What does the word "innovation" - a favorite buzzword among business executives today - really mean? To Kawasaki, it's the ability to "anticipate what people will need before they have figured out that they need it."

Fear can be a great motivator of innovation, Kawasaki suggests. Organizations tend to be more forward-thinking if they’re “paranoid” about being eclipsed by a couple of young people working away in a garage or dorm room.

The spirit of innovation, however, can be difficult to sustain, especially in mature companies. Many seem to have natural lifespans, while others remain dominant for decades or longer. One possibility is to maintain a unit within the company that acts as a kind of “skunk works,” with the aim of exploring cutting-edge technology that might even undermine the organization’s most successful products.

When exploring new ideas, companies shouldn’t be afraid of failure. “Most efforts fail,” says Kawasaki. “The ones we can cite as examples are the ones we know about because they succeeded. You never hear of the failures.”

There remains, of course, the question of how much uncertainty and risk a company can bear. That’s especially true if it’s publicly traded, and subject to the whims of Wall Street, Kawasaki says.

In any case, “a near-death experience is a very motivating factor,” he says, citing Apple’s resurgence after a slump in the 1990s that nearly took down the company.

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