Innovation’s Second Step

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Innovative companies often place their emphasis on invention, research, and new product development, even as they neglect the process of bringing products to the marketplace in a way that is advantageous over the long term. Small to medium-sized businesses that are scaling up are particularly vulnerable to entering into unfavorable distribution arrangements with large mass-market retailers. Often, managers assume their fi rm will automatically benefit from a technological or creative breakthrough. Rather than focusing solely on new innovations and viewing distribution as an afterthought, we suggest that innovative fi rms make channel management a priority as their products are discovered and they attempt to reach more customers. In this article, strategies are offered as paths managers should consider as they use their innovations to scale up from small or medium-sized fi rms into large companies. Steps for implementation as well as concurrent risks are also presented.