HBR IdeaCast

The Innovation Strategy Most Companies Miss

31 min

Amos Winter (MIT) and Vijay Govindarajan (Dartmouth) argue that companies should first target emerging markets with innovations that achieve high performance at low cost—a strategy called reverse innovation 2.0. This approach forces teams to solve tough constraints, yielding products that can scale globally and disrupt wealthy markets. They provide a structured process for identifying problems, designing solutions, and overcoming the 'dominant logic' that holds multinationals back.

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✨ Key Takeaways

1

Reverse innovation 2.0: Design for emerging markets first to create high-performance, low-cost solutions that can disrupt rich markets.
2

Three merits to evaluate before any innovation project: problem merit, innovation merit, and value merit.
3

VG’s team lived in rural India for 2 months to understand requirements for a $400 EKG machine—portable, battery-powered, and easy to repair.
4

The biggest corporate challenge is 'dominant logic'—mindsets and systems that resist low-cost innovation.
5

True innovation thrives under resource constraints; adding a few 'mavericks' to the team helps break conventional thinking.

💬 Notable Quotes

"The biggest barrier to reverse innovation is not technology; it is the dominant logic. Companies are so entrenched—it's like moving the Titanic 180 degrees. — VJ Govindarajan"
"When you give people less money, they actually do out-of-the-box thinking. — Amos Winter"
"If you want to make a positive impact and a viable business at the same time, start with the toughest problems where people have the least resources. — Amos Winter"