The culture of the large firm is optimized around managing continuous change. That’s how they maintain their business. But it’s the discontinuous change – the kind created by truly radical innovation – that gets these companies in trouble. In other words, rigidity is functional because it’s necessary to make things work. But eventually, rigidity works against you. It may be valuable for maintaining the status quo, but it keeps you from becoming innovative.
Discontinuous change is almost impossible to see coming because it’s not the rational outcome of a rational process. It comes out of a chaotic process that includes venture investing, the collapse of old orders, and the formation of new intellectual capital. In this process, outcomes are only clear after the fact. Something else also emerges from the process: wisdom.
Having received a fair amount of this wisdom from our deep experience in Silicon Valley, we can help large firms embrace this process. Through a combination of vision and wisdom, patience and maturity, luck and experience, we introduce the chaotic process of invention into the large firm in a way that allows them to then participate in it without being over taken by it. It’s difficult for large firms to embrace this process, but their success, indeed their survival, requires it.
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