inovation

1. 1
Innovation
Management

2. 2
Make sure you’ve fixed
(or are at least aware of)
the strategic problem

3. 3
What can be done?
 Lead:
– Build the “ambidextrous” senior team:
communicate the strategy, allocate resources
 Structure:
– Explore transitional and intermediate forms
 Incent:
– Explain “just what’s in this for me?”
 Build:
– Lay the foundations for a new culture, new
expectations

4. 4
What can be done?
 Lead:
– Develop a clear strategy
– Generate energy
– Build an “ambidextrous” senior team
– Make decisions

5. 5
Develop a clear strategy
How will we
Create value?
How will we
Capture value?
How will we
Deliver value?

6. 6
And allocate resources to it!
How will we
Create value?
How will we
Deliver value?
How will we
Capture value?
100%
80%
60%
40%
0%
20%
6
5
4
3
1 2

7. 7

8. 8
Generate Energy
 Position the discontinuity as an urgent threat:
– Flirt with bankruptcy
– Make vivid the idea that the firm might flirt with
bankruptcy
 Position the discontinuity as an opportunity
– Generate some small successes: build enthusiasm and
“infect” the organization
– Leap boldly into the future

9. 9
An established company which,
in an age demanding innovation,
is not able to innovate, is doomed
to decline and extinction.
-- Peter Drucker

10. 10
Build ambidextrous organizations:
Differentiation vs. integration
General Manager
Existing business Emerging business
Mfg Sales R&D Mfg Sales R&D

11. 11
The scope of the ambidextrous organization
Alignment of: Exploitative
Business
Exploratory
Business
Strategic intent
Critical tasks
Competencies
Structure
Controls, rewards
Culture
Leadership role
Ambidextrous Leadership

12. 12
Build an Ambidextrous Senior Team
 Ambidextrous senior teams must manage
– both more mature, operationally focused businesses
– and higher growth, emerging businesses
 High performing senior teams show:
– High conflict, high respect decision making capabilities
– High levels of trust and truth telling
– The ability to manage divergent incentive systems and
career paths
 Coupled with processes that support the divergent
management of quite different business units
– E.g. Resource allocation processes that allow for
different time horizons, milestones, rates of return

13. 13
When you innovate, you've got to
be prepared for everyone telling
you you're nuts.
--Larry Ellison

14. 14
If at first the idea is not absurd,
then there is no hope for it.
--Albert Einstein

15. 15
What can be done?
 Lead:
 Structure:
– Implement appropriately
– Choose the right people
– Manage linkages

16. 16
Control & Coordination
Balance entrepreneurial energy and
coordination
Entrepreneurial
Energy Successful disruptive
innovation unites
entrepreneurial insight with
effective coordination
Startups
B as U

17. 17
Control & Coordination
Choose a structure that fits the firm’s
strategic positioning and skills
Joint
venture/
alliance
Entrepreneurial
Energy
Internal
venture
Build inside
existing unit
Acquire

18. 18

19. 19
What can be done?
 Lead
 Structure:
 Incent
– Explain “just what’s in this for me?”
– Manage the balance between:
• Individual outcomes and team/firm outcomes
• “Objective” and “subjective” measures

20. 20
Control & Coordination
The incentive problem is an inherently
difficult one…
Entrepreneurial
Drive,
Freedom from
the “old ways”
Startups
B as U

21. 21
Control & Coordination
Using “high powered” incentives may
reduce coordination
Acquire
Build inside
existing units
Joint
venture/
alliance
Entrepreneurial
Drive,
Freedom from
the “old ways”
Internal
venture
Build inside
existing unit
?

22. 22
Large corporations welcome
innovation and individualism
in the same way the dinosaurs
welcomed large meteors.
--Dilbert

23. 23
What can be done?
 Lead
 Structure
 Incent
 Transform the culture:
– Build on core values
– Practice thinking in new ways
– Manage from the heart

24. 24

25. 25
Case Discussion: IBM
 What was the situation facing Lou Gerstner as he
came in as IBM’s new CEO?
 What did Gerstner do to deal with IBM’s problems? Do
you think Gerstner has really turned around IBM?