Mapping the innovation space Product- Process Strategic Service ProductRadical Process Re- Revolution engineering Strategic TransformationCurrent Incremental Product Process Strategic Evolution Change Development Market Process Strategic Penetration Efficiency FocusSource: Ahmed and Shepherd, 2010
Mapping the innovation space• Disruptive innovation (source: Clayton Christensen)
• Target overshot customers or non-customers; • Prioritize good-enough; • Do what established competitors don’t want to do, can’t do or are uninterested in doing.Source: Anthony, Johnson, Sinfield and Altman, 2008
Mapping the innovation space • Business Model Innovation canvas (Osterwalder and Pigneur)
• NYTD’s organizational evolution Ability to borrow Integrated Distinct but (1995) linked (2004) High Unsopported Isolated (1999) Low Low High Ability to forgetSource: Govindarajan and Trimble, 2005
INNOVATION NETWORK R&D partnerships in software 1970-1979, MERIT-CATI R&D partnerships in software 1995-1999, MERIT-CATISource: Cloodt et al. 2010
Relative importance of external sourcing drivers Market entryTime-to -Market* Cost SMEs LARGE Uncertainty Knowledge Monitoring 0.0 1.0 2.0 3.0 4.0 5.0 Market entry Time-to -market Cost Large average Large best in class Uncertainty Knowledge Monitoring** 0.0 1.0 2.0 3.0 4.0 5.0Source: Sabidussi, 2009
… and beyond …HIGH Acquisition Joint Ventures CONTROL CVC Alliance LicensingLOW SHORT LONG TIME HORIZON
Innovation strategy Upsides Downsides Requirements Examples -Organic growth is -Better control of IP Slower Recruiting and -Long term growth -Astute strategic human -Google -Challenge of Retaining superior focus Resource management -Merk Identifying and Human capital -Difficult for competitors - Organizational flexibility -Goldman Sachs valuing superior to imitate human capital. -Apple -Internalization of skills -Full risk exposure -Culture of risk tolerance Internal R&D -Intel and capabilities -Long time horizon -Organizational flexibility Spending -BMW - Full capture of returns -Uncertain returns -Long term commitment -HP -Shared risk -Potential loss of Multiple, small-scale -IBM IP control Dedicated function Strategic investments provide -Eli Lilly -Challenge of for the management Alliances strategic options -Oracle alignment of goals of partnerships -Faster than internal -Procter & Gamble -Shared returns internal development -Faster than growing -Risk of overpaying organically -Cultural integration Capability to identify -Cisco Acquisitions -Acquire innovative -Involves relying and assimilate -GE technologies before startups on others for acquisition targets -Microsoft become competitors innovation Source: Frank Rothaermel and A. Hess. MITSLoan management review spring 2010
Non-Stars Stars R&D Alliances Acquisitions Non-stars Stars R&D AlliancesAcquisitionsSource: Frank Rothaermel and A. Hess. MITSLoan management review spring 2010
2 Portfolio Balance Individual GC Assessment 1 (risk-return profile) Governance choice selection 3 no yes B2B ? OTHER Update total portfolio t= t0 + ∆t EXTERNAL 4 Internal INTERNAL sourcing no Technology Vs. change external sourcing ? Mayor Evolutions ? Market yes development Corporate Strategy shift Start t= t0Source: Sabidussi et al., 2011
A particular slide catching your eye?
Clipping is a handy way to collect important slides you want to go back to later.