Organizing for Radical Product Innovation: The Overlooked Role of Willingness to Cannibalize

TLDR

Following Schumpeter (1942), many researchers have suggested that firm size is the key organizational predictor of radical product innovation. The study asks why some firms succeed at radical product innovation and proposes that willingness to cannibalize investments is a key differentiator. The authors identify three organizational factors that drive a firm's willingness to cannibalize. Survey results from three high‑tech industries show that willingness to cannibalize predicts radical product innovation better than firm size, prompting a reevaluation of conventional wisdom.

Abstract

Why are some firms more successful at introducing radical product innovations than others? Following Schumpeter (1942), many researchers have suggested that firm size is the key organizational predictor of radical product innovation. The authors provide an alternate view and argue that one key variable that differentiates firms with strong radical product innovation records from others is the firms’ willingness to cannibalize their own investments. The authors identify three organizational factors that drive a firm's willingness to cannibalize. Results from a survey of three high-tech industries tend to support the alternate view that willingness to cannibalize is a more powerful driver of radical product innovation than firm size is. These results suggest a need to reconsider conventional wisdom on firm size, cannibalization, and organizational synergy.