CE Flashcards
Why corporate eship?
Change was always there, endemic, disruptive, continous, chaotic, unpredictable. NEW IS THE PACE.
-Long-term planning and tight control systems don’t work anymore
What are the drivers of chaos?
- Global connectivity
- Trade liberalization
- Technology (Industry 4.0)
– pace (development + diffusion)
– convergence
– in every product, in every industry - Buyer power
- Social inequalities and unrest
- Environmental crisis
What is hypercompetition?
- Intense and rapid competitive moves
- Competitive advantages continuously generated, destroyed or neutralized
- Constant disequilibrium and change
- Sustainable competitive advantage DO NOT exist
So what?
-Long periods of advantage disrupted infrequently by breakthroughs
that erode that advantage
-Short periods of advantage punctuated by frequent disruptions.
-Managing advantages–> Maninging disruption
Scaling laws
Sublinear scaling, Super-linear scaling
Morality of companies
The life cycle of a company tends to follow much more that of an
organism, growing quickly at the beginning & then turning over &
becoming static … dominated by this economy of scale
Average life-span 40-50 years
Half-life only 10 years
Why is avarage life span decreasing?
- Victims of their own success
- Focus on the parts that generate the biggest profit, emphasizing efficiency
- Neglecting the newer parts and potential innovations
“Cities tolerate crazy people. Companies don’t.”
What about the management?
- Managers are not blind!
- They just play their game:
– Listen to customers
– Track competitors
– Improve performance of existing products
– Yield greater profits from high- margin markets
Disruptive innovation
- Rejected by current customers
- Offers lower performance
- Can only be sold in niche markets
- Does not offer high margins
- Undervalued by big companies
New entrants
- Have nothing to loose
- Initially no threat
– Niche markets, with low margins
– Nimbleness and low cost structure - BUT not for long:
– Smaller markets are test labs
– Technology advances, gains superior performance
– Moves to the higher-margin markets
Sustaining vs disruptive innovation
Sustaining inn: Maintaning market leadership through improving, augmenting and iterating
- Current needs
Disruptive inn: Pioneering through exploring, inventing, tending to niche customer base
-Future needs
The innovators dilemma
Will they mature enough?
Could they play in our league?
Should we cannibalize our competitive advantage in short term for long-term gain?
Complexity theory
- How complex systems work?
- Many independent agents interact with each other in multiple ways
- Small actions at one level -> huge consequences elsewhere
- Continuous change, no equilibrium
- Unpredictable outcome
- Self-organizing
Adatptation through self organisation
Self-organization – capacity to react and change to create new
systems and structures without being directed to do so
Three requirements:
* Common identity & purpose
* Free flow of knowledge & information
* Strong personal relationships
Emergent strategies
- Develops over time through continual strategizing as a business balances its
goals with changing circumstances - Unplanned actions and initiatives from within an organization
Requires:
* Learning
* Adaptation
* Collaboration
* Guided by clear strategic intent
Its not CHAOS
