Page 77 - The Resilient Organization

64 Part Two: Step 1. Managing the Consequences of Past Performance

As with any organizational success or failure, there are likely several key
reasons for the performance of the Sun Ray, the computing innovation in
question. The case description hints to some exogenous (for example, at the
time Microsoft’s and Intel’s dominance of the PC industry was growing fast)
and endogenous (for example, strategic positioning, project overstaffing)
factors. In this case, however, the spotlight is on innovation trauma as one
critical driver of failure. And in this situation, as is usually true in most
organizations, there were early warning signals of the trauma as well as
possible treatments, so that learning from inevitable failures could empower
innovators to embark on the next project with confidence.
The case of the Sun Ray is an example of a situation in which a prior
innovation failure—that of JavaStation—caused innovation trauma. I,
together with my colleagues Professor Michael Gibbert, Bocconi University,
and Martin Hoegl, WHU Otto Beisheim School of Management, in the
related study, propose this trauma had traveled to Sun Ray, a conceptually
similar but technologically superior product. The emotional costs experi-
enced by the Sun Ray engineering team and the marketing department ulti-
mately deprived the Sun Ray of a fair trial as a radical innovation. This
posttraumatic disorder even affected some members of upper management,
who had been burned by the JavaStation experience.
Our study of the Sun Ray leads us then to suggest that managers should
pay more attention to moderating the contagious trauma that innovators
may experience. Given the oscillating nature of innovation in the form of
internal venturing activities (Burgelman & Välikangas, 2005), coping with
failure becomes particularly important. But paradoxically, learning from
failure is difficult under conditions of innovation trauma, as the Sun Ray
case illustrates.
Management practices may mediate the emotional cost of failure and
begin to build the conditions for learning from failure. Management prac-
tices for healing, in case the trauma has already occurred, should be devel-
oped in order to offer relief and/or help people to move on without shying
away from innovation activity in the future. Innovators should be allowed
to learn from their past experiences to hone their skills as advanced inno-
vators, rather than becoming “innovation gun-shy.” This study thus
addresses a challenge familiar to most managers of innovative processes in
organizations: having to reject many more ideas and initiatives than one is