Innovation and Technology Management

Innovation and Technology Management
(CNP532) Dr Keith Hampson School of Construction Management and Property Dr Keith Hampson, Construction Management and Property, Queensland University of Technology

INTRODUCTION Introductions Background and interests of audience
Personal Group Background and interests of audience Participant goals

OBJECTIVES To provide overview of key concepts and importance of STM to competitive performance of firms today. To provide background to the relevant literature. To provide a set of concepts and tools for use in formulating and implementing technology strategy. To work together to use the strategic technology frameworks to analyse a case study example. To challenge traditional approaches.

EXPECTED OUTCOMES Understand the important effect that technology has on business today. Discuss current perspectives and better understand the role that management of technology has in building and maintaining a competitive edge in business. Be able to apply key concepts and tools to enhance the competitive performance of your own organisation.

More the guide on the side, rather than the sage on the stage
MY ROLE … More the guide on the side, rather than the sage on the stage

TECHNOLOGY AND COMPETITIVE ADVANTAGE

Why Study Strategic Technology Management? International Perspectives
TECHNOLOGY AND COMPETITIVE ADVANTAGE INTRODUCTION Why Study Strategic Technology Management? International Perspectives Basic Concepts and Definitions Technological Change and Economic Growth

WHY STUDY STRATEGIC TECHNOLOGY MANAGEMENT?
More effective use of engineering and science skills is essential if Australia is to develop the industrial structure necessary for economic growth. This requires technological and multi-skilling of our engineers and scientists, a balance of skills—technical and managerial—with a finely developed social awareness of the impact of their decisions on industry, community and environment. (Kim Beazley, former Minister for Employment, Education and Training)

The industrialist who rejects the aid of science is about to be weighed in the balance.
He will then be found wanting, and his business will soon pass to other hands. The wise investor will avoid him and his companies. (Arthur Dehon Little, The Handwriting on the Wall, 1991)

WHY STUDY STRATEGIC TECHNOLOGY MANAGEMENT?
A society that blindly accepts the decisions of experts is a sick society on its way to death. The time has come when we must produce, alongside specialists, another class of scholars and citizens who have broad familiarity with the facts, methods and objectives of science and thus are capable of making judgements about scientific policies. Persons who work at the interface of science and society have become essential simply because almost everything that happens in society is influenced by science. (Dubox, 1970, p227)

APESA (1992) Australia’s engineers are well prepared in engineering technology, but not as well prepared for the full practice of engineering and business dimensions. ... Specialists—like managing engineers and scientists—must also have broader and non-technical skills, and the capability to perceive the wider opportunities provided by technology so that possibilities can be turned into commercial products.

INTERNATIONAL PERSPECTIVES Europe (Collins et al, 1991)
Perceptions of how management would handle problems in adoption of new technologies. Training needs for technology - management interface. More effective management of exploitation of technology and how to introduce new products and processes. Conclusion: technologists, although enthusiastic and dedicated, exhibited naiveté in their approach to work which led to the creation of a new technology rather than the creation of a business opportunity.

THEY PROPOSED A ... 2-phase remedy for shortfall:
1. Postgraduate experience and training designed to produce operational competence at junior to middle management levels in the organisation. 2. Encourage middle level managers to think like top management through Technology Management courses. Emphasis to be on strategic rather than on operating issues.

INTERNATIONAL PERSPECTIVES New Zealand (Kirk, 1994)
Qualifications of senior management. 6% of board members of top 200 companies were technically trained. Individual senior management needs and attitudes. Needs not covered by general management programs Need for such topics as: assessing and evaluating technological options managing technical people and teams strategic role of technology technology project management technology transfer and legal issues managing change and innovation.

INTERNATIONAL PERSPECTIVES United States (Construction Industry Institute, 1992)
Reviewed building construction projects: To remain competitive, creative and innovative ideas to improve productivity must be explored. Innovation is a key for obtaining a competitive advantage in any industry. For innovation to take place, an environment that stimulates or encourages new ideas must be created by management.

DEFINITION Technology: Artifacts (products & processes of production) and the corresponding knowledge bases (ideas, concepts & modes of inquiry) that firms use to generate and maintain a particular level of performance (Layton, 1974)

Effectiveness Vs Efficiency

TECHNOLOGY STRATEGY Strategies are both plans for the future and patterns from the past (Mintzberg, 1987) Technology Strategy: A pattern of decisions that sets the technological goals and means for achieving those technological goals and the business goals of the organisation (Adler, 1989)

2 PRINCIPAL ECONOMICS RESEARCHERS STUDIED RATE OF ECONOMIC GROWTH
1. R.M. SOLOW Paper Reviewed US economy 87.5% of growth in output/worker unaccounted for 2. MOSES ABRAMOVITZ Paper Reviewed US economy 85.0% of growth in output/worker unaccounted for LARGE COMPONENT OF INCREASE IN PRODUCTIVE OUTPUT CANNOT BE ACCOUNTED FOR BY A CORRESPONDING INCREASE IN TANGIBLE INPUTS "TECHNICAL CHANGE"

TECHNICAL CHANGE - ECONOMIC GROWTH

CONSTRUCTION INDUSTRY PERSPECTIVES

GROSS EXPENDITURE ON R&D/GDP RATIO IN OECD COUNTRIES
Sweden 3.1% USA 2.8% Japan 2.8% Switzerland 2.7% … Australia 1.6% (15th)

Major Trends Impacting Construction Products and Processes (Tatum, 1988; CII, 1992; Gann, 1993)
Use of advanced IT in construction process and buildings themselves Mechanisation of construction activities Prefabrication and increased off-site fabrication New advanced materials More demanding owners and regulations Global markets for manufactured goods and engineering and construction services, foreign competition and ownership New project delivery forms, eg. finance, design, build, own, operate, transfer Resource constraints, eg. construction professionals, skilled trades, permanent equipment and materials of construction ?

TECHNICAL ATTRIBUTES OF
FUTURE FACILITIES: Decreased project size & greater emphasis on retrofit Increased concern for employee and public safety Waste minimisation and environmental protection Increased quality and greater production flexibility Increased scope of mechanical & electrical systems to conserve energy and improve indoor air quality (Source: CII 2000 Task Force, 1992)

TECHNOLOGICAL TRENDS Increased benefits from computer applications
simulation, CAD Increased automation and application of robotics design for automation, human/machine issues Advanced construction materials composites, hi-strength steels and concretes (Source: Tatum et al, 1992)

CONSTRUCTION INDUSTRY
A net importer of technology primarily from mining, materials handling, motor vehicles and equipment sectors Construction is critical to the economy employment and contribution to GDP Advance in construction efficiency affects performance of other industries

CONSTRUCTION INDUSTRY
Typically approximately 0.4% of sales invested as R&D cf % in electronics 2 - 3%in manufacturing Japan > 1% in construction Can this continue?

CURRENT CONSTRUCTION PRACTICE
Traditional construction delivery system Segmented industry Conflicting interests Great opportunities for advancement

Long term effect on GDP on reducing costs by 10% in a range of Australian service industries
Non-residential Construction 0.5 1 1.5 2 2.5 3 OTC Gas Repairs Australia Post Investment Water Water Transport Insurance Air Transport Services to Transport Non-bank Finance Mechanical Repairs Telecom Defence Rail Transport Personal Services Banking Road Transport Welfare Electricity Public Administration Health Education Residential Building Business Services Construction is KEY to economic growth

(cf. Bid Opening: A poker game in which the losing hand wins)
THE CONSTRUCTION FIRM Definition of a Contractor … A gambler who never gets to shuffle, cut, or deal. (cf. Bid Opening: A poker game in which the losing hand wins) or is this another case of the Victim Complex?

POSSIBLE TECHNOLOGY STRATEGIES FOR CONSTRUCTION FIRMS (Tatum 1988)
Not proud Efficiency expert Construction R&D heresy Work smarter Forward technical integration Backward technical integration

STRATEGIC TECHNOLOGY FRAMEWORKS

STRATEGIC TECHNOLOGY FRAMEWORKS
To focus our understanding of the concepts surrounding strategic technology management. To use as a future tool for analysis and action.

EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGY
(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000) TECHNOLOGY STRATEGY EXPERIENCE TECHNICAL CAPABILITIES INTERNAL ENVIRONMENT GENERATIVE MECHANISMS INTEGRATIVE MECHANISMS EXTERNAL ENVIRONMENT BUSINESS EVOLUTION ORGANISATIONAL CONTEXT INDUSTRY Monitor, review and standardise

TECHNOLOGY STRATEGY FRAMEWORK (Hampson, 1993)
TS = TECHNOLOGY STRATEGY COMPETITIVE POSITIONING SOURCING OF TECHNOLOGY SCOPE OF STRATEGY DEPTH OF ORGANISATIONAL FIT TS

RESEARCH MODEL (Hampson, 1993)
EXTERNAL ENVIRONMENT Industry Context EXPLORATORY STUDY TECHNOLOGY COMPETITIVE STRATEGY PERFORMANCE Independent Vble Dependent Variable DIMENSIONS OF TECHNOLOGY STRATEGY INDICATORS OF COMPETITIVE PERFORMANCE Technology Evolution EXTERNAL ENVIRONMENT

TS MEASUREMENT FRAMEWORK
5 DIMENSIONS 29 MEASURES Scope of Technology Strategy Competitive Positioning Sourcing of Technology Depth of Organizational Fit • Emphasis of tech in overall business strategy • ... • Acquisition of explicit technology • Breadth of technological capabilities • Emphasis on research and development • Depth of technical capabilities • Rewards systems - Head office

CP INDICATORS 4 CATEGORIES 14 INDICATORS Contract Award Growth
Market Share Growth Contract Value per Employee Weighted Average Performance Index 4 Absolute Value - $M/year 2 Proportional Growth - % 4 Absolute Growth - %/year 3 Productivity Indicators - $/person 1 Subjective Self-Assessed Index

Typical annual contract award data for bridge construction firm
TOTAL VALUE OF CONTRACTS AWARDED Year $0 $20M $40M $60M $80M $100M $120M Typical annual contract award data for bridge construction firm

RESEARCH FOCUSED ON BRIDGE CONSTRUCTION IN CALIFORNIA
Large and rapidly growing market Discrete market with highly focused firms Data available from Caltrans and firms Open competition Differentiation of technologies A. Minor Modifications and Repair - “Minor Mods” B. Routine New Alignment - “Blow and Go” C. Special Projects - “Heavy Engineering”

Example Use of Technology Strategy Measure
Dimension (d) Depth of Technology Strategy Measure (ii) Depth of technical capabilities - Head office technical management team Low Medium High

Level of Technical Qualification Rating
Doctorate Masters Degree 5 Bachelors Degree 4 Diploma - Military or Community College 3 Carpentry trade 2 Labor background 1

TS-CP EXAMPLE TS CP

Summary of results - TS-CP relationships
0 - VE 33 + VE 56 POSSIBLE RELATIONSHIPS NOTE: Analysis treats Rainbow as outlier

TECHNOLOGY STRATEGY AS A FUNCTIONAL STRATEGY
* Positioning * Sourcing * Depth * Scope * Organisation CONSTRUCTION BUSINESS MARKETING * PRODUCTION FINANCE HUMAN RESOURCE OPERATION AND MAINTENANCE FABRICATION DESIGN CORPORATE LEVEL STRATEGY LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM ( Adapted from Glueck, 1980 and Hampson, 1993)

TECHNOLOGY STRATEGY INTEGRAL WITH FUNCTIONAL STRATEGIES
integrated across all functions CONSTRUCTION BUSINESS STRATEGY MARKETING * PRODUCTION OPERATION AND MAINTENANCE FABRICATION DESIGN CORPORATE LEVEL STRATEGY FINANCE HUMAN RESOURCE LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM

INDUSTRY CONTEXT and STRATEGIC BEHAVIOUR

(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000) TECHNOLOGY STRATEGY EXPERIENCE TECHNICAL CAPABILITIES INTERNAL ENVIRONMENT GENERATIVE MECHANISMS INTEGRATIVE MECHANISMS EXTERNAL ENVIRONMENT BUSINESS EVOLUTION ORGANISATIONAL CONTEXT INDUSTRY Monitor, review, document and standardise

5 FORCES DRIVING INDUSTRY
COMPETITION ( Porter, 1980 ) INDUSTRY POTENTIAL ENTRANTS BUYERS SUBSTITUTES SUPPLIERS COMPETITORS Technology affects Competition!

CLARK (1989) Managers need to link the world of technology with the world of business.

ABELL (1980) Technology is one of the three basic dimensions of business definition customer groups customer functions, and technologies. This contrasts to the more traditional two-dimensional concept of product-market business strategy.

BURGELMAN AND ROSENBLOOM (1989)
Technology, from a competitive point of view, can be used in a defensive role, sustaining achieved advantage in differentiation or cost, or, offensively, as an instrument of expansion, to create new advantage in established lines of business

GENERIC STRATEGY

BUSINESS STRATEGY ALTERNATIVES
3 major generic strategies: Become the cost leader (supply the product or service at lowest feasible cost) Differentiate on basis important to customers (who will therefore prefer it to alternatives) Find a niche in the market and focus activities on the requirements of this niche

TECHNOLOGICAL POLICIES AND GENERIC COMPETITIVE STRATEGIES

MICHAEL PORTER’S MATRIX
Outstanding success Disaster Cost leadership Niche/focus 2 3 4 1 High DEGREE OF MARKETING DIFFERENTIATION Low High Low RELATIVE COSTS

Market /Technology Matrix
MARKETS TECHNOLOGIES Existing Expanded New MARKET/TECHNOLOGY MATRIX

The Strategic Management Process
(Source: Viljoen and Dann, 2000, p47)

LEADERSHIP VS FOLLOWERSHIP

TECHNOLOGICAL LEADERSHIP
High technological opportunity Unique technology skills First mover advantages Relatively continuous technological change Protection through patents

TECHNOLOGICAL FOLLOWERSHIP
Rapid changes in process technology or customer purchasing behaviour Technological discontinuities/uncertainty Irreversibility of investments Leadership externalities Dissemination of technological information through product inspection, reverse engineering, suppliers, customers, ex-employees.

DETERMINANTS OF THE LEADERSHIP - FOLLOWERSHIP CHOICE
Industry structural characteristics: opportunity to influence cost or differentiation the uniqueness of the firm’s technological skills first mover advantages the continuity of technological change rate of change in process technology or customer purchasing behaviour irreversibility of investments uncertainty, and leadership externalities.

LEADERSHIP EXTERNALITIES
Gaining regulatory approvals and code compliance Winning customers away from substitutes (marketing costs, penetration prices) Customer education on product usage Investments in infrastructure such as supply sources, machinery, training repair and service personnel Investments to improve the performance price or availability of complementary goods.

Technology Evaluation Matrix
Importance of technology in industry Technology leader Catch up or get out Technology adopter De-emphasise technology Leader Laggard Technology position of the firm in industry Operational Strategic

Paul Cook (FORMER FOUNDER AND CEO OF RAYCHEM CORPORATION - Taylor, 1990)
A different, and I think more powerful, way to compete is to avoid competition altogether. The best way to avoid competition is to sell products that rivals can’t touch. No partnership or joint venture can substitute for technology leadership.

TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP AND GENERIC STRATEGIES

TECHNOLOGICAL LEADERSHIP- FOLLOWERSHIP AND GENERIC STRATEGIES
Technological Followership Overall cost leadership First mover on lowest cost product or process technology. Lower cost of product or process through learning from leader’s experience. Overall differentiation First mover on unique product or process that enhances product performance or creates switching costs. Adapt product or delivery system more closely to market needs (or raise switching costs) by learning from leader’s experience. (Porter, 1983)

TECHNOLOGICAL CHANGE AND INNOVATION

TECHNOLOGY, INVENTION & INNOVATION
Innovation is the first application of the invention (a technology) in production (Link) 3 phases in the process of technological change: invention, innovation, and diffusion (Schumpeter) Inventive activity a new combination of available knowledge (Kuznets) Science focusses on: the understanding of knowledge Technology focusses on: the application of knowledge

INNOVATION “Innovation is described as the process of bringing any new problem-solving idea into use. Innovation is the generation, acceptance and implementation of new ideas, processes, products or services.” - Kanter, 1983, p20 Idea - Continuous Aim Firing “What one man could do partially and unconsciously, perhaps all men could be trained to do consciously and completely.”

TECHNOLOGICAL INNOVATION IS A COMPLEX ACTIVITY
Technological innovation is a process made up of diverse parts, varied participants, complicated patterns of evolution and information feedback loops. Research highlights the key role of people, as champions, inventor/entrepreneurs, or technology-familiar managers, in promoting and accelerating the implementation of innovation.

THE PRODUCT OR TECHNICAL CHAMPION
Innovation consists of two parts: new technology and a real or potential market. The product champion: convinces management that new product or process is feasible and worthy of significant investment. conceptualises a technical vehicle so the corporation can develop a new product or service. Sees relationship between scientific developments and market needs.

THE ORGANISATIONAL OR POLITICAL CHAMPION
Establishing and maintaining contact with top management, keeping them informed, and developing their enthusiasm for particular new activity Organisational champion is able to relate parameters and potential of new venture persuasively to ultimate goals of the corporations

TECHNOLOGICAL ADVANCE
Driven by the combination of chance or random events (variation), the direct social, political action of individuals and organisations in selecting between rival industry standards (selection), and the incremental, competence-enhancing, puzzle-solving actions of many organisations that are learned by doing (retention). (Anderson and Tushman, 1990, p606)

THE TECHNOLOGY CYCLE Era of Ferment Design competition Substitution
Era of Incremental Change Elaboration of dominant design TIME Technological Discontinuity 1 Discontinuity 2 Dominant Design 1 (Source: Anderson and Tushman, 1990, p606)

COMMON MISCONCEPTIONS ABOUT TECHNOLOGY 1/2

MISCONCEPTIONS (cont) 2/2

TECHNOLOGY MATURATION SEQUENCE (Arthur D. Little, 1981)
Ageing Mature TECHNICAL ADVANCE Growing Embryonic TIME

TECHNOLOGY MATURATION (Steele, 1989)
Natural Limit of Technology Era of Capital Intensity and Finance Domination TECHNICAL ADVANCE Era of Process Improvement and Manufacturing Domination Era of Product Innovation and Engineering Design Domination TIME

INDUSTRY MATURATION (Utterback, 1987)
Process Innovation NUMBER AND IMPACT OF IMPROVEMENTS Product Innovation TIME

INNOVATIONS MAP (Clark, 1985)
Niche Creation Architectural Regular Revolutionary Markets/Customer Linkages Production Systems Radical Conservative

IMPACT ON CAPABILITIES: PRODUCTION SYSTEMS Systems/Organisation Skills Materials/Suppliers Capital Knowledge/Experience Entrench Neutral Obsolete

IMPACT ON CAPABILITIES: MARKETS/CUSTOMERS Customer Base Customer Applications Channels of Distribution and Service Customer Knowledge Modes of Communication Entrench Neutral Create New

Production Systems Plot the location of the proposed technological change Niche Creation Architectural Radical Conservative Determine the management implications of the change Markets/Customer Linkages Regular Revolutionary

INNOVATION AND COMPETITION: IMPLICATIONS FOR MANAGEMENT
Revolutionary innovation requires focus on technical excellence disciplined by market realities, a focus on project management and dedication of resources to critical areas. Niche innovation requires highly responsive manufacturing, an aggressive and creative marketing organisation and high level of integration between them. Architectural innovation requires synthesis of science-based technical developments with insight into emerging worker needs. Regular innovation thrives where analysis is thorough and planning rigorous and disciplined.

TECHNOLOGICAL TRENDS and FORECASTING

WHAT IS TECHNOLOGICAL FORECASTING?
A technological forecast is a prediction of the future characteristics of useful machines, procedures, processes, or techniques.

TECHNOLOGICAL FORECASTING
Man cannot predict the future, but he can invent it. … ?? (Dennis Gabor, 1964) Technological forecasting aims at predicting long-term technological trends and other important environmental features. The description of prediction of foreseeable technological innovation, specific scientific refinement, or likely scientific discovery, that promises to serve some useful function, with some indication of the most probable time of occurrence.

TECHNOLOGICAL FORECAST HAS 4 ELEMENTS:
the technology being forecast the time of the forecast characteristics of technology concerned probabilities associated with the forecast.

FORECASTING IS AIMED AT IMPROVING THE QUALITY OF DECISION MAKING
by identifying limits a technology can go by establishing feasible rates of progress by defining alternatives

WE MAKE TECHNOLOGICAL FORECASTS TO:
maximise gain from events external to the organisation minimise loss associated with uncontrollable events external to the organisation offset the actions of competitive or hostile organisations forecast demand develop infrastructure plans and policies ie, maximise gain and minimise cost

INPUTS TO THE FORECASTING SYSTEM
Information from the past. Knowledge of the present. The ability of the human intellect: logical thought process insight, and judgment. ?

The Technology S - Curve
Limit of performance Time Parameter of Performance 1 2 3 1 Period of slow initial growth. 2 Rapid exponential growth. 3 Growth slows as performance approaches a natural physical limit asymptotically.

FORECAST FROM HISTORICAL DATA
Ultimate limit of capability Performance Time Today Forecast History

Lag Times for Automotive Innovations
2 4 6 8 10 12 14 16 Turbocharger Plastic Structural Parts Prestige - mass Demo - Prestige Plastic Body Shell Fuel Injection Electronic Ignition Electronic Engine Ctrl YEARS INNOVATION

Minimum Risk Policy for Possible Alternative Futures
Future A Future B Future C The Present R & D Policy 1 R & D Policy 2 Time T

Relevance Tree Pollution-free road transport Electric car
Piston-engined petrol car Wankel-engined petrol car Possible solutions Energy Source Motor Transmission Fuel cell Energised external source Internal Combustion A B C D K L P Q R V W X Y Z Projects Functions to be performed Possible solutions to functional need Specific research projects to solve particular problems Objective (Source: Twiss, 1982)

Forecasting the future is risky, but contemplating the future is the
first step to progress. A finished plan is useless, but its preparation is essential. (A slight misquotation of a very successful general)

FORECASTING EXAMPLE

FORECASTING The question should not be whether or not to forecast, but: To what extent is it necessary to forecast? Which are the most appropriate techniques, given the limitations of what can be afforded?

TECHNOLOGICAL FORECASTING ...
Innovation and Technology Management TECHNOLOGICAL FORECASTING ... Cannot enable decision maker to predict the future with certainty. But it can assist in refining judgments. Value of forecasts highly dependent upon quality of information and calibre of minds applied to it. The brush paints only as well as the painter’s hand can. Sophisticated forecasting techniques can only be aids, and care should be taken to guard against technological forecasting absorbing greater resources than can be justified in economic terms. Dr Keith Hampson, Construction Management and Property, Queensland University of Technology

ORGANISATIONAL CONTEXT: MANAGING THE TECHNICAL FUNCTION

ORGANISATIONAL CONTEXT OF TECHNOLOGY MANAGEMENT
Core Capabilities Staffing the Technical Function Personal characteristics Management challenges Organising for Innovation Organisational Learning

TECHNOLOGY AND APPROPRIATE MANAGEMENT
Often technology is applied at the enterprise level as a productivity driver without attention to the other attendant issues of organisation, competence and work force commitment. Consequently, the benefits of technology are curtailed. (Scott, 1994, p55)

People don’t resist technology - they resist the effects (or perceived effects) of technology

A FIRM'S CORE CAPABILITY
“The knowledge set that distinguishes and provides a competitive advantage.” It is the core capabilities that differentiate a company strategically. 4 dimensions to this knowledge set: employee knowledge and skills technical systems managerial systems values and norms Leonard-Barton (1992, 113)

ABSORPTIVE CAPACITY The ability of an organisation to recognise the value of new information, assimilate it, and apply it to commercial ends. Possession of relevant knowledge and skills of individuals gives rise to creativity, problem-solving skills and technological linkages that may have never been considered before. (Cohen and Leventhal, 1990)

Effective Technology Monitoring
Product and Equipment Vendors Owners/Clients Customers/Tenants Universities Research Centres Consultants (Upstream & Downstream) Publications (Academic, Associations, Industry and Generic) Conferences/Seminars/Education Interest Groups

FIRMS CAN BE MORE PROACTIVE
Chance favours the prepared mind (Steven Seagal in Under Siege II) … Be prepared! (Lord Baden Powell)

“EXCELLENCE NEVER ACCIDENT”
is NEVER an ACCIDENT”

EFFECTIVE INITIATORS OF CHANGE (Rosabeth Moss Kanter 1982)
Characteristics of Innovative Middle Managers Desire for change - tolerance for uncertainty Foresight, vision, clarity of direction Thoroughness - complete preparation Political astuteness Participative management style Persuasive Pushes to the limits of his/her discretion Persistence.

3 PHASES OF AN INNOVATION LED BY A CORPORATE ENTREPRENEUR (Kanter, 1983)
1. Problem Definition - Gaining and applying information to shape a feasible project - Listening to managers, staff, suppliers, customers - Seeking political information - Obtaining data to demonstrate need 2. Coalition Building - Clearing the resistance with bosses - Preselling and making “cheer leaders” - Horse Trading with other staff, managers and departments - Securing the blessing of higher level officials - Formalising the coalition. 3. Mobilisation and Completion - Handling opposition and blocking interference - Maintaining momentum with team building - Secondary redesign by bending or breaking rules and systems - External communication - managing the press - Delivering on promises.

ENTREPRENEURIAL ATTRIBUTES (Timmons, 1989)
(a) Total commitment, determination and perseverance (b) Drive to achieve and grow (c) Opportunity and goal oriented (d) Taking initiative and personal responsibility (e) Persistent problem solving (f) Veridical (truthful) awareness and a sense of humour (g) Seeking and using feedback (h) Internal locus of control (i) Tolerance for ambiguity (j) Calculated risk-taking and sharing (k) Low need for status and power (l) Integrity and reliability (m) Decisiveness, urgency and patience - in balance (n) Dealing with failure (o) Team builder and hero maker.

If I had thought about it, I wouldn't have done the experiment
If I had thought about it, I wouldn't have done the experiment. The literature was full of examples that said you can't do this. Spencer Silver The originator of Post-it Notepads

Paul Cook, founder and former CEO of Raychem Corporation
INNOVATIVE PEOPLE You can train people technically, but you can't teach them curiosity. The desire to innovate comes partly from the genes you're born with it. It also comes from your early life, your education, the kind of encouragement you got to be creative and original. Innovative people come in all shapes and sizes and in all personality types Paul Cook, founder and former CEO of Raychem Corporation

Paul Cook, founder and former CEO of Raychem Corporation
FINDING THE RIGHT PEOPLE … people who genuinely want to serve the customer, who want to build products superior to anything that's come before, who are willing to stick their necks out to do new things. That means learning how their minds work, what they think about, what excites them, how they approach problems. The person who can combine deep knowledge of the technology with deep knowledge of the customer is the rarest person of all—and the most important person in the process of innovation Paul Cook, founder and former CEO of Raychem Corporation

INTRAPRENEUR’S TEN COMMANDMENTS (Pinchot, 1985)
1. Come to work each day willing to be fired 2. Circumvent any orders aimed at stopping your dream 3. Do any job to make your project work, regardless of your job description 4. Find people to help you 5. Follow your intuition about the people you choose, work only with the best 6. Work underground as long as you can - publicity triggers the corporate immune mechanism 7. Never bet on a race unless you are running in it 8. Remember it is easier to ask for forgiveness than for permission 9. Be true to your goals, but be realistic about the ways to achieve them 10. Honour your sponsors

MANAGEMENT STYLE FOR INNOVATION
Strong association between innovation and participative-collaborative management style: Persuading more than ordering, though managers may use pressure as a last resort. Building a team with frequent staff meetings and considerable sharing of information. Seeking inputs from others - asking for ideas, soliciting suggestions, welcoming peer review. Acknowledging others' stake or potential stake in the project - being politically sensitive. Sharing rewards and recognition willingly.

REMEMBER ‘MACHIAVELLI’S ASYMMETRY’
The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new. ‘Burgelman’s Paradox of Corporate Culture’: Even a corporate culture oriented toward innovation is somewhat resistant to change.

BUILDING OWNERSHIP Having a voice in 5 critical features of the project planning and management process: Providing opportunities to help shape project. Allowing time for team members to build ownership. Setting acceptable and reasonable priorities. Defining project objectives that continue to be regarded as attainable as work progresses. Creating appropriate rewards and penalties.

Team Development Storming Performing Forming Norming
(Montebello, Work Teams that Work; Skill for Managing Across the Organisation, 1995) Building Strong Relationships Managing Productive Meetings Promoting Open Communication Making Rational Decisions Managing Conflict & Disruption Storming Performing Forming Norming High Low Getting Things Done Direction, Structure and Organisation

MEASUREMENT AND REWARD
Systems must reflect the importance associated with technology development What gets measured, gets done The most important factor is individual recognition - more important than salaries, bonuses, or promotions. We don’t just reward success; we reward intelligent effort. We’ve paid sizeable bonuses to people who have worked day and night, with remarkable proficiency, on a year-long project - only to find the market had disappeared. (Cook, in Taylor, 1990)

PROJECT MANAGEMENT Functional Project Management (serial)
tossing the bear over the wall Multifunctional Project Management (parallel) identify all of skills and resources required for project completion. Skills are assembled, or committed, at the outset, and the project manager’s responsibility is to complete all phases of the project—not to hand it off to some other group at some predetermined point.

SEQUENTIAL DEVELOPMENT PROCESS
Marketing Design Engineers Process Engineers Manufacturing Marketing

PARALLEL DEVELOPMENT PROCESS
Design Engineers Process Engineers Manufacturing Marketing Problem Definition Product Handover

TRADITIONAL BUILDING PROCUREMENT
(Turner 1990, p49)

IMPORTANCE OF MANAGING EARLY PROJECT PHASES
Ability to influence Performance/Results Cost to Change Initiation & Concept Project Planning & Design Procurement & Construction Completion & Handover Time

A RIGHT ROYAL QUOTE! HRH the Duke of Edinburgh:
The first problem is to define the problem (Turner, 1990, p16).

ORGANISATIONAL LEARNING
Learning and unlearning (Burgelman & Maidique, 1988) Learning by doing (Arrow, 1962) Learning by using (Rosenberg, 1982) Learning by failing (Maidique & Zirger, 1988)

The illiterate of the eighties was the person
who could not read or write … The illiterate of the nineties is the person who cannot learn, unlearn, and relearn. Alvin Toffler

EVOLUTIONARY PROCESS OF STRATEGY MAKING IN ESTABLISHED FIRMS
Burgelman's (1983) research centred on Internal Corporate Venturing (ICV) process in a major diversified high-technology manufacturing firm. Examined relationship between project development and business development within the firm. Found that interaction of entrepreneurial activities of middle managers produced corporate entrepreneurship. Organisational forces at corporate level also influenced entrepreneurial activities of individuals.

EVOLUTIONARY STRATEGY MAKING PROCESS IN ESTABLISHED FIRMS
Autonomous Strategic Behaviour Context Structural Induced Concept of Corporate Strategy (Source: Burgelman, 1983)

ORGANISATION DESIGNS FOR CORPORATE ENTREPRENEURSHIP
Design alternatives 3. Special Business Units 6. Independent Business Units 9. Complete Spin-off UNRELATED PARTLY RELATED 2. New Product/ Business Dept 5. New Venture Division 8. Contracting OPERATIONAL RELATEDNESS 1. Direct Integration 4. “Micro” New Ventures Dept 7. Nurturing and Contracting STRONGLY RELATED VERY IMPORTANT UNCERTAIN NOT IMPORTANT STRATEGIC IMPORTANCE (Burgelman, 1984)

TECHNOLOGY STRATEGY AS A FUNCTIONAL STRATEGY
( Adapted from Glueck, 1980 and Hampson, 1993) LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM TECHNOLOGY STRATEGY * Positioning * Sourcing * Depth * Scope * Organisation CONSTRUCTION BUSINESS MARKETING * PRODUCTION FINANCE HUMAN RESOURCE OPERATION AND MAINTENANCE FABRICATION DESIGN CORPORATE LEVEL STRATEGY

TECHNOLOGY STRATEGY INTEGRAL WITH FUNCTIONAL STRATEGIES
CORPORATE LEVEL STRATEGY CONSTRUCTION BUSINESS STRATEGY DESIGN BUSINESS STRATEGY FABRICATION BUSINESS STRATEGY OPERATION AND MAINTENANCE BUSINESS STRATEGY Technology Strategy integrated across all functions FINANCE STRATEGY * HUMAN RESOURCE STRATEGY PRODUCTION STRATEGY * MARKETING STRATEGY * * * * * LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM

(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000) TECHNOLOGY STRATEGY EXPERIENCE TECHNICAL CAPABILITIES INTERNAL ENVIRONMENT GENERATIVE MECHANISMS INTEGRATIVE MECHANISMS EXTERNAL ENVIRONMENT BUSINESS EVOLUTION ORGANISATIONAL CONTEXT INDUSTRY Monitor, review, document and standardise

TECHNOLOGY STRATEGY FORMULATION (Porter, 1985)
1. Identify all distinct technologies and sub-technologies in value chain. 2. Identify potentially relevant technologies in other industries or under scientific development. 3. Determine the likely path of change of key technologies. 4. Determine which technologies and potential technological changes are most significant for competitive advantage and industry structure. 5. Assess a firm's relative capabilities in important technologies and the cost of making improvements. 6. Select a technology strategy, encompassing all important technologies, that reinforces the firm's overall competitive strategy. 7. Reinforce business unit technology strategies at the corporate level.

FUTURE TRENDS and CONCLUSIONS

FUTURE TRENDS (Steele, 1989)
A relentless shift from selling tools, which customers use to solve problems, to selling solutions based on specific knowledge of customers’ needs and customised responses to those needs. Global markets, global competition, and global operations must become the starting point for all management planning.

FUTURE TRENDS (Cook in Taylor, 1990)
Intellectual property is key Must develop a critical mass of different skills. For a small company this means focussing on one core technology For a large company taking advantage of the technology scale and scope to push frontiers of adopted technology. Innovation is a global game today - both on the supply side and on the demand side. Multi-disciplinary and multi-national teams working together are seen to produce the best global solutions.

Central to the advancement of human civilization is the spirit of open enquiry. We must learn not only to tolerate our differences, we must welcome them as the richness and diversity which can lead to true intelligence Albert Einstein

Responsibilities of upper management:
BUSINESS STRATEGIES FOR THE FUTURE (Construction Industry Institute, 1992) Responsibilities of upper management: provide a working environment that stimulates innovation and caters to needs of employees developing organisationally to allow quick movements into or out of markets concentrating more on being a salesperson to clients, with less emphasis on merely managing subordinates and more emphasis on single point responsibility for projects

Managers need to link the world of technology with the world of business (Clark, 1989)
… And partnerships between participants is likely to provide the best solutions.

THE R&D EFFORT PORTFOLIO
OPPORTUNITY TECHNICAL MARKET OPPORTUNITY High Moderate Low Selective Emphasis Limited Support Heavy

Dynamics of organisational change
LEVEL OF LEARNING REQUIRED Culture Strategy Structure Procedures Skills Years Months Weeks Small Large MAGNITUDE OF CHANGE TIME TO ADJUST (Adler & Shenbar, 1990)

“Change is a whole lot easier to make when you’re the change artist”

Francis Bacon from Essay on Innovations (1625)
They that will not apply new remedies must expect new evils; for time is the greatest innovator Francis Bacon from Essay on Innovations (1625)

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One machine can do the work of fifty ordinary men
One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man. Elbert Hubbard, author, editor, printer ( )

Innovation and Technology Management

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