FITT Toolbox: How to manage Uncertainty in Business Strategy

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FITT Toolbox: How to manage Uncertainty in Business Strategy

  1. 1. How to manage uncertainty in business strategy? Dominique VIAN Research Professor SKEMA Business School FITT– Fostering Interregional Exchange in ICT Technology Transfer – www.FITT-for-Innovation.euExcept where otherwise noted, this work is licensed under a Creative Commons Attribution 3.0 License.
  2. 2. Summary Some Preminary definitions Managerial Thinking – Causal Reasoning Entrepreneurial Thinking - Effectual Reasoning ISMA360®: The process Using of ISMA360® for a ICT cluster2 | 03/2011 How to manage uncertainty in business strategy?
  3. 3. Some preliminary definitions Innovate: to introduce a newness (the invention) into a social environment (the market is a social milieu) Schumpeter (1942) « Innovation is to be disobedient to the past » Boris Cyrulnik (2002)3 | 03/2011 How to manage uncertainty in business strategy?
  4. 4. Some preliminary definitions “To be overly preoccupied with the future is to be inattentive toward the present where learning and growth take place.” Karl Weick "How Projects Lose Meaning: The Dynamics of Renewal" in Renewing Research Practice by R. Stablein and P. Frost (Eds.). Stanford, CA: Stanford. 20044 | 03/2011 How to manage uncertainty in business strategy?
  5. 5. Risk management and control under uncertainty is also two philosophical positions The predictions in economics are not as exact as … … the complexity of our human organizations creates uncertainty … risk Management : the exceptional situations are not considered .. in a certain world, there is no room for breakthrough innovation Causal Reasoning ↔ Effectual Reasoning5 | 03/2011 How to manage uncertainty in business strategy?
  6. 6. Managerial Thinking – Causal Reasoning The means arecauses to achieve the Simple projection of intended goal the future Given Goal « To the extent that we can predict the future, we can control it. » (Sarasvathy et Simon, 2000) 6 | 03/2011 How to manage uncertainty in business strategy?
  7. 7. The Predictive Process Extract from Read et al. (2009)7 | 03/2011 How to manage uncertainty in business strategy?
  8. 8. Entrepreneurial Thinking - Effectual Reasoning What are my What are the effects I given means? can reach with given means? Sense making « To the extent that we can control the future, we do not need to predict it» (Sarasvathy et Simon, 2000)8 | 03/2011 How to manage uncertainty in business strategy?
  9. 9. The Effectual Process Extract from Sarasvathy and Dew (2005)9 | 03/2011 How to manage uncertainty in business strategy?
  10. 10. Difference between Predictive & Effectual Thought From Sarasvathy et Dew, 200510 | 03/2011 How to manage uncertainty in business strategy?
  11. 11. The information system that mobilizes the predictive logic… • Begins by defining the specific objective to achieve • Organizes the resources in backward chaining from the goal • Reorganizes possibly the means to achieve the predefined goal • Seeks to maximize the achievement of the objective (critical path) Eg : MS Project ®, Project Management Tool11 | 03/2011 How to manage uncertainty in business strategy?
  12. 12. The information system that mobilizes the Effectual logic… • Does not define a specific goal but an overall goal that makes sense • Picks up cues that are potentially means and effects (weak signal) • Permanently re-processes cues according to the direction that continuously develops • Coupling means and effects is what provides product design and market forward chaining • Result is achieved is outside the process (it is a consequence) Eg : ISMA360 ®, an effectual method to design innovation ISMA60 is a Trademark of SKEMA BS – Author Dominique Vian12 | 03/2011 How to manage uncertainty in business strategy?
  13. 13. ISMA360®: The process13 | 03/2011 How to manage uncertainty in business strategy?
  14. 14. Using of ISMA360® for a clusterThe case of French Competitiveness Cluster SCS (Secured Communicating Solutions)
  15. 15. The problem of the cluster, as it has been exposed The Cluster SCS, focused on ICT technology and skills, has one mission: Boosting the emergence of innovative and collaborative projects on priority focuses - identity, connectivity, mobility, tracking. The problems they have faced: • Is it appropriate or not to invest in technology because of its feasibility and its potential market • Verify that skills are present within the cluster • If yes, find collaborative projects15 | 03/2011 How to manage uncertainty in business strategy?
  16. 16. Questions to answer? • What are the potential applications of the new technology NFC (Near field communication) today? • Among these applications, the use of NFC for the distribution sector is an key application? • Applications around the payment, can they grow? • On which applications could be mobilized members of the cluster to build a relevant collaborative project?16 | 03/2011 How to manage uncertainty in business strategy?
  17. 17. The results found through the application of the method (1 / 3) The role of innovation: In the field of wireless communication, NFC enables information exchange between a transmitter and intended receiver Unique character of the role: this is what differentiates NFC technology from any other technologies17 | 03/2011 How to manage uncertainty in business strategy?
  18. 18. The results found through the application of the method (2 / 3) • Relevant applications of NFC (to date): • Promotion of a site or museum • Retail (supermarkets only) with the support of advertisers for the promotion, information about a product and its location in the store • Applications not relevant to the NFC or impossible to operate under current conditions of the market • Management of infrastructure building • Payment outside of a solution integrating other features of the Retail • E-ticketing18 | 03/2011 How to manage uncertainty in business strategy?
  19. 19. The results found through the application of the method (3 / 3) • Current conditions allow an “NFC Retail“solution • The only partner who can implement it today is an integrated information system like Schlumberger or Cap Gemini, which may contract directly with WalMart or Carrefour. • Collaborative projects for “NFC Retail” are not possible • Collaborative projects are possible for tourism sector19 | 03/2011 How to manage uncertainty in business strategy?
  20. 20. Conclusion • Both rationalities can be used. It is possible to take one or the other depending on the situation. • The Effectual reasoning corresponds to situations of innovation (high uncertainty). • Apple who is taking place in the market of mobile telephony (I-Phone) or creates a new market (I-Pad) demonstrates its ability to mobilize the two rationalities.20 | 03/2011 How to manage uncertainty in business strategy?
  21. 21. Training offer - SKEMA Exe SKEMA Business School has developed a new training module “Strategic Marketing for Innovation”, 100% effectual and includes an introduction to the ISMA360 ® method .21 | 03/2011 How to manage uncertainty in business strategy?
  22. 22. Exclusive partner of SKEMA BS for the commercialisation of ISMA360® One Method One tool 2 certifications The collaborative software22 | 03/2011 How to manage uncertainty in business strategy?

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