technology structure strategy innovation
Download
Skip this Video
Download Presentation
Technology, Structure, Strategy & Innovation

Loading in 2 Seconds...

play fullscreen
1 / 85

Technology, Structure, Strategy & Innovation - PowerPoint PPT Presentation


  • 125 Views
  • Uploaded on

Technology, Structure, Strategy & Innovation. Salvatore Sciascia 16/05/2003. Section 1: Technology. Defining “TECHNOLOGY”.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Technology, Structure, Strategy & Innovation' - bailey


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
defining technology
Defining “TECHNOLOGY”
  • … we are referring either to a practical application of science to address a particular product or manufacturing need, or to an area of specialized expertise … the practical application of science. (A.D. Little)
  • … it´s a specific process that produces a specificproduct … a manufacturing process … as a way a company does business or attempts a task. (McKinsey)
what is technology
WHAT IS TECHNOLOGY?

COMPANY

(Robbins, 1990)

where is technology
WHERE IS TECHNOLOGY?

INFRASTRUCTURE

SUPPORT

HRM

MARGIN

TECNOLOGY DEVELOPMENT

PROCUREMENT

INBOUND LOGISTIC

OPERATIONS

OUTBOUND

LOGISTIC

MARKETING

& SALES

MARGIN

PRIMARY

SERVICES

organizational structure
Organizational Structure
  • The tasks that each of the unit composing the organization must carry out (roles)
  • The liasons established between such units (hierarchies and coordination mechanisms)
woodward 60s
WOODWARD (60s)

Hypothesis: There is a best organizational/technology fit that leads to optimal efficiency!

thompson s technology classification
THOMPSON’S TECHNOLOGY CLASSIFICATION

Sequential interdependence

Pooledinterdependence

Reciprocal interdependence

thompson s types of technology coordination mechanisms
T.P.

client

client

THOMPSON’S types of technology coordination mechanisms
  • A:Long-Linked Technology: moderate complexity and formalization (planning and scheduling)
  • B:Mediating Technology: low complexity and high level of formalization (rules and procedures)
  • C:Intensive Technology: high complexity and low level of formalization (mutual adjustment)
common elements
Common elements
  • Routineness as common denominator
    • Complexity (-)
    • Formalization (+)
    • Centralization (+/-)
  • Conflicting empirical results, since companies adopts several technologies at the same time. SMEs as fertile field of research!
3 theoretical perspectives on the relationship s t
3 theoretical perspectives on the relationship S-T

T is a vital part of the S planning process

T as input to S (Resource Based Strategy)

S influences the T choices

technological learning
Technological Learning

Average Unit Cost

Accumulated Production (~ time)

the technological choice
The technological choice

1. Selection

2. Acquisition

3. Exploitation

(Dussauge 1992)

1 selection the familiarity matrix
1. Selection: the Familiarity matrix

New & unfamiliar

New but familiar

Current

Markets

Technologies

Current New but fam. New and unfam.

1 success rate of innovations
1. Success Rate of Innovations

30%

10%

New & unfamiliar

New but familiar

Current

Markets

40%

90%

30%

Technologies

Current New but fam. New and unfam.

1 selection the risk matrix
1. Selection: the Risk matrix

High

Medium

Low

Business Exposure

Technical Uncertainty

Low Medium High

(A.D.Little, 1981)

1 selection the impact success matrix
1. Selection: the Impact/Success matrix

Potential competitive impact

Probability of Success

2 acquisition means 1
2. Acquisition: means (1)

Internal development

Strategic Autonomy

Acquisition

External R&D contracts

Joint Venture

Licences

Time

2 acquisition means 2
2. Acquisition: means (2)

Joint Venture

Internal Vent.

Educational Acquisition

Spin off

Sell

New & unfamiliar

New but familiar

Current

Markets

I.D

Acquisition

I.D

Licensing

Acquisition

Educational Acquisition

Internal

development

I.D

Licensing

Acquisition

Joint Venture

Internal Vent.

Technologies

Current New but fam. New and unfam.

(Roberts and Berry, 1985)

3 exploitation
3. Exploitation

Internal or External

  • External exploitation in case of:
    • protection (patent)
    • barriers to entry / exchange of technologies
    • imposition of it as a standard
formulating a technological strategy
Formulating a technological strategy

Business growth potential

Market position

Technological capabilities

the bcg matrix
The BCG matrix

Market Share (relative)

High Low

High

Low

?

STAR

QUESTION MARK

Maintain the position

Invest heavily or abandon

Business Growth

$

CASH COW

!

DOG

Abandon

Exploit (deploy, licence…)

if mkt position and technology diverge in high growth context
If mkt position and technology diverge, in high growth context…

G

G

M

T

M

T

Compensate to your weaknesses through “alliances”

if mkt posistion and technology diverge in low growth context
If mkt posistion and technology diverge, in low growth context…

Minimize investments in order to generate the largest possible CF

G

G

T

M

T

M

Abandon the business redeploying your capabilities

industries and investments in technology
PHISICAL CAPITALIndustries and Investments in Technology

CAPACITY driven

(textile, metals, basic chemicals, paper…)

CUTOMER driven

(households durables, food…)

KNOWLEDGE driven

(software, electrical equipment…)

CUSTOMER RELATIONSHIP

R&D

the concept of dominant design
The concept of dominant design
  • The design that wins the allegians of the marketplace, the one that competitors must adere to if they hope to command significant market following.
  • It arises as result of an interplay between technical, market and cultural choices.

Utterback (1994)

empirical evidence 1
Empirical evidence (1)

Number of Firms

Ex. Studies: Car and Type writing industries

Time

empirical evidence 2
Empirical evidence (2)

Number of Firms

Fall of Unit Price

Raise of Entry Cost

Time

empirical evidence 3
Empirical evidence (3)

Number of Firms

Focus on Process Innovation

Lower Innovation pace

Focus on Product Innovation

Higher Innovation pace

Time

empirical evidence 4
Empirical evidence (4)

Number of Firms

JAP

USA

Time

how does it occur
How does it occur?
  • Collateral assets (mkt channels, brand image, customer swithcing costs) (IBM)
  • Industry regulation (RCA)
  • Strategic maneuvering (JVC)
  • Communication
slide45

Long-term winners “have beaten their competitors through [focused] innovation and dynamism” Michael Porter

the role of innovation
The role of Innovation

Performance

Time

Resource Investments

a definition
A definition

Innovation is the creation and transformation of knowledge into new products, processes, or services that meet market needs

slide48
Il processo di innovazione

The innovation process

Invention

Creativity

Practises

Knowledge

Innovation

Diffusion

slide49
The innovation process

Il processo di innovazione

COMPANIES

Invention

Creativity

Practises

Knowledge

Innovation

UNIVERSITIES & RES. CENTERS

Diffusion

MARKET

the discipline of innovation
The Discipline of Innovation
  • “Innovation is work rather then genius”
  • “Innovation rarely springs from a flash of inspiration. It arises from a cold-eyed analysis of the sources of opportunities”
  • “Effective innovation is simple and starts small”.
          • (Drucker, 1985)
sources of opportunities 1
Sources of Opportunities (1)
  • Process needs (modern advertising - NYT)
  • Industry changes (deregulation)
  • Market changes, in morphology or perception (health, robotics)
  • New knowledge (PC)
sources of opportunities 2
Sources of Opportunities (2)
  • Unexpected occurences (IBM accounting machine, IKEA)

Emergent Strategy

Intended Strategy

Realized Strategy

Unrealized Strategy

incremental innovation
Incremental Innovation

Refining exixting products or processes (Microsoft)

radical innovation
Radical Innovation

Introducing totally new product concepts

critical activities radical vs incremental innovations 1
Radical

Commercialization +

Strategic Planning +

Tech. Dev. +

Screening

Testing

Business & Market opport. Analysis -

Incremental

Business & Market opport. analysis +

Commercialization +

Tech. Dev. +

Screening

Testing

Strategic Planning -

Critical Activities: radical Vs Incremental Innovations (1)

Best Practices

Song et al. (1998)

critical activities radical vs incremental innovations 2
Radical

Tech. Dev.

Business & Market opport. Analysis

Commercialization

Screening

Strategic Planning

Testing

Incremental

Tech. Dev.

Strategic Planning

Commercialization

Screening

Business & Market opport. analysis

Testing

Critical Activities: radical Vs Incremental Innovations (2)

Current Practices

slide59
R&D and Innovation
  • R&D does not automatically translate into innovation (300 ideas  1 new product)
  • Innovation does not always begin in R&D: It May begin in marketing, manufacturing, or engineering through recognition of an opportunity or customer need.
  • R&D usually becomes involved, but other requirements are money, good people, effective management practices, and luck.
slide61
TOP 10 INDUSTRIAL R&D INVESTORS (1999)
  • Ford $ 7.1 billion (+ 13%)
  • General Motors 6.8 billion (+ 8%)
  • Lucent Technologies 4.8 billion (- 6%)
  • IBM 4.6 billion (+ 2%)
  • DuPont 3.9 billion (+ 41%)
  • Motorola 3.5 billion (+ 21%)
  • Intel 3.5 billion (+ 31%)
  • Microsoft 3.0 billion (+ 19%)
  • Pfizer 2.8 billion (+ 22%)
  • Johnson & Johnson 2.6 billion (+ 7%)
  • $42.6 billion
r d or r vs d research
“R&D” or “R Vs D”RESEARCH
  • Guided by search for knowledge
  • Driven by curiosity
  • Pulled by scientists
  • Long term oriented
  • Questions rather than answers
  • Scientifically oriented
  • Process focused
r d or r vs d development
“R&D” or “R Vs D”DEVELOPMENT
  • Based on existing knowledge
  • Driven by profit
  • Pushed by market
  • Short term oriented
  • Answers/Solutions rather than questions
  • Investment oriented
  • Goal focused
r d and mktg their role in innovation processes
Technology push innovations:

20%

80% success rate

Market pull innovations:

80%

20% success rate

R&D and MKTG: their role in innovation processes

68 % of innovation pjts fail!

r d and mktg barriers to comunication
R&D and MKTG: barriers to comunication

Mktg R&D

Griffin et al. (1996)

r d and mktg means for integration
R&D and MKTG: means for integration
  • Relocation and phisical facilities
  • Personnel Movement
  • Informal social networks
  • Integrated reward systems
  • Organizational Structure… (see next slide)
r d and mktg organizing for integration
R&D and MKTG: organizing for integration
  • Permanent coordinating groups
  • Matrix organization
  • Project teams
success and failure of innovation processes
Success and failure of innovation processes

Management factors

  • Cost Management
  • Information management
  • Decision making
  • Time management

Resistance factors

  • Lack of Leadership
  • Political Struggles
  • Resistance to Innovation per se

Cozijnsen (2000)

innovation and governance
Innovation and Governance
  • Proportion of long-term pay mix for TM
  • Separation of CEO and Chairman
  • Number and age (-) of TM
  • Number of Directors
  • Complemetary skills and backgrounds in TMT and BoD

Markman et al. (2001)

the not innovative attitudes 1
The not innovative attitudes (1)
  • Many strands must be interwoven to create a compelling new product concept; but companies often RESPOND rather than INITIATE!
the not innovative attitudes 2
The not innovative attitudes (2)

Chase the latest

sales request

Follow the leader

Market demand

Competitive environment

Incremental developments

Relying on suppliers

Replacing old products

Technology

Stick to what

we know

Company capabilities

slide73
“There is nothing as difficult as changing the order of things […] because the reformer has enemies among all those who benefit from the exixting order, and only lukewarm support among those who might benefit from a new order”Machiavelli, The Prince
a why should we change 1
A) Why should we change? (1)

Profits

Goal level

Time

a why should we change b
A) Why should we change? (B)

Profits

New Goal level

Goal level

Time

a why should we change c
A) Why should we change? (C)
  • Forecasting Profits (customer satisfaction, industry dynamics, etc)
  • Creating positive crises
    • fixing and communicating new goals
    • making them achievable
    • using rational, emotional and monetary levers
b change into what 1
B) Change into what? (1)

Challenge the current strategy

WHO

WHAT

HOW

b change into what 2
B) Change into what? (2)

Institutionalize a Questioning Attitude

  • Changing the CEO (“new blood to the head”)
  • Unauthorized projects (3M: 15% of time)
  • Specific Departments (“DODGI” at the Body Shop)
  • CEO Time devoted to employees (Lan & Spar Bank: 50%)
c will it be a winner
C) Will it be a winner?
  • Innovation is also gambling… Luck really exists!!
  • Innovation stems from a variety of attempts, selected by the market: mistakes are the core of innovation (3M).
d how to organize
D) How to organize?
  • Convince everyone of the need and usefulness of the new idea
  • Make the old and the new co-exist harmoniously
  • Manage the transition gradually
when is virtual virtuous
Chesbrough and Teece (1996)When is virtual virtuous?

GM

Types of Innovation

Autonomous Systemic

Exist outside

Capabilities

Must be created

Ally with caution

Go Virtual

IBM

SUN

Ally or bring in house

Bring in House

the right degree of decentralization
The right degree of decentralization

Incentive to take risks

Ability to settle conflicts and coordinate activities

Virtual company

Alliance

Joint Venture

Corp. with autonomous divisions

Integrated Corporation

how to foster innovation 1
How to foster innovation (1)
  • Integrate Technology into Strategy
  • Invest in R&D
  • Integrate R&D and Mktg
  • Evaluate the nature of innovation
  • Analize the sources of opportunity
  • Adopt adequate Governance mechanisms
how to foster innovation 2
How to foster innovation (2)
  • Anticipate the crises
  • Question your strategy
  • Don’t be afraid to make mistakes
  • Balance the old and the new
  • Don’t follow the trends blindly
ad