Icos Seminar Unedited

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Icos Seminar Unedited

  1. 1. Innovation Streams and Ambidextrous Designs: On Building Dynamic Capabilities Michael Tushman Wendy Smith George Westerman Robert Wood Charles O’Reilly
  2. 2. Research Question: What are the Strategic, Organizational, and Senior Team Roots of Dynamic Capabilities?
  3. 3. Building Dynamic Capabilities is Difficult? (Wiggins and Ruefli, 2002) IBM(1993-2004) Firestone NCR Kodak Kuhn Loeb Boeing SSIH/Asaug Bausch & Lomb Philips Sears U.S.Steel Levi Strauss Kidder Peabody Oxford Health Polaroid Ciba-Geigy Intertype/Varityper DEC
  4. 4. Worldwide Watch Production 1955 1977 1978 1979 1980 1982 1985 2,316 1,021 979 867 861 730 600 70,026 54,825 52,669 46,716 46,998 38,200 32,000 1945 1950 1960 1965 1970 1975 1976 Year 1,863 2,167 1,927 1,618 1,169 1,083 Number of Firms 80,000 60,239 74,216 83,922 89,448 62,567 55,182 Employees Number of Firms and Workers in the Swiss Watch Industry, 1950-1985 2,500
  5. 5. Sources: Rubber Manufacturers Association, “Tire Shipments by Construction,” Tire Industry Facts (Akron, Ohio, 1990); Firestone Tire & Rubber Company, “Sales Forecasts,” Corporate Archives (Akron, Ohio, 1980). Citation: Sull, Donald. “The Dynamics of Standing Still: Firestone Tire & Rubber and the Radial Revolution,” Business History Review , 1999, pp. 430-464. Percentage of Tires Shipped by Construction Type: 1961-1989
  6. 6. 1976 1981 1986 1991 1996 14” 8” 5.25” 3.5” 2.5” Control Data, IBM, Memorex, Diablo, DEC, Ampex Shugart, Micropolis, Priam, Quantum Seagate, Miniscribe, Maxtor, Micropolis, Computer Memories Conner, Quantum, Maxtor, Western Digital, Seagate Prairietek, Quantum, Conner, Western Digital Market Size Disk Drive Industry Evolution 146 firms founded; 125 failures
  7. 7. Henderson and Clark, ASQ , 1990. – Photolithography Industry – Contact aligners (Cobuilt, Kasper) – Proximity aligners (Canon) – Scanners (Perkin-Elmer) – Steppers – 2nd generation steppers (Nikon) – Subsystems and linkage mechanisms light lens alignment system mechanical system
  8. 8. Dynamic Capabilities and Innovation Streams <ul><li>Innovation Streams </li></ul><ul><li>Incremental change with existing product </li></ul><ul><li>Non-incremental defined by change in </li></ul><ul><ul><li>technology </li></ul></ul><ul><ul><li>markets </li></ul></ul>Markets Current Customers New Customers Emerging Market Incremental Innovation Architectural Innovation Discontinuous Innovation Existing Conventional Lens Solution Innovation Daily Disposible Extended Wear Process Innovation Technology Innovation Pharmaceutical (Visudyne) Innovation Fashion Lenses CIBA VISION
  9. 9. The Challenge : March (1991), Levinthal (1997): Explore and Exploit Weick (1979): Learn and unlearn, hypocritical Thompson (1967): efficiency and flexibility Abernathy (1978): productivity dilemma
  10. 10. The Response : Ecology/Selection: Spin-outs (Christensen, 1997; Baghai et al, 1999) ICV, New Business Groups, Skunkworks (Van de Ven, 1999; Burgelman, 2002) Contingency and Punctuated Change: Romanelli and Tushman (1994) Siggelkow (2001) Miller (1990) Switch Between Modes: Louis and Sutton (1989) Duncan (1976)- initiation vs implementation Brown and Eisenhardt (1998)-loose and tight semistructures linked in time, incremental change, choreographed transitions, edge of chaos
  11. 11. Plural, Dual, or Ambidextrous Designs: Explore and Exploit Tushman and O’Reilly (1997), Nonaka (1988), Bradach (1998), Adler et al (1999), Sutcliffe et al (2000) High Structural Differentiation: Intra Unit Contradictions Limited/Tactical Structural Integration Strong Senior Team Integration Not switch back and forth, but simultaneous exploit and explore Not spin out, ICV, but internally contradictory architectures Not semi structures, but ambidextrous designs Not induced and autonomous, but strategic innovation Not incremental or punctuated, but both
  12. 12. On Innovation Streams and Dynamic Capabilities
  13. 13. Products/Services As Systems: Subsystems and Linking Mechanisms 1860 1950s 1970 1980 Spring Battery Battery Battery Battery Escapement Escapement Tuning Fork Quartz Quartz Gears Gears Gears Gears Electronics Analog Analog Analog Analog Digital Gold Gold Gold/Plastic Gold Plastic Energy Oscillation Linkage Face Case Subsystems Subsystems: Core and Peripheral
  14. 14. Henderson and Clark, ASQ , 1990. – Photolithography Industry – Contact aligners (Cobuilt, Kasper) – Proximity aligners (Canon) – Scanners (Perkin-Elmer) – Steppers – 2nd generation steppers (Nikon) – Subsystems and linage mechanisms light lens alignment system mechanical system Fan Small Copiers Small Radio Contact Aligners Proximity Aligners Architectural innovation
  15. 15. Rosenbloom and Christensen. Industrial and Corporate Change , 1994. Disk drives industry: 14”, 8”…3.5” (Winchester, Seagate, Conner) “ Issue in disk drives may be relative abilities of incumbents to change strategies (value networks), not technologies.” Markets Technology New Existing Incremental Discontinuous Disk Drives (8”… 3.5”) 14 ’’ Architectural
  16. 16. Innovation Streams and Dynamic Capabilities New Existing Markets Incremental Architectural Discontinuous CD/Core NCA/Core <ul><li>Dynamic Capabilities Rooted in Innovation Streams . </li></ul>Types of Innovation Flat Bed Scanner Conventional lens USAToday Bias Ply Tires Contact Aligner Mechanical Watch IBM Micro: ASIC Proximity Aligner HP/Wanda Fashion Lens 8” Disk Drives IBM Micro: Network, Imaging Radial Tires Disposable Lens Extended Wear Lens USAT.com Quartz Watch Vysodyne HP/Zorro
  17. 17. Organizational Architectures & Innovation Streams: Multiple Selection Environments Selection Exploration: Variation General Managers and Senior Team mfg./sales competencies tight/formal organization arrangements tight culture tight processes R&D/entrepr. competencies loose culture loose processes loose organization arrangements Exploitation: Retention
  18. 18. Ciba Vision / Vysodyne, Daily Disposables Seiko/Quartz USAToday.com IBM Network Tech/Transport HP Scanner/Zorro Tasks Organization Arrangements Individuals Informal Mgmt. Team Mgmt. Team Tasks Organization Arrangements Individuals Informal Mgmt. Team Strategic Re-orientations, Discontinuous Change Executive Team Multiple strategies Single vision Few Core Values Exploration : Multiple failures, experiments, variants Ciba Vision/Conv. Lens, Seiko/Mechanical, USAToday IBM Network/ ASIC HP Flat Bed Scanner Exploitation : Consistency, incremental change, and continuous improvements Ambidextrous Designs, Innovation Streams and Dynamic Capabilities
  19. 19. Ambidextrous Design J. Kelley (Meta Manager) Group Executive Mfg. Chris King (Ambidextrous Manger) Network Technologies ASIC (Exploitation) Network (Innovation Manger) Transport (Innovation Manger) Senior Team Tactical Integration Exploration Wireless
  20. 20. Methods <ul><li>Research Design </li></ul><ul><li>Multi Case Design (Van de Ven, 1999; Brown and Eisenhardt, 1997) </li></ul><ul><li>Chose Sites Based on Innovation Streams </li></ul><ul><li>Business Unit as Level of Analysis </li></ul><ul><li>Longitudinal Data (Lewin et al, 1999) </li></ul><ul><li>Sample </li></ul><ul><li>15 Business Units (9 Industries) </li></ul><ul><li>24 non-incremental innovations </li></ul><ul><li>36 Innovation Episodes </li></ul><ul><li>7 Business Units with multiple non-incremental innovations </li></ul><ul><li>11 innovations with multiple innovation- episodes </li></ul><ul><ul><ul><li>5 out of 6 types of non-incremental innovation </li></ul></ul></ul><ul><li>Data Collection </li></ul><ul><li>6-12 Interviews per firm (106 in all): open ended and targeted </li></ul><ul><li>Mini-cases </li></ul><ul><li>5 coders independently coding </li></ul><ul><ul><ul><li>differentiation (distinct unit, physical location, culture, rewards, competencies)   .92 </li></ul></ul></ul><ul><ul><ul><li>strategic integration (general manager support, relationship, on senior team)   .91 </li></ul></ul></ul><ul><ul><ul><li>innovation performance (technical, market, and commercial)   .86 </li></ul></ul></ul>
  21. 24. Results: Innovation Streams Non-Incremental Technological Change <ul><li>RESULTS </li></ul><ul><li>Innovation Streams exist </li></ul><ul><li>No performance difference by: </li></ul><ul><ul><li>technology (t=.87, ns) </li></ul></ul><ul><ul><li>markets (F=2.14, ns) </li></ul></ul>Software Co: E-Learning Regional News: City Search.com HP Scanner: Handheld Scanner B, C Regional News: News.com A, B USA Today: USAT.com A Ciba Vision: Visudyne A, B Firestone: Radial Tires Goodyear: Radial Tires BF Goodrich: Radial Tires UtilityCo: On Site Power Plants Ciba Vision: Extended Wear Ciba Vision: Daily Disposable IBM Middleware: Websphere Medical Imaging: Color Ultrasound Medical Products: Integrated Healthcare System HP Scanner: Handheld Scanner A Turner Technology: Imaging Chip A, B Micro Display Chip A, B IBM Network Technology: Network Chip A, B Transport Chip A, B Incremental Architectural Discontinuous Current Customers New Customers Emerging Market USA Today: Direct A, B USA Today: USAT.com B Software Co: Knowledge Management Software Co: Advanced Collaboration Polaroid: Helios A, B Polaroid: Digital Camera A, B Polaroid: Analog Camera Software Co: ICE IBM Software: COBOL Med. Imaging: B&W Ultrasound UtilityCo: Power Plants Ciba Vision: Conventional Lens IBM Network Tech: ASIC Turner Technology: ASIC Goodyear: Bias Ply Tires Firestone: Bias Ply Tires BF Goodrich: Bias Ply Tires Regional News: Newspaper HP Scanners: Flatbed Scanners USA Today: Newspaper Med. Product: Medical Devices Target Market
  22. 25. Innovation performance by number of non-incremental innovations RESULTS No difference in performance by number of innovations in innovation stream: One vs. Multiple (t= .21, n.s.)
  23. 26. Results: Does Ambidexterity Exist? HP Scanners: Handheld Scanner B USA Today: USAT.com B USA Today: Direct B Regional News: City Search.com Regional News: News.com A Turner Technology: Micro Display A Turner Technology: Imaging B IBM Middleware: Websphere UtilityCo: Power Plants IBM Network Tech: Network Chip B IBM Network Tech: Transport Chip B CIBA Vision: Extended Wear CIBA Vision: Daily Disposable CIBA Vision: Visudyne A Polaroid: Helios B Structural Differentiation LOW HIGH Senior Team Integration LOW HIGH Cross-Functional Teams HP Scanners: Handheld Scanner A Regional News: News.com B Turner Technology: Micro Display A Turner Technology: Imaging A Firestone: Radial Tires BF Goodrich: Radial Tires Software Co: E-Learning Software Co: Knowledge Management Software Co: Advanced Collaboration USA Today: USAT.com A Polaroid: Digital Cameras B USA Today: Direct A HP Scanners: Handheld Scanner C Medical Imaging: Color Ultrasound Goodyear: Radial Tires IBM Network Tech: Network Chip A IBM Network Tech: Transport Chip A Medical Products: Integrated Health Care System Polaroid: Helios A Polaroid: Digital Cameras A N=9 Unsupported Teams Functional Design Ambidextrous Design N=7 N=4 N=15
  24. 27. Characteristics of Ambidexterity J. Kelley (Meta Manager) Group Executive Mfg. Chris King (Ambidextrous Manger) Network Technologies ASIC (Exploitation) Network (Innovation Manger) Transport (Innovation Manger) Senior Team Tactical Integration Exploration Wireless <ul><li>Characteristics of </li></ul><ul><li>Ambidextrous Forms </li></ul><ul><li>Structural differentiation of explore/exploit units </li></ul><ul><li>Integration at senior team level </li></ul><ul><li>Investment by ‘Meta Manager’ </li></ul><ul><li>Targeted integration of functional resources </li></ul><ul><li>Common fate rewards system </li></ul><ul><li>Overarching vision of senior team including both explore and exploit </li></ul><ul><li>IM internal/external, staff external </li></ul>VISION: # 1 Supplier of Network Technology chips by 2000
  25. 28. Table 4: Characteristics of Ambidextrous Organizational Forms Healthy Eyes for Life Inside Inside Inside Yes Yes Yes GM & Head of R&D / Inside Ciba Vision Extended Wear Daily Disposable Visudyne (A) A value creating, respected public utility Outside Yes GM / Outside <ul><li>Utility Co. </li></ul><ul><ul><li>On-Site Power Plant </li></ul></ul>“ Beat BEA” Inside Yes GM / Inside IBM Middleware Web Middleware #1 supplier of Network Tech by 2000 Outside Outside Yes Yes GM / Inside <ul><li>IBM Network Tech </li></ul><ul><ul><li>Network (B) </li></ul></ul><ul><ul><li>Transport (B) </li></ul></ul>Be in top 10 manufacturers of semiconductors within 3 years Inside Inside Yes Yes GM / Outside Turner Technology Micro (B) Imaging (B) Primary information source for city Outside Outside Yes Yes Publisher / Inside Regional News City Search.com News.com (A) Local paper for global village Inside Outside Yes Yes GM / Inside USA Today .Com (B) Direct (B) NONE Inside Yes GM / Outside HP Scanner Handheld (B) Overarching Aspiration Innovation Manager 1 Distinct Unit Ambidextrous Manager 1 None Outside Yes CEO / Inside <ul><li>Polaroid </li></ul><ul><ul><li>Helios (B) </li></ul></ul>Yes Yes Yes Yes No Yes Yes No Yes Yes No Yes Yes Yes Innovation Manager on Sr. Team Yes R&D / Mkt. Marketing Software R&D Mfg./ Sales Mfg. HR/Finance Editorial Advertising Editorial MIS/HR/ Finance Targeted Structural Integration Sales Joint / Common Fate Company based stock options Common team Incentives Joint Common Fate No Data Individual Incentive and Joint Bonus Joint Bonus / Common Fate Joint Bonus Senior Team Incentives No Data YES YES YES YES YES N/A NONE YES Meta Manager N/A 1 Inside & Outside refers to whether the manager came from inside or outside the business unit.
  26. 29. Figure 1: Innovation Space Software Co: E-Learning Regional News: City Search.com HP Scanner: Handheld Scanner B , C Regional News: News.com A , B USA Today: USAT.com A Ciba Vision: Visudyne A , B Firestone: Radial Tires BF Goodrich: Radial Tires UtilityCo: On Site Power Plants Ciba Vision: Extended Wear Ciba Vision: Daily Disposable [ Goodyear: Radial Tires ] IBM Middleware: Web Based Middleware Medical Products: Integrated Healthcare System [ Medical Imaging: Color Ultrasound ] HP Scanner: Handheld Scanner A Turner Technologies: Imaging Chip A, B Micro Display Chip A, B IBM Network Technology: Network Chip A, B Transport Chip A, B Incremental Architectural Discontinuous Non-Incremental Existing Market New Customers / Defined Market Emerging Market USA Today: Direct A, B USA Today: USAT.com B Software Co: Knowledge Management Software Co: Advanced Collaboration Polaroid: Helios A, B Polaroid: Digital Camera A, B IBM Network Tech: ASIC HP Scanners: Flatbed Scanners Ciba Vision: Conventional Lens Polaroid: Analog Camera Software Co: Integrated Collab. IBM Middleware: Cobol / Cics UtilityCo: Power Plants Turner Tech: ASIC Firestone: Bias Ply Tires BF Goodrich: Bias Ply Tires Regional News: Newspaper USA Today: Newspaper Med. Product: Medical Devices [ Med. Imaging: B&W Ultrasound ] [ Goodyear: Bias Ply Tires ] NOTE: Ambidextrous Designs are in Bold Product Substitutions are in [ ] Target Market Technological Change
  27. 30. Design Choices and Innovation Outcomes HP Scanners: Handheld Scanner B USA Today: USAT.com B USA Today: Direct B Regional News: City Search.com Regional News: News.com A Turner Technology: Micro Display A Turner Technology: Imaging B IBM Middleware: Websphere UtilityCo: Power Plants IBM Network Tech: Network Chip B IBM Network Tech: Transport Chip B CIBA Vision: Extended Wear CIBA Vision: Daily Disposable CIBA Vision: Visudyne A Polaroid: Helios B Structural Differentiation LOW HIGH Senior Team Integration LOW HIGH Cross-Functional Teams HP Scanners: Handheld Scanner A Regional News: News.com B Turner Technology: Micro Display A Turner Technology: Imaging A Firestone: Radial Tires BF Goodrich: Radial Tires Software Co: E-Learning Software Co: Knowledge Management Software Co: Advanced Collaboration USA Today: USAT.com A Polaroid: Digital Cameras B USA Today: Direct A HP Scanners: Handheld Scanner C Medical Imaging: Color Ultrasound Goodyear: Radial Tires IBM Network Tech: Network Chip A IBM Network Tech: Transport Chip A Medical Products: Integrated Health Care System Polaroid: Helios A Polaroid: Digital Cameras A N=9 Innovation Performance = 2.27 Unsupported Teams Functional Design Ambidextrous Design N=7 Innovation Performance = 3.12 N=4 Innovation Performance = 2.52 N=15 Innovation Performance = 4.27 <ul><li>RESULTS </li></ul><ul><li>Ambidextrous designs more effective than other designs: </li></ul><ul><ul><li>Main Effect of Senior Team Integration </li></ul></ul><ul><ul><li>(F = 14.11, p < .01) </li></ul></ul><ul><ul><li>Main Effect of Differentiation </li></ul></ul><ul><ul><li>(F = 18.67; p < .01) </li></ul></ul><ul><ul><li>No interaction Effect </li></ul></ul><ul><li>Other forms not employed: </li></ul><ul><ul><li>No skunkworks, VC firms, spin outs </li></ul></ul>
  28. 31. Designs Shift Over Time Structural Differentiation LOW HIGH Senior Team Integration LOW HIGH Cross-Functional Teams USA Today: USAT.com A Polaroid: Digital Cameras B USA Today: Direct A HP Scanners: Handheld Scanner C Unsupported Teams Functional Design AMBIDEXTROUS Design Medical Imaging: Color Ultrasound Goodyear: Radial Tires IBM Network Tech: Network Chip A IBM Network Tech: Transport Chip A Medical Products: Integrated Health Care System Polaroid: Helios A Polaroid: Digital Cameras A HP Scanners: Handheld Scanner B USA Today: USAT.com B USA Today: Direct B Regional News: City Search.com Regional News: News.com A Turner Technology: Micro Display A Turner Technology: Imaging B IBM Middleware: Websphere UtilityCo: Power Plants IBM Network Tech: Network Chip B IBM Network Tech: Transport Chip B CIBA Vision: Extended Wear CIBA Vision: Daily Disposable CIBA Vision: Visudyne A Polaroid: Helios B <ul><li>RESULTS </li></ul><ul><li>Net migration of designs over time to ambidextrous designs </li></ul><ul><ul><li>6 move to ambidextrous form </li></ul></ul><ul><ul><li>3 move out of ambidextrous form </li></ul></ul><ul><li>Net performance improvement for designs migrating to ambidextrous form: </li></ul><ul><ul><li>(t =5.67, p<.03)* </li></ul></ul><ul><ul><li>IBM Network Technology. </li></ul></ul><ul><ul><li>* Note: Small sample size </li></ul></ul>SPIN OUT Novartis Pharma Div: Visudyne B HP Scanners: Handheld Scanner A Regional News: News.com B Turner Technology: Micro Display A Turner Technology: Imaging A Firestone: Radial Tires BF Goodrich: Radial Tires Software Co: E-Learning Software Co: Knowledge Management Software Co: Advanced Collaboration
  29. 33. Organization Designs Over Time: HP Greeley, HP Microelectronics Toronto Star IBM Network Technology Meta Manager (eg Kelly at IBM Microelectronics, Bradley at Ciba Vision) Boundary Conditions: Product Substitution (Goodyear, HP Medical) Spin Outs: HP Handheld Scanner C Ciba Vision, Vysodyne (B)
  30. 34. Table 7: Existing Product Performance by Organization Form <ul><li>HP Scanner: Handheld Scanner (B) </li></ul><ul><li>Turner Technologies : Micro Display (B), Imaging (B) </li></ul><ul><li>CIBA Vision: Extended Wear, Daily Disposable, & Visudyne (A) </li></ul><ul><li>IBM Middleware: Web Based Middleware </li></ul><ul><li>IBM Network Tech: Network Chip (B), Transport Chip (B) </li></ul><ul><li>HP Scanner: Handheld Scanner (C) </li></ul>Ambidextrous Design Non-Ambidextrous Design Fisher’s Exact Test, p = .05 <ul><li>Regional News: News.com (A), City Search.com </li></ul><ul><li>USA Today: USAT.com (B), Direct (B) </li></ul><ul><li>UtilityCo: On-Site Power Plants </li></ul><ul><li>HP Scanner: Handheld Scanner (A) </li></ul><ul><li>Regional News: News.com (B) </li></ul><ul><li>Medical Products: Integrated Health Care System </li></ul><ul><li>Polaroid: Helios (A), Digital Cameras (A) </li></ul><ul><li>Declining </li></ul><ul><li>Polaroid: Helios (B) </li></ul><ul><li>Turner Technologies : Micro Display (A), Imaging (A) </li></ul><ul><li>USA Today: USAT.com (A), Direct (A) </li></ul><ul><li>IBM Network Tech: Transport Chip (A), Network Chip (A) </li></ul><ul><li>Software Co: Adv. Collab., Knowledge Mgmt., E-Learning </li></ul><ul><li>Firestone: Radial Tires </li></ul><ul><li>BF Goodrich: Radial Tires </li></ul><ul><li>Polaroid: Digital Cameras (B) </li></ul>7 1 Improving or Steady 13 8 21 12 9 Total 5 8
  31. 35. <ul><li>Multiple Inconsistent Alignments </li></ul><ul><ul><li>– Structure – Culture – Process </li></ul></ul><ul><ul><li>– Competencies – Physical Location </li></ul></ul><ul><li>Tactical Integration ( eg USAT editorial meetings ) </li></ul><ul><li>Strategic Integration </li></ul><ul><ul><li>Integration at General Manager level </li></ul></ul><ul><ul><li>Ambidextrous Senior Teams and common fate </li></ul></ul><ul><ul><li>Consequences of strategic integration being too high or too low. </li></ul></ul><ul><ul><li>GM Too High Too Low </li></ul></ul><ul><ul><li>Ciba Vision/Disp HP/Handheld(C) HP/Handheld(A) </li></ul></ul><ul><ul><li>USAT.com USAT/Live(A) Ancona/Polaroid </li></ul></ul><ul><ul><li>HP/Handheld (B) Software Co./e Learn </li></ul></ul><ul><ul><li>Toronto Star (A) Regional News (B) </li></ul></ul>Ambidextrous Organizations
  32. 36. Executive Teams, Innovation Streams and Strategic Reorientations <ul><li>Executive Team </li></ul><ul><ul><li>Challenging, emotionally engaging (yet equivocal) vision </li></ul></ul><ul><ul><li>Stretch objectives </li></ul></ul><ul><ul><li>Continuity in CEO, heterogeneous, young senior team </li></ul></ul><ul><ul><li>Create variation, selection, project book, even with continuous improvement </li></ul></ul><ul><ul><li>Autonomous teams report to general manager </li></ul></ul><ul><ul><li>Proactive reorientations </li></ul></ul>Conventional Lens Size, shape, packaging Ciba Vision: Markets Technology Vysodyne Daily Disposibles Extended wear Discontinuous Process Innovation (10¢ vs. 40¢) Fashion lens
  33. 37. Organizational Evolution <ul><li>Through incremental change in exploitative unit coupled with proactive discontinuous change in exploratory unit (eg. Ciba Vision, IBM Middleware, USAToday) </li></ul><ul><li>Or, periods of convergence with increasing congruence </li></ul><ul><li>punctuated by re-orientations, often requiring </li></ul><ul><li>new top management teams (eg. HP Handheld Scanners, IBM Network Technology, Goodyear) </li></ul>How do organizations evolve?
  34. 38. Patterns in Organizational Evolution Magnitude of Change Incremental Change Discontinuous Change Time • Organization Evolution: Incremental and punctuated change or Periods of incremental change punctuated by discontinuous change • Executive team succession often associated with discontinuous organizational change.
  35. 39. In Sum: Innovation Streams Exist: Business Units Explore and Exploit Simultaneously Ambidextrous Designs: Stable Organizational Form Can Be Learned Over Time Set of Interrelated Dimensions—High Differentiation Tactical Structural Integration Senior Team Integration Role of General Manager Meta Manager Ambidextrous Designs Permit Exploitation and Exploration: More Effective Than Other Designs and seems to facilitate performance of existing product
  36. 40. Dynamic Capabilities not through: semi structures tight/loose coupling choreographed transitions spin outs, ICV, skunk works Dynamic Capabilities through embracing contradictions through: High Differentiation-contradictory architectures Targeted Integration Senior Team Integration: roles, processes, incentives, vision General Manager Meta Manager On Organizational Evolution: Targeted incremental and punctuated change Or, Organization-wide punctuated change
  37. 41. Next Steps Boundary conditions : Product Substitution Process innovation? Service innovation (IGS/Canada)? Senior Team Characteristics, Processes and Behaviors Corporate Ambidexterity (EBO’s) Markets EXISTING Innovation Technology Innovation Senior Team

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