Lectures Flashcards
Core of the SEOR course
the secret to long term firm survival, survival is the exception
Improvement vs renewal
- Improvement is needed for short term money and success
- Renewal is needed for long term success but cost shot term money
Sweet spot of optionality
Reinvest into new potentially disruptive processes that would disrupt your own
Product life cycle:
- Fluid: product innovation, high uncertainty, high investment, key: adaptability
- Transitional: from informal to formal, flexible and responsive to rigid and predictable, from external orientation to internal
- Specific phase: stable tasks, coordination and control , top-down, predictability
two types of innovation discontinuities
- Competence enhancing: (sustaining innovation)
o Large improvements in price/performance
o Builds on existing knowledge
o New product or new processes
o > established players get benefit - Competence destroying: (new entrances are the one who benefit)
o Large improvements in price/performance
o Existing knowledge becomes obsolete
o Entirely different knowledge and competencies
two types of innovation processes
- Incremental:
o Core ideas we can always improve
o Traditional new product development process
o E.g. faster computer - Radical
o Companies do not like this so try to avoid it voluntary. Crisis is needed
o E.g. internet, cars, airplanes, mobile phones
Deeper organizational barriers
- Economic: no motivation
o sunk costs, invested too much in current, rational perspective to keep going - Cognitive: no understanding/ability
o Knowledge and expertise in one domain: lack in other domain. Innovation comes from the other domain
o Core capabilities = core rigidities
o Competency traps: use of increasingly inferior resources
Overvaluing internal knowledge
Dismissive attitude towards external resources/capabilites - Social/psychological: fear of risk / discomfort
o Fear or complacency
o Resistance to change
Organising for radical innovation:
- Separation is a crucial condition for renewal
- The more disruptive, the more seperation
A question to ask companies to see how they feel about innovation:
- What happens to the innovation budget in good times, and what happens to the innovation budget in bad times?
- In crisis we cut back in innovation > not walking the talk, not prioritized.
- If they keep it, they prioritize innovation
Seperation allows:
an escape of the 3 forces (cog/sos/eco) and foster innovation
Give up autonomy and control for
Types of teams:
- Functional: technical, simple problems, sequential approach
- Light weight: incremental inno, coordination through pl
- Heavy weight: adjacent innovation, PL has power
- Autonomous: ‘tiger team’, radical inno, team has ‘carte blanche’, pl is boss
Strategic schizophrenia
two key questions
o How can we strengthen our core business?
o How can we disrupt our core business?
System 1 vs System 2 thinking
- 1: fast, instinctive and emotionally driven: automatic, effortless, ‘believer’
- 2: slow, well-considered, rational: purposefull attention, subjective, ‘falsifier’
Innovation pyramid - asking the why:
- Start with governing thought: answer a question
o Key line: sub-conclusions that substantiate the main answer
Support lines: data, facts, or givens that support the key line
^^ should be mutually exclusive and collectively exhaustive (add up together)
What culture is supportive of strategic entrepreneurship?
- Willingness to cannibalize (opposite of barriers: economic)
- Strong future orientation (opposite of barriers: cognitive)
- Tolerance for risk (opposite of barriers: social/emotional)
Strategic entrepreneurship phases:
- Discovery: experimentation and risk taking Entrepreneurial
- Incubation: transition
- Acceleration: efficiency and risk aversion Managerial
- Hand over to business
Balancing two kind of capabilities:
- Exploration oriented: doing the right things
o Creativity, vision, flexibility - Exploitation oriented: doing the things right
o Planning, perseverance, precise
Three horizons within companies (Mckinsey standardized)
H3: future business (5+ years)
H2: tomorrows core business (3-5 years)
H1: core business (1-3 years)
Crossing the chasm model – Geoffrey Moore (important)
- Needs of the mass market are often different from the early adaptors
- Only way to cross this, try, fail, learn, no scientific way (bezos example)
4 innovation traps within companies:
- Skipping h2 from h1 to h3
o Philips hue, went for diy stores, turned price competition as went to current market, had they gone h2 they learned they should have gone luxury
o Often happens in corporate frameworks - It’s not perfect yet (escalation of commitment)
o Mass markets does not need perfect products, they need good enough
o Never makes it out, move to slow
o Paradox, feel like a project is their baby, but lose rational reasoning if too continue, its good but should not make the decisions - Catch 22,
o if it gets successful they claim it, if it goes wrong they blame you
o H1 and H3 try to claim, H2 gets the blame - Team conditions: Try, fail, learn, improve sequence,
o Try and fail, phycological safety, you can fail and not be made fun of
o Learn and improve, constructive conflict, hard on content, soft on person
o Safety and conflict are opposite, so paradox, inno team challenge
o Booking.com looked at these conditions not the contents or projects
Organizational identity:
- Foundation (domain): Who are we as an org, what is our DNA, where do we belong
- Role: what is the role we have within the domain
Conditions for integration of innovations:
- Ability to integrate
o coordination & exchange of knowledge = cognitive integration - Willingness to integrate
o Reduction of conflicts between inno teams and org = economic & emotional integration
Conditions for integration of innovations (like the main pic of the course):
- Structure & systems
o Control systems
o X-functional interfaces - Strategy & leadership
o Strategic paradox
o Shared vision and identity
o Sponsors - Culture & people
o Rotation of people - Process
o Shared decision
Balancing act among 3 dimensions:
- Temporal: short term vs long term
- Behavioural: freedom vs control
- Learning: forgetting vs borrowing
