MBA 816 Disruptive Tech & Innovation Final Exam Review PDF

MBA 816 Disruptive Tech & Innovation Final Exam Review Innovation – Strategy Link ▪ Goal of business organizations is to create value ▪ It is important to link a company’s innovation efforts to its overall strategy. ▪ Connect what you have learned about disruptive innovation to...

MBA 816 Disruptive Tech & Innovation Final Exam Review Innovation – Strategy Link ▪ Goal of business organizations is to create value ▪ It is important to link a company’s innovation efforts to its overall strategy. ▪ Connect what you have learned about disruptive innovation to strategies that businesses should use to (1) predict, (2) prepare for and (3) pursue technologies that may build on or threaten established business models Business organizations are adaptive open systems ▪ Adjust behavior in response to feedback ▪ Open systems because – require resources from the environment – use resources to create new things – send their creations back out to the environment The Aggregate Project Plan and Project Portfolio Market Impact Existing ▪ Creates discipline in the Advanced Create New Enter New New Customers / Current Segment Customers Development (build share) (preserve share) project selection & creation segment Segment process New Core Product / Service Break - ADJACENT through Expanding from existing ▪ Helps define the scope of Next Generation of business into “new to the company” business what any individual project Core Product / Service must achieve Product or Platform or Next Service Addition to Product Generation ▪ Focuses attention on long CORE/ Service Family Optimizing existing term expansion of critical products for existing customer technical and organizational capabilities Enhancements Derivatives and Enhancements and Derivatives Classification of Project Types ▪ There are different types of projects, as you saw in the Innovation Ambition Matrix − Breakthrough: transformational − Platform and adjacent: next generation e.g. new product or service line − Enhancement and derivative: refinements of an existing product or service ▪ Classification allows you to think about your project opportunities in a strategic manner How do Organizations Create Value? What is the Role of Innovation in Value Creation? STRATEGY Inputs Transformation Outputs Economic Processes Capital Products/ Transforming Services Natural Capital inputs into Performance & Intellectual outputs Reliability Capital: Value creation Impact on - Human Capital Stakeholders - Social Capital Feedback Types of Input Economic Capital: financial and tangible resources Natural Capital: refers to resources from the natural environment Intellectual Capital – Human Capital: refers to the knowledge and abilities of individuals – Social Capital: refers to intangible resources created through relations among individuals Central Role of Intellectual Capital in the Knowledge Economy Intellectual capital is a measure of the value of a firm’s intangible assets Including: – Reputation – Stakeholder relationships – Brand names – Knowledge and capabilities – Innovative capacity – Dynamic capabilities To Protect or Share? ▪ Firms must decide whether and how to protect the intellectual capital that underpins their technological innovations. ▪ Protecting innovation helps a firm retain control over it and appropriate the rents from it. ▪ However, sometimes not protecting a technology is to the firm’s advantage and may encourage others to support the technology and increase the rate of adoption and diffusions and thus its likelihood of becoming a dominant design. The Effectiveness of Protection Mechanisms ▪ Intellectual property rights are more difficult to define and protect than property rights for physical assets. ▪ Unlike physical assets, intellectual property can be stolen. ▪ If intellectual property rights are not reliably protected by the state, there will be no incentive to develop new products and services. Patents ▪ Patents, trademarks and copyrights each protect different things. ▪ Patents: rights granted by the government that excludes others from producing, using, or selling an invention. ▪ Must be useful, novel, and not be obvious. ▪ Utility patents protect new and useful processes, machines, manufactured items or combination of materials. ▪ Design patents protect original and ornamental designs for manufactured items. ▪ Plant patents protect distinct new varieties of plants ▪ Patent Trolling: obtaining, hording and using patents for licensing or litigation purposes rather than in the production of one’s own goods or services. In 1998, many software algorithms became eligible for patent protection. This has now turned in to a problem due to “patent trolling.” Trademarks ▪ Trademarks and Service Marks: a word, phrase, symbol, design, or other indicator that is used to distinguish the source of goods form one party from goods of another (e.g., Nike “swoosh” symbol) ▪ Rights to trademark are established in legitimate use of mark; do not require registration. ▪ However, marks must be registered before suit can be brought overuse of the mark. ▪ Registration can also be used to establish international rights over trademark. Types of Collaborative Arrangements Joint Ventures: A particular type of strategic alliance that entails significant equity investment and often establishes a new separate legal entity; business entity created by two or more parties, generally characterized by shared ownership, shared returns and risks, and shared governance; f.ex. NBC Universal Television Group and Disney ABC Television Group started a joint venture called HULU in 2008 Licensing agreement: contract between two parties (the licensor and licensee); licensor grants the licensee the right to use the brand name, trademark, patented technology, or ability to produce and sell goods owned by the licensor, typically in exchange for royalties. f.ex. use of music for commercial activities Outsourcing: When an organization (or individual) procures services or products from another rather than producing them in-house. Collective Research Organizations: Organizations formed to facilitate collaboration among a group of firms. Choosing and Monitoring Partners ▪ Resource fit: How well does the potential partner fit the resource needs of the project? Are resources complementary or supplementary? ▪ Strategic fit: Does the potential partner have compatible objectives? ▪ Impact on Opportunities and Threats: How would collaboration impact bargaining power of customers and suppliers, degree of rivalry, threat of entry or substitutes? ▪ Impact on Internal Strengths and Weaknesses: Would collaboration enhance firm’s strengths? Overcome its weaknesses? Create a competitive advantage? ▪ Impact on Strategic Direction: Would the collaboration help the firm achieve its strategic intent? Design Thinking ▪ Understanding human-centered design will reframe the way you look at problems and solutions in your job, your company, and your life. Central Questions of Design Thinking How are things interrelated? If we change one part of a system, what will be the effect throughout the system? Innovation Concepts & Definitions ▪ What is a system? - A set of interconnected entities that work together to produce an outcome ▪ What is a model? - A visual representation of a system with nodes and connections ▪ What does this have to do with design? - Using a “systems lens” to view the world is key to design thinking. Design Thinking Process 1. Empathize: Human centered research to understand people's needs; questioning using a novice mindset when asking questions 2. Define: combining the research to define the problem based on user experience 3. Ideate: generate a range of ideas; include others across disciplines, skill sets, and perspectives 4. Prototype: build a real representation of the solution or model, make visible to the team 5. Test your ideas: share prototypes with users for feedback 6. Implement: Put the vision into effect Iterative non-linear process Learn about users through testing Emphasize to help define the problem Tests create new insights for the project Empathize Define Ideate Prototype Test Learn from prototypes to spark new ideas Tests create insights that redefine the project Implementation Customer Journey Maps in Action Organizing and Managing Innovation ▪ A tool that design teams use to learn more ▪ Find the optimal organizational structure to about target users, to visualize user enhance innovation experiences and add insights of what ▪ Agile organizational structures made up of teams customers think and feel. ▪ Harnessing knowledge from diverse teams Meaning of Innovation ▪ Value a product or service delivers to customers - Functional: f.ex. a wireless charger or delivery service (Amazon Prime) - Emotional: f.ex. the launch of Apple’s rose gold devices ▪ Innovation in terms of performance that is realized by the business: f.ex.ROI, a reduction in resources or time, improved customer experiences including (either internal and external) ▪ Improves people‘s lives for the better - Understand what needs to be solved and - Pinpointing the value in an opportunity is crucial - Create value for the customer within the appropriate timing The substitution of Technology can be challenging! Scenario 1: When challenges associated with new technology are low AND opportunities of improving the existing technology are low New Technology becomes dominant in market Old technology fails Creative Destruction Example (Visa Case B2B): The pace of technology substitution leading towards creative destruction is high in the B2B segment. Move swiftly to blockchain implementation to exploit blockchain opportunities and prevent disruption by other incumbents. Source: Adner, R. and Kapoor, R. (2016) Innovation Ecosystems and the Pace of Substitution: Re-Examining Technology S-Curves. Strategic Management Journal, 37, 625-648.  The substitution of Technology can be challenging! Scenario 2: When challenges associated with new technology are high AND opportunities of improving the existing technology are high Pace of Substitution is likely to be low Example (Visa Case Retail): In the retail sector, Blockchain didn’t pose a threat of creative destruction for Visa and there were significant opportunities to improve the existing technologies; Blockchain technology especially with respect to cryptocurrencies faced significant challenges. Source: Adner, R. and Kapoor, R. (2016) Innovation Ecosystems and the Pace of Substitution: Re- Examining Technology S-Curves. Strategic Management Journal, 37, 625-648. Sustainable Speed: Driver of the Innovation Cycle ▪ Customer feedback is crucial when exploring ideas and testing assumptions ▪ Running rapid and targeted experiments enables to gather timely and relevant feedback regarding emerging needs and market opportunities ▪ Taking too long to launch even if a firm found the perfect solution can lead to failure ▪ Delays in execution allows competitors to moves in or lose the customer Neither speed nor pure innovation triumph ▪ Finding the sweet spot that supports the launch of a product or services as soon as the product or services is providing value to the client is important Balance between speed and innovation required to create competitive advantage ▪ There is no point in focusing on innovation if a firm cannot get the product to the customer quickly and efficiently ▪ There is no point focusing on speed, if what a firm does isn’t delivering value to the customer ▪ Need for a healthy balance of high risk, high return, focus on experimentation and innovation and low risk, stable investments, with high confidence creates value to end customers  Tuckman’s Team Development Model ▪ Teams go through four stages ▪ Teams can regress when there are changes to members ▪ Mature teams may not longer need leadership Effectiveness Performing Leader delegates Norming and oversees Leader facilitates Storming Leader strives to Leader mediates Forming and focuses make the team Team is dependent self-reliant on leader Time Tuckman’s Team Development Model Effective team building in four stages: 1. Forming: team is coming together; members are not sure how they fit into the team, how they will work as a team; how leader will manage the team, and whether it will be successful. 2. Storming: members are still getting to know each other; become more familiar, power struggles may emerge; individual members may set the tone for the rest of the team how to work; other team members may push back ; leads to conflict; members may challenge or question leader’s authority 3. Norming: team becomes focused and productive; better understanding of how the team works; feel more comfortable collaborating, provide and receive feedback, leaders navigate responsibilities and asking for help or support. 4. Performing: The magic happens! Team members trust and respect each other; members understand how the team works, how they fit into the team, and what is required to succeed; team is motivated by leader; feels driven and engaged; resulting in high levels of performance. Tuckman, Bruce W (1965). "Developmental sequence in small groups". Psychological Bulletin. 63 (6): 384–399. GRPI Team Effectiveness Model (Richard Beckhard) Highlights different aspects of team cooperation ▪ identify goals ▪ clarify roles Goals ▪ clarify processes ▪ interpersonal relationships of team members Roles Processes Interpersonal Relationship GRPI Team Effectiveness Model (Richard Beckhard) Goals, Roles, Processes, Interpersonal Relationships Goals: foundation of good teamwork; establish core mission and team purpose; provide direction to the team (where they are and where they aim to be); unite individual team members in their efforts; pursuing a common goal is what makes a team a team! Roles: Defined by tasks, authority, responsibilities; tasks support the identified goals; functional roles are defined by the tasks that need to be accomplished and require specific skills, knowledge and experience Processes: actions or steps necessary to achieve a goal; governance tool focused on coordination, communication and organized to overcome inefficiencies; focused on output quality while maintaining operating flexibility; Interpersonal relationships: relationships and individual styles of team members; focused on establishing trust, open communication and feedback in an effort to support an effective working environment; enhancing level of trust and respect; open communication, listening carefully and empathizing; Change Agent ▪ Enabler who promotes change within group, team or organization also called an agent of change, change advocate or champion of change ▪ Promotes and supports new ways or methods of doing something within the company f.ex. a new process, a new technology, the adoption of a new management/organization, structure or transformation of an old business model to a new one ▪ Executives and managers are often expected to be change agents ▪ BUT change agents are not limited to high-ranking employees; they can be a lower tier employees with the right mix of skills, personality characteristics and ability and authority to motivate others through the transformation ▪ A change agent can also be someone outside the organization, f.ex. a consultant, coach or industrial psychologist hired to manage a change effort. Change Agent Responsibilities ▪ Promoting the value and necessity of the transformation that is being undertaken by the organization; ▪ Formulating how the transformation / change will be implemented ▪ Providing guidance and support through the transformation process ▪ Ensuring that the transformation (f.ex. new processes, procedures, structures, merging of organizations, offshoring and outsourcing etc) is implemented in a manner that deliver the expected value and benefits to the organization ▪ Advocating for the change / transformation initiative ▪ Mediating between stakeholders Agile Operating Models Value: Understand where value is created in industry and the company’s distinct value; end-to-end value streams Structure: Define appropriate organizational structure f.ex. reporting lines; create organization map of organizational groupings based on value streams; define capabilities (disciplines, expertise etc) Agile teams: identify teams and define mission in alignment with value streams; create or select agile way of working f.ex. Cross-functional collaboration; agile workflows Backbone: identify enablers of agility; define core processes, technology, assign people; changes in culture and mindsets Road map: decide on implementation approach; develop road map; prioritize immediate next steps Comella-Dorda, S., Handscomb, C., & Zaidi, A. (2020). Agility to action: Operationalizing a value-driven agile blueprint. McKinsey Insights, Agile Operating Models How does one create incentives for teams that do not own a P&L? Teams without P&L ownership require special incentives ▪ Objectives and key results (OKRs) come into play ▪ OKR ties strategy to actions carried out by teams How does culture need to adapt to make this work? ▪ Agile transformations are cultural transformations ▪ Operationalization of agile business models require diligent management of interdependence among teams ▪ Constant emphasis on customers, requires multiple mindset shifts. Empowerment needs to be in place at each step of an agile transformation! Leaders must provide a strong capability-building agenda to ensure employees have the required skills = essential to achieve transformation’s goals Biggest impediment to agile transformations: Leaders with a lack of trust in their employees! Comella-Dorda, S., Handscomb, C., & Zaidi, A. (2020). Agility to action: Operationalizing a value-driven agile blueprint. McKinsey Insights,  Role of the Leader Comella-Dorda, S., Handscomb, C., & Zaidi, A. (2020). Agility to action: Operationalizing a value-driven agile blueprint. McKinsey Insights, Central Role of Knowledge in the Digital Age Human Capital refers to ▪ the knowledge and abilities of individuals ▪ includes the individual capabilities, knowledge, skills, and experience of the company’s employees and managers Social Capital refers to ▪ intangible resources created through relations among individuals ▪ effective working relationships among talented individuals ▪ includes the network of relationships that individuals have throughout the organization Knowledge management is critical to organizational success ▪ Explicit knowledge: codified, documented, easily reproduced, and widely distributed ▪ Tacit knowledge Knowledge for Competitive Advantage Tacit knowledge Explicit (codified) knowledge ▪ Embedded in personal experience ▪ Can be documented ▪ Shared only with the consent and participation ▪ Can be widely distributed of the individual ▪ Can be easily replicated ▪ Has the organization effectively used ▪ Can be reused many times at very low cost technology to codify knowledge for competitive advantage? Attracting Human Capital ▪ Hire for attitude, train for skill: – General knowledge and experience – Social skills, values, beliefs, attitudes Social Capital: Potential Downside Groupthink: Distortion or selective use of information to favor preferred courses of action ▪ Thinking or making decisions as a group in a way that discourages creativity or individual responsibility ▪ A psychological phenomenon that occurs within a group of people in which the desire for conformity in the group results in a dysfunctional decision-making outcome. Social Networks ▪ Social ties can link individuals so they can – exchange information and support – develop trusting relationships to improve the group’s effectiveness ▪ Social network analysis depicts the pattern of interactions among individuals and helps to diagnose effective and ineffective patterns. ▪ Who links to whom within the network? ▪ Who communicates to whom and how effective is this communication? Creating Value: Using Technology to Leverage Human Capital and Knowledge Sharing knowledge and information throughout the organization. ▪ Conserves resources ▪ Develops products and services ▪ Creates new opportunities Technology can leverage human capital and knowledge ▪ Within the organization ▪ With customers ▪ With suppliers Technology Trends Facial Recognition Biotechnology A method of identifying or Manipulation through genetic verifying the identity of an engineering of living organisms individual in photos, video or or their components to produce real-time useful usually commercial products Technology Trends Crowd Learning Human Machine Interface a method of acquiring software that enables knowledge based on sharing operators to manage industrial experience and information and process control in a group of people. machinery via a computer- based graphical user interface. Technology Trends Drone Technology Augmented Reality Unmanned aerial vehicles Technology that creates an Data science enhanced version combines or the real that use a propulsion system multi-disciplinary as underlying technology physical world that is fields and achieved computing through the usetoofinterpret data digital vidual allowing to go to places that for decision humans can’t access. elements, soundsmaking or other sensory stimuli Technology Trends Virtual Reality Voice Recognition The use of computer modeling and simulation that A technique in computing enables a person to interact with an technology by which specialized artificial three-dimensional visual or software is created to identify, sensory environment. An artificial distinguish and authenticate the environment where people can do voice of an individual speaker; the things and interact using mobile technology evaluates the voice devices f.ex. glasses biometrics of an individual Technology Trends Cloud Computing Nanotechnology The use of a network of remote servers hosted on the internet to The use of matter on an atomic, store, manage, and process data, molecular, and supramolecular instead of a local server or a scale for industrial purposes. personal computer.