Corporate innovation is becoming more and more strained lately. While it is easy to innovate, in theory, the practice of innovation is often quite challenging, especially within large organizations. A simple example is Scion, the recently shuttered youth oriented sub-brand created by Toyota about 13 years ago. The most typical description of Scion was that it was a “quirky”, low-tech, customizable, low-cost car. The net result was a car with poor mileage, crude interiors, and limited interest among the buying public. From a corporate perspective, the Scion cars had to be positioned so they didn’t threaten the market growth of any other car in the Toyota family.
Much like the Saturn brand from the 90’s, Scion was allowed to only operate in a narrow range, with limited funds and no ability to separately raise capital in the capital markets. Like Scion, Saturn failed in less than 20 years for similar reasons. In both cases the parent company was huge and limited the options and strategy for the small startup innovative brand, making for a restrictive operating envelope. From a big company perspective, innovation is fine, as long as you don’t innovate too much and threaten “real business”.
Source: Yahoo News