the firm to predict outcomes and manage risk. Because the very nature of innovation requires fostering creativity to create a competitive edge, however, innovation leaders find themselves in the odd position of needing to deliberately increase the variability in the system because they need to try out different ideas, which results in less predictable outcomes and greater risk. Moreover, as discussed in the principle of escalation of expectations, innovations are the result of entrenched processes wherein competitive actions, employees’ skill sets, interactions among various products in a portfolio, market needs, and investment policies are linked into a complex, multilayered system. Even the smallest change, the smallest disruption, to this system creates a butterfly effect that can steer a firm down an irreversible path in terms of technology and market evolution, and ultimately success or failure. Additionally, other disruptions can evolve from external forces such as government legislation or environmental regulations, or unexpected spikes in the price of oil, and so on, or they can be created by a company manager’s decisions or those of its competitors. Hence, the unpredictability created by embracing the uncertainty inherent in a creative system is magnified by the dynamic complexity of the ­innovation system, making its management a spectacularly difficult challenge for innovation leaders at all levels of the firm.