In a restructuring move, Vodafone is shutting down its stand-alone New Business and Innovation Unit (NBIU) and folding some of these operations back into other operating units of the company:

“Vodafone has announced that it is axing its new business and innovation division and as a result of the restructuring, the unit’s CEO, Thomas Geitner, will quit the company. Vodafone has said that its new business and innovation unit (NBIU) will be absorbed back into the structure of the company and as a result of this, Geitner, who joined the company in 2000, will be leaving in December 2006. Vodafone had created the NBIU earlier this year in a restructuring process that also included dividing the business into two geographic regions. Under the terms of the latest initiative, the NBIU’s responsibilities in developing the mobile plus strategy will be devolved to the operating companies and to the European region. A group strategy and new business function will identify new business opportunities and key partners.”

[image: Building 4 Vodafone]

Michael Urlocker of the On Disruption blog has put together a comprehensive innovation case study of what went wrong at Sony, including numerous links to outside sources and articles that document the role of innovation at the company. According to Urlocker, the company fell victim to The Innovator’s Dilemma. Unable to come up with disruptive innovations of its own, the company was instead blindsided by a number of recent market developments in areas such as digital music.

For nearly 30 years, Sony was one of the leading innovators in consumer electronics:

“Sony was the great innovative company that invented technologies that defined innovation and pop culture from the 1950s through to the early 1980s with a string of new-market disruptive innovations… One way to look at this is to consider Sony as a serial disruptor that had little to lose in the early days. When Sony had no share of the U.S. radio business in the 1950s and no share of the TV business in the 1960s, Sony took chances, it innovated and it pursued what looked like small or marginal market opportunities to gain toeholds in the market.”

That all changed, however, once the company began to dominate large markets. Of late, the company has been downgraded, delayed and disrupted:

“As Sony grew in the consumer electronics business and in the music business, Sony had a lot to lose. Hence in the past 20 years, Sony became a company more concerned with protecting and defending its dominant position and seeking proven large market opportunities. Largely, Sony did the right things that successful companies must do: It served its customers, it released better products and it did not compete against its cutsomers.

But as a result, there was less disruptive innovation and no appetite for potentially cannibalizing businesses, like the $1-a-song download business. After all, it is certainly not easy for a company that sells music to record stores to compete against those same customers with a direct-download business. But ignoring a threat does not make it go away. Sony left that disruptive innovation to a music-industry outsider: Apple and its iTunes service…”

[image: Sony trade show]