L05 L: INNOVATION STRATEGY Flashcards
Innovation activities are influenced by four elements which are (clock wise)
- strategic intent
- market pull
- Autonomous initiatives
- technology push
Innovation strategy
- provides direction for organizations future
- important as a framework to guide innovation process
Why: value creation
What: innovation opportunities
How: Innovation approach
Sources for strategy:
Internal:
- strength
- weaknesses
External:
- threat
- opportunities
Mintzberg argues that two thing lead to the “realized strategy” What are these two things?
- The intended strategy splits into deliberate (done consciously and intentionally) strategies (strategic intent) and non-realized strategies –> (strategic intent
- emergent strategies –> (autonomous initiatives)
Together they form the realized strategies
Strategic intent (Deliberate)
- formulating opportunity areas (emergent business areas; strategic context)
- shaping organizational context
- direction through resource allocation
- portfolio management
autonomous Initiatives (emergent)
- ideas to realize opportunity areas
- shaping strategic direction
Explain using what a portfolio its role and on what the structure can be based.
Portfolio is an overview of innovation activities.
Role of portfolio:
- evaluate current innovation activities
- guide resource allocation decisions
- Identify areas for improvement
Structure on which portfolio can be based:
- Incremental vs radical
- Time horizon (long vs short term)
- opportunity areas
- progress in the innovation process
- risk
- potential rewards
What are the four sources of uncertainty?
- Technological uncertainty
- market uncertainty
- organizational uncertainty
- resource uncertainty
What are the three types of uncertainty?
(1) Risk
- known distribution
- unknown draw
(2) Uncertainty
- Unknown distribution
- unknown draw
(3) Radical uncertainty
- “unknown unknowns”
Uncertainty and resource allocation
The higher the uncertainty the lower the amount of resources will be allocated. Over time as uncertainty decreases more resources will be allocated to the innovation.
4 APPROACHES FOR DEALING WITH UNCERTAINTY
(BASED ON WILTBANK ET AL. 2006)
Four key approaches for strategic managers:
(1) Planning (causation) (GO: H / MB: Low)
(2) Learning & adaptation (discovery driven planning)
(3) Visionary (breakthrough)
(4) Transformative (effectuation & bricolage)
Goal oriented prediction
This concerns whether strategic management assumes if the future is either predictable or not. (What does the future look like?)
Means - based control
This concerns whether strategic management assumes if the future environment is controllable or not (Can we change the environment?)
Goal oriented prediction high / means-based control low
Planning (causation):
The management assumes the environment is beyond their control and predictable, investing in predictive techniques that allow them to position favorably for the future –> planning strategies
Goal oriented prediction low / means-based control low
Learning & adoption (discovery driven planning)
The management assumes the environment is not predictable and can not be influenced. Here management shortens their planning horizons, and invest in flexible strategies that effectively respond to changes in the environment –> adaptive strategies
