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Intrapreneurial Transformation – Making digitalization work

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by Prof. Dr. Ing. Guido Baltes @ Corporate Startup Summit International in Zurich 28/04/2016

Published in: Leadership & Management
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Intrapreneurial Transformation – Making digitalization work

  1. 1. Prof. Dr.-Ing. Guido Baltes Corporate Startup Summit, Zurich, 28/04/2016 Intrapreneurial Transformation - Making digitalization work
  2. 2. Page 1© Prof. Dr.-Ing. Guido Baltes Prof. Dr.Ing. Guido Baltes - Professor for Strategy & Management, Director Institute for Strategic innovation & Technology management Current  Professor for Strategy & Management Lake Constance University (Hochschule Konstanz)  Director Institute for Strategic innovation & Technology management (IST), head of eArchitecture Innovation Lab & CoPS industry research group*  Research focus: Strategic Innovation based on Dynamic Capabilities & Corporate Entrepreneurship, supporting companies in strategic transition and strategic re-newal to implement innovation-driven growth strategies Industry background  Management board member as Head of Strategy & Marketing, Siemens Business Services Germany  Project management for strategic transition & turn-around projects (Corporate Strategy, Siemens AG)  Project manager Strategic Management Consulting, project management aerospace  PhD in Aeronautical Engineering & Master in Business Administration * CoPS : Community of Practice for Strategic Management Architectures – CeTIM : Centre for Technology & Innovation Management inno-ist.org
  3. 3. Page 2© Prof. Dr.-Ing. Guido Baltes IST focusses on technology-oriented companies and their challenge in dynamic markets: Implementing Strategic responsiveness Firm 1: not successful Firm 2: missing chances Firm 3: Sustained success with strategic responsiveness Market parameters time Market Source: IST / CoPS, Walter Isaacson “Steve Jobs” © Prof. Dr.-Ing. Guido Baltes ... creating an “entrepreneurial and agile organization” … (Steve Jobs)
  4. 4. Page 3© Prof. Dr.-Ing. Guido Baltes Digitalization drives companies out of business because the world around starts changing faster than the clock-speed of their business Digital Darwinism … … describes an era where technology and society are evolving faster than businesses can naturally adapt. Source: wired.com, IBM CxO Study 2015
  5. 5. Page 4© Prof. Dr.-Ing. Guido Baltes Challenge of market entry in Digital Transformation: You have to be there when the market is not yet there – when it is there, it is too late! Digital markets Market shares, index, market leader = 100% Platform as-a Service Infrastructure. as-a Service Traditional markets Market shares, index, market leader = 100% Automotive OEM Electrical equipment Internet media Auto parts Software Telecom carriers Digital markets = winner- takes-it-all- markets 0% 100% Microsoft IBM Oracle SAP Symatec EMC HP VMware CA Inc Adobe Systems 0% 100% Google Tencent Holdings Facebook Baidu Yahoo SoftBank Groupon AOL King Digtial Enter- tainment 0% 100% Amazon Microsoft IBM Google Oracle Rack- space 0% 100% Sales- force Amazon Microsoft IBM Service Now Netsuite Oracle Google 0% 100% AT&T Verizon NTT China Mobile Deutsche Telekom Tele- fonica SoftBank Voda- fone Orange China Telcom 0% 100% Toyota VW GM Ford Honda Fiat Nissan Daimler BMW SAIC 0% 100% Siemens Hitachi GE Schneider United Tech. ABB Mitsubishi Emerson Thoshiba Alstom 0% 100% Denso Conti- nental Magna Hyun- dai Bridge- stone Aisin Johnson Controls Cie Generale des Etablis- sement Faurecia Toyota Source: market data as of 2014 @ Bloomberg Visual Data, for PaaS/IaaS Visual Data, Ralph Finos @ wikibon
  6. 6. Page 5© Prof. Dr.-Ing. Guido Baltes Consequence: “Software eats the world” and sets out a new paradigm: © Prof. Dr.-Ing. Guido Baltes ... “DISRUPTION is the new NORMAL” … (Wall Street Journal) Source: Wall Street Journal, Jan 2014 Effects …  Volatility  Variability  Timliness  Chaos  Randomness  Uncertainty
  7. 7. Page 6© Prof. Dr.-Ing. Guido Baltes To address digital transformation, firms need to master core business efficiently and at the same time drive digital innovation: Ambidexterity Source: IST / CoPS – Gard, Baltes, Katzy “Managing autonomy of teams in Corporate Entrepreneurship”, IAMOT 2013, Porto Alegre, Brazzil Exploitation • Advantages from stability, standardization, repetition • Focus on planning, quality, processes, specialization • Incentives for risk averseness, cost reduction, documentation • Mass-produced physical-goods scaling by smarter automation & logistics EFFICIENCY INNOVATION Exploration • Advantages from agility based on flexibility & passion • Focus on investment in strategic options, with risk & failure tolerance • Incentives for experimental learning: „try early & fail cheap“ • Scaling based on intangible assets & technology capabilities The “both-handed” ambidextrous organization Efficient Hierarchy Entrepreneurial Teams
  8. 8. Page 7© Prof. Dr.-Ing. Guido Baltes Embedded Entrepreneurial team In start-ups, team configuration seems crucial – in contrast, for embedded teams the entrepreneurial team manager is key to success Source: Brown/Eisenhardt “Product Development: Past Research, Present Findings, and Future Directions”, IST / CoPS  Quality team of over-average people, hungry & personally committed lead by an entrepreneurial team manager  Complementing skills & cross-functional competences, moderate tenure  Uneven number of team members, clear roles, focus on core business only  High level of concurrency  Structuring complex problems into solving tasks  Foster frequent iteration and design-based testing Working mode  Inspire and instill trust  Provide guidance and get-out of the way (subtle control & monitoring)  Skip the word talent, focus on performance  Stretch people to get out-of-their comfort zone Business management
  9. 9. Page 8© Prof. Dr.-Ing. Guido Baltes The corporate entrepreneur differs significantly from entrepreneurs and corporate managers – but lends from both  Risk-averse, seeking stability  Team orientation  Leadership role  Need for power  Stakeholder management & communication focus  Analytical decision making,  Efficiency & execution driven  …  Risk-taking, tolerance for ambiguity  Extrinsic motivation, egoistic  Innovative, creative, visionary  Need for achievement  Full autonomy  Intuitive decision making  Effective & outcome driven  … Entrepreneur Manager Source: Brandstätter, Hermann (2011): Personality aspects of entrepreneurship. A look at five meta-analyses // Zhao, Hao; Seibert, Scott E. and Lumbkin, G. T.; (2010): The Relationship of Personality to Entrepreneurial Intentions // Ciavarella, M. A.; et al. (2004): The Big Five and venture survival // Rauch, A., & Frese, M. (2007). Let's put the person back into entrepreneurship research: A meta-analysis on the relationship between business owners' personality traits, business creation, and success // Busenitz, L. W., & Barney, J. B. (1997). Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. // Dyer, J. H., Gregersen, H. B., and Christensen, C. (2008). Entrepreneur behaviors, opportunity recognition, and the origins of innovative ventures // Fagiano, D. (1997). Managers vs. leaders: A corporate fable.  Analytical risk-taking, reproducible problem solving  Intrinsic motivation (achievement)  Entrepreneurial leader  Need for autonomy  Stakeholder management  Transparent decision making  Innovative initiator  …
  10. 10. Page 9© Prof. Dr.-Ing. Guido Baltes With that, entrepreneurial teams aim at integral innovation emerging from iterations between technology, product and business model Source: IST / CoPS; Chesbrough “The role of the business model in capturing value from innovation” Uncertainty:  Technology  Market  Environment Time EXPLORATION  Ideation  (prefield-) Research  Feasibility INKUBATION  Research  Development  Prototype DEVELOPMENT  Design  Product  Business model COMMERCIALISATION  Go to market  Roll-Out  Scaling $ Pivoting Business model Customer Markets © Prof. Dr.-Ing. Guido Baltes
  11. 11. Page 10© Prof. Dr.-Ing. Guido Baltes Wanting to climb the highest mountain in the world may not be regarded as particularly original idea Being the first one to IMPLEMENT this idea certainly is! Top management role: Skip talent, idea, … focus and push the entrepreneurial team on performance & speed in implementation “The brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.” Randy Pausch Professor for information technology Carnegie Mellon University The Last Lecture Picture-Source: tenzing-norgay-trekking.de
  12. 12. Page 11© Prof. Dr.-Ing. Guido Baltes Prof. Dr.-Ing. Guido Baltes Institute for Strategic innovation & Technology management Hochschule Konstanz Brauneggerstraße 55 78405 Konstanz, gbaltes@htwg-konstanz.de Tel +49 7531 206 310 Contact details © Prof. Dr.-Ing. Guido Baltes innovationsinstitut.org

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