On the day two weeks ago when I put this piece together, several pieces of news reminded me of the importance of this question. It was reported that Saturn dealerships were closing in anticipation of the announcement by General Motors that Saturn was one of three brands that it would drop. Saturn, arguably the most innovative undertaking by the company in several decades, is on the auction block. Consumers apparently loved the car more than GM executives, who couldn't figure out how to make much money with it. The same day, Google announced its earnings: In discussing the announcement, analysts reminded investors that 97 percent of the company's revenues still come from one source, search and advertising, despite the organization's emphasis on providing time and an organization for innovation among its associates. I remembered the airline Song, which had introduced service innovations until it was folded back into parent company Delta and oblivion, just one of several unsuccessful attempts by large airlines to compete with smaller, more focused, low-priced competitors. Then I picked up Stall Points, a book by Matthew S. Olson and Derek van Bever.

The books Built to Last and Good to Great have informed us about success. Stall Points is of the same genre in the sense that it is based on extensive quantitative research of a large database followed by more detailed examinations of a subset of organizations. But instead of success it deals with failure and its causes. The sample of organizations here is composed of 400 corporations that at one time or another have comprised the Fortune 100 since 1955 as well as some 90 non-U.S. based corporations. From the larger base, the authors selected 50 organizations whose experiences met the criteria for a stall and whose profiles were representative of the entire group in terms of industry mix and age. They were studied in-depth and provided the basis for conclusions of the study.

For the group as a whole, the authors found that growth rates: (1) increased up to the "stall year," (2) dropped precipitously in the following year, and (3) faced increasingly difficult odds of regaining momentum with the passage of time after the stall. Of the companies in the study, 87 percent had experienced a stall. Fewer than half of those were able to return to prior rates of growth within a decade after the stall. Of the reasons for the stall, 87 percent were within managers' control. The four most important causes of stalls were found to be "the presumption of an unassailable competitive position" by management; "innovation management breakdown," including such factors as slow product development, too much decentralization of research and development, or curtailed R&D spending; premature diversification from "core" activities; and a "talent bench shortfall." In the stalled companies, innovation suffered from a concentration on smaller and smaller niche opportunities, brand extensions, or generally ideas with small business impact.

All of the companies in the sample had reached substantial size at the time they stalled, suggesting that organization size must play a role in this mix of phenomena that includes "innovation management breakdown." But why do these phenomena occur, especially given what we generally assume to be the availability of superior resources to support innovative activities in larger organizations? Whatever happened to the focus on intrapreneurship (within large organizations) that fascinated us in the 1980s? How do a few well-known large organizations, such as Apple, Virgin, and Tata continue to innovate and support entrepreneurship? Or are they just delaying the inevitable? Do organization size, innovation, and entrepreneurship have to be incompatible? What do you think?