Article - Organizing for innovation in the digitized world (Yoo et al, 2012)

Question 1

What is the synopsis that leads to this article?

Answer 1

• Physical products become embedded with digital technology
• Changes the nature of products on a personal level (running shoes with a chip) and on industry level (using 3d scanners to do construction);

Question 2

Which two levels of materiality are discussed?

Answer 2

1. Physical materiality
   Artifacts that can be seen and touched, hard to change, connote a sense of place and time;
2. Digital Materiality
   What software incorporated into an artifact can do by manipulating digital representations.

–> Putting the digital into physical products –> enables possibilites for new experiences, products, organizational forms;

Question 3

What are two unique properties of digital technology and to which two properties do they contribute?

Answer 3

1. Reprogrammable functionality (Von Neumann)
2. Data homogenization (same type of data -> 0’s and 1’s)

Lead to:

• Convergence
• Generativity

Question 4

What is convergence?

Answer 4

Bringing together things. Such as user experiences or industries

Question 5

What is generativity?

Answer 5

Technology supports the creation of novel products and that can prompt change in an organization;

Question 6

What is a technology affordance?

Answer 6

An action potential. What an individual or organization with a particular purpose can de with a technology or an information system;

-> The affordances that you get from pervasive digital technologies create innovations characterized by (1) Convergence and (2) generativity

Question 7

What are pervasive digital technologies?

Answer 7

Wide-spread adoption of technologies that are embedded into physical products.

Question 8

What are three ways in which the affordances of pervasive digital technologies enable innovations of convergence?

Answer 8

1. Bringing together previously separate user experiences
   (Music and streaming –> Spotify)
2. Due to digital technologies being embedded in non-digital artifacts, a single artifact can create multiple affordances that used to require multiple products (smartphone –> used as phone, photo’s games etc.)
3. Bringing together separate industries
   Skype used to be software firm, now competes with telecommunication companies for long distance calls;

Question 9

What are three ways in which the affordances of pervasive digital technologies enable innovations of generativity?

Answer 9

1. Pervasive digital technology ensures that form and functionality is not fixed. New capabilities can be added after introduction due to reprogrammability (think smartphones and apps)
2. Pervasive digital technology enables waves of innovation (new tools can influence the role of employees/managers, which drives change into project management)
3. Pervasive digital technology leaves a big volume of digital traces as by-products
   Called derivative innovation –> using data gathered to create new innovations based on the initial innovation
   (Data about jogging from the chip in your shoe can be used to create new work out plans)

Question 10

Yoo et al provide with three tentative (proposed) traits of innovations that are associated with pervasive digital technology. Which three?

Answer 10

1. The importance of digital technology platforms
2. The emergence of distributed innovations
3. The prevalence of combinatorial innovations

Question 11

What is the role of digital technology platforms in innovation?

Answer 11

• Firms innovate by creating a platform instead of single products;
• Platforms create an ecosystem, which might attract heterogeneous actors that innovate through it. This can be done by creating different layers in your platform which can be innovated;
• Focus on building a platform not only of products, but of digital capabilities that can be used through the organization. (Think about an ERP system to which new tools can be added)
• With platforms, firms can now focus on designing multiple products with the tools they already have in house. Eliminates the need for outsourcing or extra tools.

Question 12

What are three implications of the emergence of platforms on a organizational operations?

Answer 12

1. Organizations must balance the level of generativity and control on the platform. Too much control limits generativity, but too little control makes the platform too fragmented;
2. Distributed nature of innovation products and processes. –> Data and processes are shared across organizational boundaries;
3. Innovation activities increasingly become horizontal as efficiencies are gained by applying the same innovation activities and knowledge across multiple products or platforms.
   An app for multiple software platforms, but also that can be used for different hardware platforms (TV, computer, phone);

Question 13

What effect do boundaries have on innovation through platforms?

Answer 13

Any boundary limits innovation. These need to be reduced, but organizations need to develop processes on which boundaries can be removed, and which can not.

Question 14

What is the role of distributed innovation in innovation through pervasive digital technology?

Answer 14

There is reduction in communication and coordination cost; geographical dispersion of innovation activities and democratization of innovation processes.

• The locus of innovation activities are moving towards groups of organizations;
• Firms look at new forms of organizing (online communities, open innovation);
• The convergence of pervasive digital technology causes more heterogeneity in the knowledge resources (come from different industries or different actors);

Question 15

What are four implications of distributed innovation on organizations?

Answer 15

1. Knowledge sources will become more hetereogeneous and often temporarily integrated;
2. Innovation increasingly requires that others be enabled to innovate as well;
   (can lead to strategic relationships between firms, can be enabled by open data or software development kits)
3. Emergence of new industrial structures
   (combining very big firms with specialized niche players to achieve global dominance)
4. Introduction of new forms of risk
   - Trusting too much on technology
   - Risk of misplaced faith on technology as they rendered unrealistic representations on how the actual physical world works

Question 16

What is the role of combinatorial innovation on organizations?

Answer 16

Innovation can now come from the limitless recombination of digital artifacts.
Example: combing the google maps API with your running application to share your progress on facebook.

Question 17

What four implications are there of combinatorial innovations on organizations?

Answer 17

1. A variation of modularity is a crucial condition for combinatorial innovation.
   (the layered modular architecture, so innovation can happen on different layers)
   -> Modules can be designed without fully knowing the whole design of the product, and functionalities can be added later on
2. Organizations need to invest in new forms of creativity.
   (build environments for constrained serendipity and foster innovation through online platforms)
3. Innovation will diffuse differently in an industry
   - -> More like contagious spread than the traditional S-curve, but instead of contagious, where innovation will not change over time, here it will change over time;
4. There will be heightened complexity of the innovation process;
   - Combination of more heterogeneous modules and actors will lead to more risk for systematic failure;
   - Heightened complexity of digital capabilities;

Question 18

What are the concluding remarks of Yoo et al?

Answer 18

• Pervasive digital technologies are rapidly adopted by firms, but they are also fundamentally reshaping them; (due to convergent and generative consequences)
• Firms must learn to build and organize digital platforms;
• Introduction of pervasive digital technologies create unseen and unexpected fault lines –> learn to carefully deal with them;
• Not discussed in the article, but : Digital technology is changing the pace of innovation. It can speed it up due to generative and reprogrammable nature, but also slow it down because firms need to carefully design, build and deploy platforms;