As companies begin to emerge from the Great Recession, organizations that spent the economic downturn innovating seem to be the most optimistic. After all, they're the ones with new products and services to offer and new markets to pursue.
Take Apple. While other companies were busy trimming fat from their organizations, Apple was busy upgrading its App Store and putting the finishing touches on its revolutionary iPad tablet. When the two came together in March, magic happened: Apple sold more than a million iPads during the first 28 days after the product became available. It took 74 days for the iPhone to reach that same milestone, a stellar accomplishment in its own right.
Why was the iPad such a runaway sensation in its first month? Because it is a disruptive innovation--one that creates a new market--that also leverages Apple's sustaining innovations.
Since the iPhone's 2007 introduction, Apple has made consistent improvements in the number and quality of apps available for it, opening development of them to the masses. There were only 500 apps in July 2008; today there are more than 185,000. These apps have been downloaded more than four billion times, helping to multiply the success of the iPad and paving the way for future growth of even more apps.
It is clear that Apple's simultaneous pursuit of both sustaining and disruptive innovation is a winning strategy. It's also a clear example of the power of doing both--consciously avoiding a tradeoff when faced with two divergent options.
Cisco applies the principle of doing both in nearly every area of its business, from a dual focus on both customers and partners to an embrace of both traditional and collaborative management models and to the pursuit of both sustaining and disruptive innovation. This gives the company ongoing momentum in its current markets and propulsion for entering new adjacent ones.
But doing both isn't easy. Start-ups often prefer the dogged pursuit of the next big idea. And large companies are often reluctant to invest in disruptive innovation, feeling constricted by their commitments to existing customers, pressure from investors for short-term results or even fear of upsetting existing revenue streams.
But when companies do both, the payoff can be great. Two complementary options, in this case sustaining and disruptive innovation, can amplify one another many times over. When Cisco makes an advance in one form of innovation, it usually gains a benefit in the other. And that is the true power of doing both.
When Cisco entered the video collaboration market in 2006, it wanted to offer a lifelike consumer experience. But to ensure that TelePresence gained market acceptance, the company had to make it very easy to use. So it turned to Call Manager, a sustaining innovation that we had already developed to run phone calls over the Internet. With the combination of Call Manager and TelePresence, a sales director in New York can host a live meeting with a customer in Shanghai with just the touch of a button.
Thanks to Call Manager, a sustaining innovation, Cisco is changing the way people communicate. And thanks to TelePresence, a disruptive innovation, the company is selling more high-speed routers than ever before, further fueling its efforts in sustaining innovation. We have already installed more than 700 TelePresence rooms at Cisco, saving the company $400 million in travel costs in 2009 alone and enabling interactions that wouldn't otherwise have been possible.
That is the multiplier effect of doing both. It is also a big reason why Cisco leaders are bullish about the future as the economy improves.
Can doing both do the same for your organization? Absolutely. And not just when it comes to developing new products and services. It can help in virtually every aspect of your business, from personal development to corporate governance and beyond. Simply put, doing both is a better way.
Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco, and the author of Doing Both: How Cisco Captures Today's Profits and Drives Tomorrow's Growth. Follow Inder on Twitter at @indersidhu.
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