MD 815 Management of Technology and Innovation Session #1: Course Introduction & Overview

Two Prerequisites of Successful Technological Innovation 1. Knowing where and when to innovate (1st half of course) 2. Executing your innovation strategy (2nd half of course)

1. Knowing Where and When to Innovate l Innovation is generally a good thing... –But that doesn’t mean more innovation is always better l A fundamental dilemma –Too little innovation... –Too much innovation... l Two key tasks a. Knowing what your distinctive competencies and assets are b. Understanding the external technical/economic environment

1a. Knowing What Your Distinctive Competencies and Assets Are (Sessions 2, 5) l Do you have the “right stuff” to innovate with technology? –Resources: money, talent, reputation, intellectual property…only go so far l Issues –What distinctive competencies and complementary assets does our firm possess? –And what competencies and assets are required to pursue different innovation strategies? l Concepts and tools –Core competencies (Pralahad and Hamel) –Preferred positions w.r.t key complementary assets (Teece)

1b. Understanding the External Technical/ Economic Environment (Sessions 3-7) l What kinds of technologies represent the most fertile ground for applying our innovative capabilities? l Issues –How do high tech industries evolve? How can we tell what technologies are destined for market dominance? –What are the primary barriers to adoption of our innovative products? How can they be over come? –How can we be the ones to profit from our innovations? l Key tools and concepts –Forecasting: S-curves (Foster) –Scenario Planning (Schwartz)) –Innovation appropriability (Teece) –Disruptive vs. sustaining technologies (Christensen) –Positive reinforcement cycles in adoption (Shapiro & Varian)

2. Executing your technology strategy (2nd half of course) l History is littered with companies that failed to benefit from their innovations –Why? => Didn’t have an effective organization and/or process for translating technologies into products l Two key tasks 2a. Crafting an innovation deployment strategy and process (Sessions 8-10) 2a. Putting an organization in place than can implement your strategy and process (Sessions 11-13)

2a. Technology Deployment Processes (Sessions 8-10) l Issue –How can we most effectively deploy new technologies? l Key concepts and tools –Real options thinking (Hamilton, McGrath) –The ”Chasm" between early stages of innovation diffusion (Moore) –Organizational learning during technology implementation (Leonard)

2b. Building Innovative Organizations (Sessions 11-13) l Issues –How can we build innovative capabilities? –How should we make sourcing decisions for key innovation resources? –How can we give employees motivation and direction that is aligned with long term objectives? l Key tools and concepts –Absorptive capacity (Cohen & Levinthal) –Strategic alliances (Hamel et. al, Afuah) –Strategic intent (Prahaald)

Framework Application #1: Scenario Planning l The problem with traditional forecasting –In complex and uncertain environments, what variables matter? Do we know enough to quantify them? How do they interact? l Solution: Scenario Planning –A process of inventing and analyzing holistic stories about several plausible futures –A tool for making sense of the future –A tool for developing robust strategy l Example application areas: –Electric vehicles, interactive TV, distance learning for MBA education

Framework Application #2: Waging a Standards War l l Many technologies/standards become much more useful to any single adopter to the extent that many others also adopt – –Results in positive feedback loops in adoption – –Provokes in standards competitions characterized by a tendency to "tip" towards "winner take all" outcomes and "technology lock-in" l l Implication: – –Must be prepared to wage a “war” to insure your preferred standard is adopted l l Example application areas: – –Game consoles, personal digital assistants, media players

Framework Application #3: Crossing the Chasm l l A discontinuity (a “chasm”) exists between the early market for an innovation and the mass market – –Early market: customers are risk and novelty seeking – –In the mass market customers are risk averse pragmatists l l Example application areas: – –Wireless internet, peer-to-peer computing, smartcards