Strat Man 5th Ed Ch7 Slctd Slides
- 1. Why do organisations benefit from an innovative purpose? Video Summary Chapter 7 © Copyright Richard Lynch 2009. All rights reserved
- 2. Environment Resources Purpose Options Options Choice Implement Options Prescriptive processes do not capture innovation well ..because the prescriptive process is too structured and formal
- 3. Environment Resources Purpose Strategy development and implementation Emergent processes capture innovation better … a more emergent process is required Free-wheeling, creative and blame-free process is required to encourage and support innovation
- 4. An emergent approach to purpose Knowledge creation Technology development Innovation Experimental and emergent purpose Resulting in.... Leading to.... Increased revenues Enhanced value added Stronger competitive advantage See : Lynch Ch 7
- 5. How does knowledge influence purpose? - 1 “ Knowledge is a fluid mix of framed experience, values, contextual information and expert insight that provides a framework ofr evaluating and incorporating new experiences and information.” Davenport and Prusack The knowledge of an organisation is more than data or information The most useful knowledge is often the most difficult to understand, codify and replicate: it is this knowledge that delivers sustainable competitive advantage See ; Lynch, Ch 7, section 7.1
- 6. How does knowledge influence purpose? - 2 Important to distinguish between tacit and explicit knowledge: Tacit knowledge : difficult to specify, fuzzy, perhaps complex and often unrecorded Explicit knowledge : carefully analysed, often defined precisely, often written down Both types can provide sustainable competitive advantage: Tacit because it is more difficult for competitors to copy what remains only partially known Explicit because it may be exclusive to the organisation, such as a patent. See : Lynch Ch 7, section 7.2
- 7. How does knowledge influence purpose? - 3 Knowledge creation : the development and circulation of new knowledge May generate new strategic opportunities for the organisation The process is unclear but has at least three elements: Organisational learning mechanisms : learning from the experience of trying new ideas Knowledge creation and acquisition process : investing in information and buying in knowledge from other companies Knowledge transfer process : sharing and exchanging knowledge within an organisation
- 8. Innovation through technology-1 Two main phases for developing technology strategy: Survey of existing technologies: An organisation-wide survey of existing technologies Examination of related areas, such as patents and intellectual property possessed by the organisation Technology scan outside the organisation to identify what is available Consideration of technologies in relation to the maturity of products possessed by the company Development of technology strategy against two criteria: Technology developments versus competition Costs of further development versus the time to undertake such development See : Lynch Ch 7, section 7.3
- 9. Innovation through technology-2 Because organisations and markets differ so much, it is not possible to develop a single framework that embraces all technology and innovation However, two underpinning principles provide some guidance: Core competencies : those technologies and production skills that empower organisations to adapt quickly to changing opportunities Five major technological trajectories : most organisations can be fitted into one of five types of technology that will show what scope is possible for future technological strategy – listed separately
- 10. Innovation through technology - 3 Five major technological trajectories : Supplier-dominated firms where technological change comes primarily from the suppliers to such firms, e.g. agricultural industry where it is not the farmers who develop the technology but the manufacturers Scale-intensive firms where the large size cost of new plant means that technology changes comes from small increments, e.g. car plants install new plant in stages Science-based firms , like electronics and pharmaceutical companies, where central R&D may provide technology driving force Information-intensive firms , like banks and phone companies, where new technology comes both from inside and from bought-in items Specialised-supplier firms , such as suppliers of high-performance machinery or sophisticated controls, where technology comes from understanding special customer needs and identifying new applications
- 11. The innovation process - 1 Innovation: ‘The generation and exploitation of new ideas’ Note that this definition makes no mention of technology, because it is not the only source of innovation Innovation delivers three priceless assets: Substantial future growth Competitive advantage Ability to leapfrog the competition Assisted by appropriate organisation structures Keypoint: innovation can occur anywhere in the organisation, not just in technology/R&D
- 12. Technology push Market pull Innovation The development of new initiatives in technology The analysis of customer needs to spark new ideas Keypoint : impact on purpose difficult to define in advance Two main routes to innovation: The innovation process - 3
- 13. Some guidelines in the difficult search for innovation: Question the present business strategies and market definitions Consider carefully the purpose served by the current products and processes everywhere in the organisation Explore the external timing and market opportunities Seek out competitors’ weaknesses Deliver new and better value for money Search wide and far, e.g. other industries, countries and technologies Seek to challenge conventional wisdom The innovation process - 4