When people at companies embrace innovation or change, that company is clearly more likely to find long-term success, says Michael Tushman, Ph.D. and Paul R. Lawrence professor of management at Harvard Business School.

Professor Tushman, who boasts a client list that includes Bristol-Meyers Squibb, GE, Hewlett-Packard and Merck, has worked for more than a decade to discover why short-term success at firms can lead to long-term failure.

He brings his findings to Cincinnati Oct. 25 during a half-day seminar presented by the Center for Adaptive Management at 8 a.m. at the Montgomery Inn Banquet Center. Call 563-4434 for more information or register online at www.cfam.org.

Co-author of Winning Through Innovation, Dr. Tushman spoke with Enquirer business reporter John Eckberg.

Question: Corporate innovation is sometimes a euphemism for cannibalization, companies eating their young. Some companies and executives must be nervous about innovation, look at it with a sense of impending danger.

Answer: Companies should look at it from the danger of not innovating. I look at innovation with colleagues and students through a notion of stream of innovation. First there's bigger and better, that is, an incremental change. There are also architectural changes and radical changes. Radical change is something quite discontinuous and substitutional: radial tires substituting for bias ply tires. Or take the quartz watch. The watch industry went through radical change to a completely different customer set.

We believe that dynamic capabilities at the firm level are anchored and playing in that innovation space. We argue that firms need to think about different types of innovation, some of which lead to substitution, but most are not. Most are complementary. Take the quartz watch example. The Swatch Group now is selling an awful lot of mechanical watches, the old-fashioned, very expensive mechanical watches. They haven't given that up.

Yes innovation can be cannibalization, like the radial tire, which really did cannibalize the existing bias-ply tire franchise, but most innovations in this innovation stream are not.

Q: The challenge, then, is to enable innovation.

A: The way we describe it is to create organizations that celebrate exploitative behavior. I don't mean exploiting employees but it's exploiting your existing competencies as well as celebrating and honoring exploratory behavior. There must be lots of experiments, even though many will fail. Some will be the future of the franchise. That ability to both explore and exploit simultaneously is a fundamental insight into building an ambidextrous structure, what we call an ambidextrous form.

Q: Let's talk about Vinnie Bagadonuts, v.p. of operations. He has a widget fastener factory floor with 90 people and sees a distant future where consumers may no longer need widget fasteners. Where does he start?

A: Vinnie Bagadonuts, if he's on the factory floor, depends upon his R&D crowd to come up with a new fastener. He has to have his production factory floor continue to do the existing fastener and then learn this new fastening approach. There are diagnostic abilities that are important. He must look at the competencies of his 40 people, their raw skills and abilities.

He needs to look at the culture on his factory floor and see if it is open to new streams of innovation, open to collaboration with colleagues in marketing and R&D and finally, does he manage the processes on his factory floor in a way that will increase the probability that he can exploit existing skills in fastenings and explore new fastening production techniques.

We push Vinnie to look at not only his strategy for his factory floor around these innovation streams but also push the Vinnies and their teams to think about their own styles as leaders, their own decision making practices so they are able to foster this incremental innovation and the more discontinuous innovation.

Q: I have a feeling that the boss's furrowed brow discourages more innovation than anything else.

A: Oh yeah, absolutely. Vinnie, if he sees down the road a couple of years some new fastening thing and his boss doesn't get it, the first thing Vinnie has to do is manage the boss. Say, hey Mr. Browfurrowedboss, you're locked in the past and we have got to get along with this. As soon as the bosses come and are only focused on costs, there will be no innovation.

Q: What business structures tend to foster innovation?

A: You're on to a key point. The Vinnies of the world cannot foster innovation streams. It has to be Vinnie's boss or Vinnie's boss's boss. The senior team of the fastening organization has to do this. They can't rely on Vinnie to do this because Vinnie is outgunned politically. It has to be the senior team. But the question was structure.

Whether it's Vinnie on the factory floor or Vinnie's general manager in this fastener business, there needs to be an ambidextrous structure, a structure that celebrates inconsistency and builds into the organization systems, procedures and controls that focus on costs and efficiency even as structures are created that celebrate chaos, mistakes, wacky kinds of innovations and the creation of options.

Those forms are inconsistent so it places a lot of pressure on senior teams who must act consistently inconsistent. Companies must create multiple organizational architectures that both honor exploitation and honor exploration simultaneously. Do you see what I'm saying?

Q: Well, you kind of went Zen on me there, I think. When a guy goes Zen on me, I have to ask, can you do all that?

A: Well, poor Vinnie down on the factory floor is in trouble if management has that furrowed brow. The nub of innovation streams and dynamic capabilities is having senior teams that have a cognitively complex model of their industry and are able to think about substitution, as well as incremental change and then build the requisite organization forms.

At some point they'll need to manage change but the more provocative stuff is to build teams that can be ambidextrous.

E-mail jeckberg@enquirer.com