L01 A: Youngjin Yoo: Organizing for Innovation in the Digitized World Flashcards
Digital materiality:
Refers to what the software incorporated into an artifact can do by manipulating digital representations
Fundamental, unique properties of digital technology:
(1) Reprogrammable functionality: separation of function from the physical device - possibility to program and re-program digital artifacts.
(2) Data homogenization: digital representations maps any analog signals into a set of binary numbers – information transferred into the same output/representation. Loose coupling of content from the carrier.
As digital technologies become pervasive, the unique properties of digital technology provide environments of open and flexible affordances resulting in 2 unique characteristics of organizational innovation with digital technologies:
(1) Convergence
(2) Generativity
Technology affordance:
An action potential, what an individual or organization with a particular purpose can do with a technology or information system.
The affordances of pervasive digital technology enable innovations of convergence in three ways:
(1) User practices:
Brings previously separate user experiences together.
(2) Object boundaries:
Digital technology is increasingly embedded into previously non digital physical artifacts (smart products and tools).
(3) Industry boundaries:
Brings together previously separate industries.
Generativity:
Technology’s overall capacity to produce unprompted change driven by large, varied, and uncoordinated audiences. 🡪 created by pervasive digital technology.
Generativity leads to three phenomenon:
(1) Procrastinated binding of form and function:
products are dynamic and can change over time. New capabilities can be added after a product or a tool has been designed and produced.
(2) Wakes of innovation:
use of digital technology creates multiple (unplanned) innovations by other actors (sparks innovation).
(3) Leaves unprecedented volume of digital traces as by-products (digital exhaust):
which can lead to new innovations that were not anticipated by the original innovators or consumers (derivative innovations). Unrelated to the initial context where the data was produced.
Traits of innovations associated with pervasive digital technology:
(1) Importance of digital technology platforms
(2) Emergence of distributed innovations
(3) Prevalence of combinatorial innovation
Importance of digital technology platforms
Platform:
building blocks that serve as a foundation upon which other firms can develop complementary products, technologies or services.
Organizational implications:
(1) Organizations must be designed to manage the delicate balance of generativity and control in the platform.
- Too much control 🡪 risk of driving out third-party developers and choking the generativity of its platform.
- No control 🡪 platform becomes too varied and fragmented, thus less useful for both developers and customers 🡪 difficult to capture value from innovations.
(2) The sharing of data and processes with digital tools challenges conventional norms of ownership, roles, and rules 🡪 triggers new configurations of relationships among actors involved in innovations.
(3) Innovation activities become horizontal 🡪 applying the same innovation activities and knowledge across multiple products or platforms.
Emergence of distributed innovations
Geographical dispersion of innovation activities, democratization of the innovation process, and increased heterogeneity of knowledge resources.
Organizational implications:
(1) Increasingly heterogeneous and temporarily integrated knowledge resources.
(2) Increasingly requires others being enabled to innovate as well 🡪 offers opportunities for new organizational and strategic relationships around different technological and organizational artifacts that are designed to facilitate distributed innovation.
(3) Emergence of new industrial structures (long tail of extremely specialized niche players and superstars that quickly achieve global dominance as a result of their capability to integrate increasingly heterogeneous bodies of knowledge).
(4) New forms of risk 🡪 creating new products or services by combining existing modules with embedded digital capabilities.
Prevalence of combinatorial innovation
Prevalence of combinatorial innovation 🡪 recombination as a source of novelty.
Organizational implications:
(1) Modularity is a crucial condition, but with combinatorial innovations the boundary of a product is unknowable and the product or service remains incomplete.
(2) Organizations must build environments for constrained serendipity 🡪 emergent and serendipitous behavior is supported among distributed organizations.
(3) Innovation diffusion 🡪 S-curve assumes that innovations are being spread but are not changing. With combinatorial innovations, ideas will not simply spread but will mutate and evolve as they spread.
(4) Heightened complexity of the innovation process 🡪 new forms of organizational risk.
