VITAL BUSINESS TIPS
Why Good Managers Fail at Innovation
Disruption can’t be scheduled — your business has to be ready to take advantage when the time comes. B Y M AT T B E R N AT H
As my business partner Brent and I prepared for our annual book club, I asked ChatGPT for a list of classic business books. We had agreed to choose two non-fiction business books each: one had to be a classic, and the other one needed to be written in the last ten years. When The Innovator’s Dilemma appeared, something told me to pick it, despite it being such a dry, academic read. Twenty-five years ago, Brent read this book in business school and felt he got a lot from it. Rereading it now, with decades of actual business experience, completely transformed his perspective. The same thing happened to me. What seemed academic became immediately practical. The question isn’t whether disruption will happen. It’s whether you’ll recognize an opportunity when it shows up unexpectedly.
The Market Nobody Saw Coming In the early 1960s, Honda tried competing with Harley-Davidson in America. They failed spectacularly. Two frustrated Honda executives took their little 50cc Super Cub delivery bikes and rode them around Los Angeles just for fun, basically ready to admit defeat and go home. But someone saw them riding and asked where to buy one. That’s it. That random encounter revealed the off-road motorcycle market in America. A market that didn’t exist. A market no amount of research would have uncovered. A market that grew to 5 million units annually within five years. I keep coming back to this pattern: The people who seek disruptive technologies seem to fail more than those who just experiment and listen. You’re not hunting for the next big disruption. You’re creating space to stumble onto opportunities, then recognizing what you’ve found.
The Separation That Actually Works Every conversation about service hits the same wall. “We tried it. Didn’t work. Too expensive to send project guys on service calls.” You’re using the wrong team with the wrong economics measured by the wrong standards. If you want to experiment with service, create a separate team. Don’t burden your project crew with service calls using project economics. Give service its own people, pricing models, and success metrics. I’ve watched integrators succeed and fail at this for years. The ones making service work hired different people, created different pricing, and established different measures of success. They gave service permission to be its own thing. The ones that failed tried bolting service onto existing operations. Same crew. Same cost structure. Same expectations. Different results were impossible. This applies beyond service. Any genuinely new initiative needs its own
space. Not just a budget line, not just a side project, but actual separation with its own rules.
What Data Can’t Tell You I’m a data person. My entire business revolves around metrics and benchmarking. But I’ve learned something uncomfortable about data’s limits: You can’t research your way to disruption. Customer feedback tells you how to improve what you already do, but it tells you nothing about markets that don’t exist yet. Honda’s off-road buyers weren’t shopping for Harleys. Your future service customers might not be your current project clients. This doesn’t mean you should abandon data. It means recognize what data can and can’t do. For sustaining innovation, making your current business better, data is gold. For disruptive innovation, discovering entirely new opportunities, data is useless until after you’ve already found something. The goal is having a culture of experimentation so that when you stumble upon something interesting, you recognize what you’ve found.
Making This Practical The conversation about disruption gets theoretical fast. Here’s what actually matters for integration business owners: First, separate teams for separate initiatives. Your project crew can’t simultaneously optimize for project work and build a service operation. Give service its own people, pricing, and metrics. Second, recognize that customer feedback guides sustaining innovation brilliantly but predicts disruptive innovation poorly. Listen when improving existing offerings. Don’t expect customers to tell you what completely different thing to try next. Third, build financial headroom before you need it. Experiments require resources. The businesses that adapt when markets shift are the ones with capacity to try things. Fourth, accept that expert forecasts about new markets are always wrong. Always. You can’t plan your way to disruption; you have to xperiment your way there. The best discoveries rarely come from research. They come from staying in the game, trying things, and paying attention when something interesting happens. The businesses that thrive won’t be the ones that predicted the future correctly. They’ll be the ones that built enough headroom to experiment, enough humility to learn, and enough discipline to recognize opportunity when they stumble onto it. For more insights on building integration businesses with the operational foundation and strategic flexibility to adapt to whatever comes next, check out The Flywheel Effect podcast. MARCH 2026
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