Professor David Teece presented on dynamic capabilities and innovation. He discussed the need for a capabilities perspective in strategic management theory given deep uncertainty in today's global economy. He introduced the dynamic capabilities framework, which includes sensing opportunities, seizing opportunities through asset orchestration, and transforming an organization. Closing capability gaps requires identifying technology, market, and business model gaps, which can be difficult to recognize. Dynamic capabilities emphasize advanced agility through redeployment capacity to effect organizational change.
Provide contemporary and comprehensive perspectives to understanding innovation theories and practices in organization. The slides include many unique understanding to business models, SWOTs, innovation value chains, and human competency development model.
Recent strategic management literature has suggested the age of sustainable competitive advantage has ended, that we instead live in the age of temporary advantage. However, dynamic capabilities, routines that adapt resources, are considered to be a source of sustainable competitive advantage. This paper addresses a gap in the literature by proposing a theory of individual level dynamic capability development. This paper also proposes dynamic capabilities which are organized by the four dimensions of the learning orientation construct are positively associated sustainable competitive advantage.
To appreciate the role of entrepreneurship in challenging and urgent times
To classify the types of climate change effects on entrepreneurs as well as the opportunities hat arise within the Asia–Pacific context
To review important concepts in climate change economics that impact entrepreneurial activity
To appreciate the various emerging frameworks in entrepreneurial ecology
Provide contemporary and comprehensive perspectives to understanding innovation theories and practices in organization. The slides include many unique understanding to business models, SWOTs, innovation value chains, and human competency development model.
Recent strategic management literature has suggested the age of sustainable competitive advantage has ended, that we instead live in the age of temporary advantage. However, dynamic capabilities, routines that adapt resources, are considered to be a source of sustainable competitive advantage. This paper addresses a gap in the literature by proposing a theory of individual level dynamic capability development. This paper also proposes dynamic capabilities which are organized by the four dimensions of the learning orientation construct are positively associated sustainable competitive advantage.
To appreciate the role of entrepreneurship in challenging and urgent times
To classify the types of climate change effects on entrepreneurs as well as the opportunities hat arise within the Asia–Pacific context
To review important concepts in climate change economics that impact entrepreneurial activity
To appreciate the various emerging frameworks in entrepreneurial ecology
Modeling Dynamic Capabilities and Corporate Entrepreneurship for Innovation ...Ruta Aidis
With limited resources and the need for constant innovation, entrepreneurship is perceived as an important factor for assuring economic growth and development at the venture and national levels. In this conceptual paper, we focus our analysis to corporate entrepreneurship as it contributes to the innovative processes within a venture. Though corporate entrepreneurship is a quite well explored phenomenon, few efforts have been made to elaborate on the antecedents and cohesion between dynamic capabilities and corporate entrepreneurship especially for high growth economies. This paper aims to explore the role of the dynamic capabilities as the antecedent of corporate entrepreneurship and the nature of the cohesion between them. The authors model the cohesion between dynamic capabilities and corporate entrepreneurship and argue that it generates business innovations that in turn generate aggregate demand and growth of the economy.
Most people are born creative. As children, we revel in imaginary play, ask outlandish questions, draw blobs and call them dinosaurs. But over time, because of socialization and formal education, a lot of us start to stifle those impulses. We learn to be warier of judgment, more cautious, more analytical. The world seems to divide into “creatives” and “noncreatives,” and too many people consciously or unconsciously resign themselves to the latter category.
And yet we know that creativity is essential to success in any discipline or industry. According to a recent IBM survey of chief executives around the world, it’s the most sought-after trait in leaders today. No one can deny that creative thinking has enabled the rise and continued success of countless companies, from start-ups like Facebook and Google to stalwarts like Procter & Gamble and General Electric.
In this presentation you will discover why you lost your creative confidence—the natural ability to come up with new ideas and the courage to try them out, and how to restore it back.
Henry Mintzberg's Ten Schools of Thought on Strategic ManagementDavid Tracy
Download full document here:
http://pptlab.com/ppt/Business-Framework-Ten-Schools-of-Thought-36
Developed by Henry Mintzberg, the Ten Schools of Thought framework breaks down the field of Strategic Management into 10 categories, from Positioning to Entrepreneurial to Configuration. This document explains each School, its origins, benefit and limitations, related analyses/frameworks, and other attributes. Also includes PowerPoint templates for illustrating this model in your presentation.
This is a presentation given in the MBS MSc Innovation Management course taught by Prof. Silvia for group assignment to introduce and discuss the paper Dynamic Capabilities and Strategic Management by Teece D., Pisano G., and Shuen A. in 1997.
This is the second of three presentations delivered at an innovation workshop for the Greater Tygerberg Partnership, a non-profit organisation facilitating socio-economic growth in the northern region of Cape Town, in July 2016. This particular deck looked at four innovation theories and methodologies. Like many of my presentations it requires a talking head in front to fully explain. Hopefully, when viewed with the accompanying deck on innovation tools and processes, a viewer will be ale to discern the main themes and points of the workshop. (The third deck in the workshop was just an introduction to the workshop).
Modeling Dynamic Capabilities and Corporate Entrepreneurship for Innovation ...Ruta Aidis
With limited resources and the need for constant innovation, entrepreneurship is perceived as an important factor for assuring economic growth and development at the venture and national levels. In this conceptual paper, we focus our analysis to corporate entrepreneurship as it contributes to the innovative processes within a venture. Though corporate entrepreneurship is a quite well explored phenomenon, few efforts have been made to elaborate on the antecedents and cohesion between dynamic capabilities and corporate entrepreneurship especially for high growth economies. This paper aims to explore the role of the dynamic capabilities as the antecedent of corporate entrepreneurship and the nature of the cohesion between them. The authors model the cohesion between dynamic capabilities and corporate entrepreneurship and argue that it generates business innovations that in turn generate aggregate demand and growth of the economy.
Most people are born creative. As children, we revel in imaginary play, ask outlandish questions, draw blobs and call them dinosaurs. But over time, because of socialization and formal education, a lot of us start to stifle those impulses. We learn to be warier of judgment, more cautious, more analytical. The world seems to divide into “creatives” and “noncreatives,” and too many people consciously or unconsciously resign themselves to the latter category.
And yet we know that creativity is essential to success in any discipline or industry. According to a recent IBM survey of chief executives around the world, it’s the most sought-after trait in leaders today. No one can deny that creative thinking has enabled the rise and continued success of countless companies, from start-ups like Facebook and Google to stalwarts like Procter & Gamble and General Electric.
In this presentation you will discover why you lost your creative confidence—the natural ability to come up with new ideas and the courage to try them out, and how to restore it back.
Henry Mintzberg's Ten Schools of Thought on Strategic ManagementDavid Tracy
Download full document here:
http://pptlab.com/ppt/Business-Framework-Ten-Schools-of-Thought-36
Developed by Henry Mintzberg, the Ten Schools of Thought framework breaks down the field of Strategic Management into 10 categories, from Positioning to Entrepreneurial to Configuration. This document explains each School, its origins, benefit and limitations, related analyses/frameworks, and other attributes. Also includes PowerPoint templates for illustrating this model in your presentation.
This is a presentation given in the MBS MSc Innovation Management course taught by Prof. Silvia for group assignment to introduce and discuss the paper Dynamic Capabilities and Strategic Management by Teece D., Pisano G., and Shuen A. in 1997.
This is the second of three presentations delivered at an innovation workshop for the Greater Tygerberg Partnership, a non-profit organisation facilitating socio-economic growth in the northern region of Cape Town, in July 2016. This particular deck looked at four innovation theories and methodologies. Like many of my presentations it requires a talking head in front to fully explain. Hopefully, when viewed with the accompanying deck on innovation tools and processes, a viewer will be ale to discern the main themes and points of the workshop. (The third deck in the workshop was just an introduction to the workshop).
ROI on Strategic Talent Management: What a Business Should Expect from Their ...christa_dhimo
Talent Management is a competitive advantage, yet so many companies still base their HR metrics on "present state" instead of turning it into business data and "future state" related to strategy and advancing the business. ROI indicators should by definition promote the FUTURE return on your investment by promoting sound business-related programs to predict and influence that future state. Those rules apply to ALL strategic elements in business, yet so few apply it to Human Resource programs. This is a culmination of powerful data while presenting the story of how Strategic Talent Management can impact a business.
DRU 502 Innovation and Entrepreneurship Lesson 3IntrapreneursAlyciaGold776
DRU 502: Innovation and Entrepreneurship Lesson 3
Intrapreneurship vs. Entrepreneurship, the Dangers of Innovation, and Drucker’s 5 Principles of Systematic Entrepreneurship
J. Richard Johnson, PhD
“Intrapreneurship” versus “Entrepreneurship”
The Dangers of Innovation: Why It’s Hard for Large Organizations to Innovate
But if they do want to innovate, how should they proceed?
Big organizations have disadvantages that entrepreneurs can exploit
Big organizations can avoid being “invaded from below” by using Drucker’s 5 Principles of Systematic Entrepreurship.
Objectives of this Presentation
2
Intrapreneurs and Entrepreneurs
“Intrapreneur” came into popular use during the 1980s.
By 1992, it was common enough to show up in the American Heritage Dictionary. Here is the definition:
“A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation"
3
Intrapreneurs and Entrepreneurs
As you can might suspect, “intrapreneurs” differ from “entrepreneurs” in that they work for someone else, whereas entrepreneurs work for themselves.
Entrepreneurs personally bear the risks of enterprise
Intrapreneurs do not—their efforts are paid for by someone else
That does not mean, however, that they do not bear other kinds of risk…
The Dangers of Innovation
Consider the matrix of possible outcomes for an innovation and for the innovator shown below:
Consequences for Innovation
Consequences for
Innovator
+ +
+ -
- +
- -
+
-
+
-
Healthy Organization
Bureaucracy
The Dangers of Innovation
Some things to consider:
When the innovator is an insider, i.e., an intrapreneur, what are his or her objectives?
Why will insiders who aren’t part of the intrapreneurial team often resist innovation?*
*Note: This is where the “politics of taking credit” becomes important.
7
The Dangers of Innovation
Anatomy of a Box 3 Scenario—Type I:
Line managers “don’t understand” the proposal
Innovator goes back to the drawing board, reconfigures presentation, then presents again
Process iterates
One day, the innovator comes back and the line says, “We’re already doing it”*
Why might the outcomes in the first and fourth bullets be damaging to the innovator?
*Note: They may be telling the truth, or they may be stalling...
**Note: The line just took the credit (or part of the credit) for the innovation, and implied that the innovator (or innovation team) wasted their time.
8
The Dangers of Innovation
Anatomy of a Box 3 Scenario—Type II:
The line organization doesn’t reach the “we’re already doing it” stage, instead the plug is pulled on the project by a higher up.
The innovator is given another assignment.
Six months later a “hot shot” with “pull” at the officer level comes in and revives the innovation.
Some “i”s are dotted, some “t”s are crossed, and the presentation is re-published—with the “hot shot’s” name on the front pa ...
CHP. 10 case study 3m 3M’s Conundrum of Efficiency and Creativi.docxmccormicknadine86
CHP. 10 case study: 3m
3M’s Conundrum of Efficiency and Creativity
Companies known for their innovative character, like Minnesota Mining and Manufacturing (3M), share at least four fundamental characteristics: (1) Putting people and ideas at the heart of the management philosophy. (2) Giving people opportunities and latitude to develop, try new things, and learn from their mistakes. (3) Building a strong sense of openness, trust, and community throughout the organization. (4) Facilitating the mobility of talent within the organization.
3M believes in the power of ideas and individual initiative; and “recognizes that entrepreneurial behavior will continue to flourish only if management is willing to accept and even applaud ‘well-intentioned failure’.”
Innovation, the traditional hallmark of 3M’s business operations and success, is “a process that thrives on multiple, diverse, independent and rapid experimentation, in a failure-tolerant environment that values and accommodates constructive conflict.”
Richard McKnight, 3M’s president in the company’s early days, “recognized that it was the individual inventor, enabled in pursuing his ideas, who could help the company develop new organizational knowledge with which to meet emerging customer needs. As a result, McKnight created the company’s 15 Percent Rule, which still encourages technical employees to spend as much as 15 percent of their time pursuing their own ideas. ( Among the most successful of the products developed through the 15 Percent Rule are masking tape in the 1930s, Scotchgard fabric protector in the 1950s, and Post-it Notes in the 1970s.”
The creative and innovative orientation of 3M ( and in particular a tolerance for failure, defects or errors ( came under serious attack in December 2000, when former General Electric executive James McNerney took over as CEO of 3M. McNerney immediately began implementing Six Sigma,
a type of management program that is designed to identify problems in work processes, and then use rigorous measurement to reduce variation, eliminate defects, and increase efficiency. Under McNerney’s leadership, profits initially grew at about 22 percent annually but then sputtered. Some experts were critical of McNerney’s unyielding commitment to Six Sigma, wondering if it was stifling 3M’s creativity and innovation.
When initiatives such as Six Sigma become embedded in a company’s culture, as they did at 3M, creativity and innovation can easily get squelched.
In mid-2005, when McNerney departed 3M to take the CEO’s job at Boeing, he left his successor, George Buckley, with the difficult question of “whether the relentless emphasis on efficiency had made 3M a less creative company.”
According to management guru Tom Peters, McNerney’s implementation of Six Sigma at 3M “more or less closed the lid on entrepreneurial behavior.”
Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business, observes that when more emphasis is placed on a program li ...
Sanjib Sahoo, CTO of tradeMONSTER, tells the the story of his startup rising to become Barron's #1 ranked trading platform by using effective leadership, fearless organization culture, recruiting the right people agile development and open source technology.
Article visualizing action - innovation dailyDebra M. Amidon
In an era of Big Data, we are challenged to identify signals of progress. Where complexity and change are the norm, classical financial indicators are no longer sufficient. We demonstrate a unique tool for social and organizational networking analysis to provide insight with a picture for strategic planning and economic development using 15 Massachusetts enterprises and 15 value drivers for Intellectual Capital.
The Team Member and Guest Experience - Lead and Take Care of your restaurant team. They are the people closest to and delivering Hospitality to your paying Guests!
Make the call, and we can assist you.
408-784-7371
Foodservice Consulting + Design
Specific ServPoints should be tailored for restaurants in all food service segments. Your ServPoints should be the centerpiece of brand delivery training (guest service) and align with your brand position and marketing initiatives, especially in high-labor-cost conditions.
408-784-7371
Foodservice Consulting + Design
Senior Project and Engineering Leader Jim Smith.pdfJim Smith
I am a Project and Engineering Leader with extensive experience as a Business Operations Leader, Technical Project Manager, Engineering Manager and Operations Experience for Domestic and International companies such as Electrolux, Carrier, and Deutz. I have developed new products using Stage Gate development/MS Project/JIRA, for the pro-duction of Medical Equipment, Large Commercial Refrigeration Systems, Appliances, HVAC, and Diesel engines.
My experience includes:
Managed customized engineered refrigeration system projects with high voltage power panels from quote to ship, coordinating actions between electrical engineering, mechanical design and application engineering, purchasing, production, test, quality assurance and field installation. Managed projects $25k to $1M per project; 4-8 per month. (Hussmann refrigeration)
Successfully developed the $15-20M yearly corporate capital strategy for manufacturing, with the Executive Team and key stakeholders. Created project scope and specifications, business case, ROI, managed project plans with key personnel for nine consumer product manufacturing and distribution sites; to support the company’s strategic sales plan.
Over 15 years of experience managing and developing cost improvement projects with key Stakeholders, site Manufacturing Engineers, Mechanical Engineers, Maintenance, and facility support personnel to optimize pro-duction operations, safety, EHS, and new product development. (BioLab, Deutz, Caire)
Experience working as a Technical Manager developing new products with chemical engineers and packaging engineers to enhance and reduce the cost of retail products. I have led the activities of multiple engineering groups with diverse backgrounds.
Great experience managing the product development of products which utilize complex electrical controls, high voltage power panels, product testing, and commissioning.
Created project scope, business case, ROI for multiple capital projects to support electrotechnical assembly and CPG goods. Identified project cost, risk, success criteria, and performed equipment qualifications. (Carrier, Electrolux, Biolab, Price, Hussmann)
Created detailed projects plans using MS Project, Gant charts in excel, and updated new product development in Jira for stakeholders and project team members including critical path.
Great knowledge of ISO9001, NFPA, OSHA regulations.
User level knowledge of MRP/SAP, MS Project, Powerpoint, Visio, Mastercontrol, JIRA, Power BI and Tableau.
I appreciate your consideration, and look forward to discussing this role with you, and how I can lead your company’s growth and profitability. I can be contacted via LinkedIn via phone or E Mail.
Jim Smith
678-993-7195
jimsmith30024@gmail.com
Artificial intelligence (AI) offers new opportunities to radically reinvent the way we do business. This study explores how CEOs and top decision makers around the world are responding to the transformative potential of AI.
The case study discusses the potential of drone delivery and the challenges that need to be addressed before it becomes widespread.
Key takeaways:
Drone delivery is in its early stages: Amazon's trial in the UK demonstrates the potential for faster deliveries, but it's still limited by regulations and technology.
Regulations are a major hurdle: Safety concerns around drone collisions with airplanes and people have led to restrictions on flight height and location.
Other challenges exist: Who will use drone delivery the most? Is it cost-effective compared to traditional delivery trucks?
Discussion questions:
Managerial challenges: Integrating drones requires planning for new infrastructure, training staff, and navigating regulations. There are also marketing and recruitment considerations specific to this technology.
External forces vary by country: Regulations, consumer acceptance, and infrastructure all differ between countries.
Demographics matter: Younger generations might be more receptive to drone delivery, while older populations might have concerns.
Stakeholders for Amazon: Customers, regulators, aviation authorities, and competitors are all stakeholders. Regulators likely hold the greatest influence as they determine the feasibility of drone delivery.
Dynamic Capabilities and Innovation: Capability Building and Strategic Management for Today's Global Economy
1. DYNAMIC CAPABILITIES AND INNOVATION:
Capability Building and Strategic Management
for Today’s Global Economy
Professor David J. Teece
Tusher Center for Intellectual Capital Management
Haas School of Business, University of California, Berkeley
Finlandia Hall, Helsinki, January 22, 2018
*Slides partially based on:
1. D.J. TEECE, “TOWARD A CAPABILITY THEORY OF (INNOVATING) FIRMS: IMPLICATIONS FOR MANAGEMENT AND
POLICY”, CAMBRIDGE JOURNAL OF ECONOMICS, 2017 1 OF 28
2. D. TEECE, M. PETERAF, S. LEIH, “DYNAMIC CAPABILITIES & ORGANIZATIONAL AGILITY: RISK, UNCERTAINTY, &
STRATEGY IN THE INNOVATION ECONOMY”, CALIFORNIA MANAGEMENT REVIEW, VOL.58, NO.54 (SUMMER 2016)..
Copyright D.Teece 2018
1
2. Copyright D.Teece 2018 2
TABLE OF CONTENTS:
I. The need for a capabilities perspective
II. Risks & uncertainty in management
III. The dynamic capabilities framework
IV. Closing capability gaps
V. Dynamic capabilities in ecosystems
VI. Reflections from practice
3. I. The need for a capabilities
perspective
Copyright D.Teece 2017 3
4. Already in 1921 Frank Knight hinted at
the need for dynamic capabilities
theory of the firm
“With uncertainty present, doing things, the actual execution of
activity becomes in a real sense a secondary part of life; the
primary problem or function is deciding what to do and how to do
it” (Knight, 1921:268)
Interpretation: Making the right investments is critical while
optimizing current activities for efficiency is less important.
However, if investments are irreversible, there are potential
problems
Copyright D.Teece 2017 4
5. The capability to innovate and change is the
very essence of capitalism, but it is deeply
underplayed in modern economic theory
As Nelson (1981) explains, the very essence of capitalism—in
fact, the very advantage of a private enterprise economy over
a planned one—is that, with private enterprise, firms
innovate, compete, sometimes disrupt each other, and
sometimes cooperate
Nelson is surely right; so theories of the firm that do not put
innovation and change center stage are not in tune with the
essence of our economy or the fundamental managerial
challenges of our time
Copyright D.Teece 2017 5
6. Lord Keynes & Jeff Bezos (Amazon) see
eye-to-eye?
Keynes stressed that if human nature felt no temptation to
take a chance and investment had to rely on cold calculation,
there might not be much investment
Likewise, Jeff Bezos, the CEO/founder of Amazon, noted:
“there are decisions that can be made by analysis … Unfortunately,
there’s this whole other set of decisions that you can’t ultimately boil
down to a math problem” (Deutschman, 2004, p. 57)
Copyright D.Teece 2017 6
7. Capabilities have been identified as the
key enabler of competitiveness
“The proximate cause [of differences in the wealth of nations]
lies, for the most part, in the capabilities of firms” (John
Sutton, London School of Economics, 2012)
Capabilities are the fulcrum for leveraging tangible resources
into human achievement (Amartya Sen, Nobel Laureate)
The main reason firms perform differently in the long run can
be traced to dynamic capabilities
Copyright D.Teece 2017 7
8. II. Risks & uncertainty in
management
Copyright D.Teece 2017 8
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9
Strategic management requires
distinguishing between risk and
uncertainty
F1
F?
F?
F?
F?
F?
F? F?
F2
F3
F4
F?
F?
F?
F?
Uncertainty
Don’t know most futures or their probabilities with (unknown
unknowns with probabilities)
F 1-4 are possible futures
F? are undefined futures
F?
10. Chess v. Mixed Martial Arts (MMA). MMA is a
good metaphor for competition under
uncertainty in the innovation economy
Chess
Each move is knowable (closed world). The better player almost
always wins. A large but finite number of moves and counter moves.
If the player (e.g. a computer) has unlimited computational powers,
chess is a trivial game as Von Neumann and Morgenstern once
observed
MMA
Not a closed world… rules more permissive. Striking, grappling,
boxing, kickboxing, Brazilian Jujitsu, Judo, and wresting are all
widely employed
Copyright D.Teece 2017 10
11. The lack of predictability and deep uncertainty in MMA is not unlike
todays interdependent innovation economy.
Existing “rules” of competition are being changed
Entirely new “rules” are invented (e.g. cloud computing;
Amazon Prime, internet of things)
New players constantly emerging (e.g. mobile money, start-
ups versus the banks)
To succeed in this world, managers need to be entrepreneurs,
and entrepreneurs need to be (or find) managers too (e.g. Brin
and Page found Schmidt to be CEO of Google).
Copyright D.Teece 2017
11
There is a premium to entrepreneurial
management when there is deep
uncertainty
12. 12
Newer Tools
Influence Diagrams
Scenario Planning
Real-options Analysis
Hedging/Derivatives
Enterprise Risk Management
System Dynamics Modeling
Traditional Tools
Extrapolative Forecasting
Net Present Value Analysis
Decision Trees
Expected Utility Theory
Computer Simulation
Portfolio Optimization
Insurance/Safety Programs
Certainty Risk Uncertainty Ambiguity Chaos/Ignorance
Lower Risk & Lower Reward Higher Risk & Higher Reward
Adapted from: Paul Schoemaker Robert E. Gunther, “Profiting from
Uncertainty: Strategies for Succeeding No Matter What the Future Brings”,
Atria Books; Reprint edition (October 8, 2016), p. 9.
Dynamic Capabilities
A shift toward greater ambiguity
13. III. The dynamic capabilities
framework
Copyright D.Teece 2017 13
14. Strong “ordinary” (or normal)
capabilities: require resources to be
used efficiently
There is little attention to the validity of fundamental of resource
allocation decisions
Operations, administration and governance are ordinary capabilities
Routines / standard operating procedures are key to ordinary
capabilities
Ordinary capabilities reflect technical efficiency
Diffusion of ordinary capabilities to rivals is enabled by
More information in the public domain
Better business school training
Management consultants
“Best practices” logic connected to strong ordinary capabilities
Admittedly, not everyone gets the simple stuff right
Copyright D.Teece 2017
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15. Best practices don’t suffice anymore
There is no benefit at being very good at delivering the
“wrong” products
Best practices alone are generally insufficient to ensure a
firm’s success and survival, except in weak competitive
environments (which are still ubiquitous in less-developed
countries).
Much of the knowledge behind ordinary capabilities can be
secured through consultants or through a modest investment
in training (Bloom et al., 2013).
Copyright D.Teece 2017
15
Being a top performer in productivity is unlikely to
lead to competitive advantages because it only takes
a few firms at the frontier to drive prices down to
competitive levels
16. From ordinary to dynamic capabilities in
autos
Ordinary: The operations portion of the automobile business
has been thoroughly optimized over many decades, doesn’t
vary much from one automobile company to another, and can be
managed with a focus on repetitive process. It requires little in
the way of creativity, vision or imagination. Almost all car
companies do this very well, and there is little or no
competitive advantage to be gained by “trying even harder”
in procurement, manufacturing or wholesale
Dynamic: Where the real work of making a car company
successful suddenly turns complex, and where the winners are
separated from the losers, is in the long-cycle product
development process, where short-term day-to-day metrics and
the tabulation of results are meaningless.
-Bob Lutz, former vice chairman at General Motors, Wall Street Journal, June11, 2011
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17
Deep uncertainty (turbulent environments)
require strong dynamic capabilities:
With stable environments ordinary capabilities are good enough
and provide meaningful guidance
18. Sensing
Identification of
opportunities &
threats at home
and abroad
Transforming
Continuous renewal
and periodic major
strategic shifts
Seizing
Mobilization of
resources to
deliver value and
shape markets
Copyright D.Teece 2017
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Dynamic capabilities can be thought of
as falling in three categories:
19. Sensing is the ability to see around
corners
The ability to foresee future
opportunities and threats… what
Jack Welsh (CEO of GE) once referred
to as the ability to “see around the
corners”
Copyright D.Teece 2017 19
20. Sensing is akin to discovery of the truth
“Intellect has little to do on the road to discovery. There
comes a leap in consciousness, call it intuition or what you
will, and the solution comes to you, and you don’t know how
or why.”
Albert Einstein
Copyright D.Teece 2017 20
21. Good sensing benefits from “abductive”
reasoning as a way to help sense the
future Explanations are developed for surprising or
anomalous behavior/phenomenon
Induction & deduction depend on the past
Abductive reasoning moves ahead through
“logical leaps of the mind” and uses all
available data in a search for patterns
Once an abductive hypothesis is established,
data is searched to test the hypothesis,
which in turn spurs original thinking
Not used to determine if something is true or
false, but to indicate a new path to “deep
truth” about a phenomenon or a situation
Copyright D.Teece 2017
21
Abductive reasoning is the handmaiden of sensing
The challenge is to develop a valid hypotheses
about what is going on in the market
22. 22
A B C
Expanding View to Look at Data
That No Longer Fits
Dynamic Monitoring
Strategic & Tactical Adjustment
Creating Scenarios & Strategic Vision
Narrowing In on a Few Scenarios
& Strategies
Zooming in & out to master
uncertainty
Adapted from: Paul Schoemaker Robert E. Gunther, “Profiting from Uncertainty: Strategies for Succeeding No Matter What the Future
Brings”, Atria Books; Reprint edition (October 8, 2016), p. 142.
23. Seizing/Asset Orchestration is also core to
dynamic capabilities
“Apple still has strong growth
opportunities because of its ability to
work simultaneously on hardware,
software and services… Apple has the
ability to innovate in all three of these
spheres and create magic… This isn’t
something you can just write a check
for. This is something you build over
decades.”
-Tim Cook, Apple CEO (Taipei Times, February 2013)
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24
Fig 5: Leadership Undergirding Dynamic Capabilities
Source: Krupp, Steven and Paul J.H. Schoemaker, Winning the Long Game: How Strategic Leaders
Shape the Future, Public Affairs/Perseus, 2014.
Asset orchestration requires many skills
25. Transformation is about redeploying
financial, physical, and human resources to
effectuate organizational change
What’s needed is some kind of dynamic optimization, rather
than the static optimization. Lou Gerstner, IBM’s former
(turnaround) CEO put it this way:
“In anything other than a protected industry, longevity is the capacity
to change ... If you could take a snapshot of the values and processes
of most companies 50 years ago—and did the same with a surviving
company in 2014—you would say it’s a different company other than,
perhaps, its name and maybe its purpose and maybe its industry. The
leadership that really counts is the leadership that keeps a company
changing in an incremental, continuous fashion. It’s constantly
focusing on the outside, on what’s going on in the marketplace,
what’s changing there, noticing what competitors are doing.”
(Davis and Dickson, 2014: 125).
Copyright D.Teece 2017 25
26. Transformation and organizational
structure & culture
Organizational structures, culture, and dynamics represent a
significant irreversibility
Dorothy Leonard-Barton (1992) noted that the source of a
company’s strength can become a “core rigidity” that inhibits
its development
It is often harder to repurpose an organization than to
repurpose a technology. The latter is often little more than
writing a check; the former requires organizational
reengineering
Benner and Tushman (2003) observed that activities focused
on measurable efficiency and variance reduction drive out
variance-increasing activities and, thus, affect an
organization's ability to innovate and adapt outside of existing
trajectories ... Core capabilities may become core rigidities
Copyright D.Teece 2017 26
27. Dynamic capabilities emphasizes advanced
agility, i.e. redeployment capacity
Dynamically capable firms have more than agility and more than
ambidexterity
Too often, agility is defined as the ability to do commonplace
things faster and cheaper. If that’s what one means by agility, it
is more akin to ordinary (rather than dynamic) capabilities
When agility refers to a reduction in the time required to reach
best practices, it is simply an incantation for Six Sigma, Value
Engineering, or other efficiency initiatives
Those may be necessary for the organization to become more
efficient; but they are only secondarily related to conferring
evolutionary fitness
What matters most is management’s ability to redeploy physical,
financial, and human assets to new and better commercial
avenues
Copyright D.Teece 2017 27
28. Capability/efficiency choices at Pepsi
“I had a choice. I could have gone pedal to the metal, stripped
out costs, delivered strong profit for a few years, and then said
adios. But that wouldn’t have yielded long term success. So I
articulated a strategy to the board focusing on the portfolio we
needed to build, the muscles we needed to strengthen, the
capabilities to develop…we started to implement that strategy,
and we have achieved great shareholder value while
strengthening the company for the long term.”
Indra Nooyi and Adi Ignatius, “How Indra Nooyi Turned Design Thinking
Into Strategy: An Interview with PepsiCo's CEO,” Harvard Business Review
(September 2015).
Copyright D.Teece 2017 28
29. • Strategic “fit” over the long run
(evolutionary fitness)
• Sensing, seizing, shaping and
transforming
• Difficult ; inimitable
• Technical efficiency in basic
business functions
• Operational, administrative,
and governance
• Relatively easy; imitable
Ordinary
Capabilities
Dynamic
Capabilities
Doing things “right” Doing the “right” things
Dynamic vs. ordinary capabilities
Copyright D.Teece 2017 29
Purpose
Tripartite
schemes
Imitability
Purpose
30. Dynamic capabilities in the strategic management theory space
Copyright Teece 2016
30
Five Forces
-industry
attractiveness is
the central
focus
-Entry barriers
critical
-Shielding from
competitors is the
game changer
Resource
Based View
-VRIN assets
drive value
creation
- 4 VRIN
traits necessary to
sustain advantage
“Isolating
mechanisms” are
central
Dynamic
Capabilities
-Asset orchestration
& strategy help
drive advantage
-Reshaping
ecosystems & biz
models is critical
Decision making
under deep
uncertainty
Identifying &
bridging capability
gaps
1980s 1990s 2000+
Deep
Uncertainty
Risk
Planning
-1-5 year
budgets
- Risk control
-Market forecasts
-Limited
competitive
analysis
1960s
32. Closing capability “gaps”
Capability gaps are of at least three kinds:
Technology gaps
Market gaps
Business model gaps
Copyright D.Teece 2017 32
33. Recognizing capability gaps isn’t
straight forward
The first challenge is to understand the location and
magnitude of capabilities deficiencies
Often it is only after an organization tries to do
something (and fails) that the gap is apparent. The
early phase of a project looks okay because there are
typically few outcomes metrics to evaluate
Later on, problem begin to crop up, the senior team
gets more and more involved, and the goal slips further
away
Ad hoc “solutions” are attempted and failed. Only then
is there general recognition of a capability gap
Copyright D.Teece 2017 33
34. There may or may not be a resource gap
behind an identified capability gap
Resources are not capabilities
There may be budgets and people assigned to a project
(resources) but, if employee capabilities are not strong,
performance failure is likely
Building capabilities is hard; the silver lining is that, once built,
they are then difficult for others to imitate
Put differently, the absence of a market for capabilities means
that benefits can flow from entrepreneurial and managerial
activity that builds and hones value-creating capabilities
Copyright D.Teece 2017 34
35. Addressing capability gaps
The search for capability gaps begins by examining the match
between a proposed business model and the firm’s existing
capabilities
An analysis of existing capabilities needs an objective point of
view that is detailed and realistic
Recognize what capabilities are needed
Develop them quickly, efficiently and effectively. This
itself is a dynamic capability (Feiler and Teece, 2014)
Copyright D.Teece 2017 35
36. Market Distance
Business Model Distance
Technological Distance
Target state relative to current “O”
O
Current state
Capability gaps & the transformation challenge
38. The dynamic capabilities framework is
hard to master given that our education
system favors deep specialization
Dynamic capabilities is relatively challenging to comprehend
and apply but can be the foundation to a more thorough
understanding of complex reality
Good (Silicon Valley type) managers have an intuitive dynamic
capabilities/systems view of the world. By making elements
and inter-relationships more explicit, the dynamic capabilities
can galvanize managers and management to action
The dynamic capabilities framework must be applied, further
clarified, further elaborated, and made more precise not only
within the company but in the surrounding ecosystem
Copyright Teece 38
39. Implications of digitalization on
capabilities
Elements of digital convergence
Digital data and signals, provide a common (0,1) base for handling diverse
types of information, including words, sounds, and images
Widespread use of common standards allows connectivity between diverse
information devices and complementary enterprises
Systems integration is both easier and more necessary
Co-invention/Co-innovation opportunities & challenges
• Requires integration of on going value creation and building of dynamic
capabilities
• The ubiquity of digital platforms must be recognized
• A “grand convergence” may be in process
Implication: Ecosystem orchestration and access and control of complementary
assets may now be more important to competitive advantage than installed
base/switching cost considerations
39
40. The key elements of the dynamic
capabilities ecosystem framework
Copyright Teece 40
Ecosystem
orchestration
41. Adner’s ecosystem methodology
41
Stresses:
• the importance not only of alignment with customers
but also with investment partners to minimize co-
innovation risk
• the role of ecosystem leader (the ecosystem
orchestrator)
• helps one identify gaps in complementary
assets/capabilities
A useful methodology to help clarify the structure
of required collaboration, i.e. who hands off what
to who & when?
42. Ecosystems and Wallin’s social
architecture
42
The social architecture stresses:
• The culture, communication patterns, reward systems,
policies, procedures and form of organizing
• People's capacity and willingness to adapt to changes and
their attraction to the network
When the unit of analysis shifts from firm to ecosystem:
• The orchestrator must secure the formation of both the
right social architecture and the dynamic capabilities on
ecosystem level
• In the example of Betterplace used by Adner the sensing was
not an ecosystem level property, but wishful thinking by
Betterplace founder Shai Agassi
43. The focus of dynamic capabilities
The focus of Dynamic Capabilities is:
Continuous innovation & change
Creating as well as capturing value
Orchestrating complementary assets
43
Sensing Seizing Transforming
44. The impact of General Purpose
Technologies (GPT)
44
These technologies have three characteristics
o Pervasive
o High potential
o Enhance research productivity
GPT’s often start out as something less, (e.g. user invented with no
initial obvious application)
GPT’s allow development of derivative technologies in diverse fields
(e.g. printing press, transistor, microprocessor)
In general new GPT’s introduce new appropriability challenges
45. GPT’s by definition open up the
field for new business model options
With digital convergence, a plethora of complements must
often be deployed to assure commercial success
In multi-invention contexts, which individual offerings draw on
multiple internal and external sources of technology (patented
and unpatented)
Business model choices for a new innovation, even with
reference just to appropriability, are more complex than the
original “licensing versus in-house production” appropriability
model (Teece, 2010; Zott et al., 2011)
45
46. Key GPT takeaways for ecosystems
46
Intangible assets are core to value capture
Coordination across organizational boundaries &
orchestration of the entire network is particularly
important to the success of modularization
Disaggregating the value chain requires standards
47. Dynamic capabilities in ecosystems
Creating & capturing value from innovation & sustaining continuous
capability building is the essence of dynamic capabilities and provides
the wider aperture lens that is needed for ecosystem competitiveness
47
Value
(Sensing)
Capturing
Creating
Value
(Seizing)
PROFITS
Ordinary
capabilities
Seizing
opportunities
to capture
value
Ecosystem competitiveness
Resources
Ecosystem
mission
Sensing
opportunities for
value creation
(through R&D
and ecosystem
collaboration)
Transforming and
reconfiguring
complementary
assets for
continuous
capability building
49. The first step in Dynamic Capabilities is
to test the relevance of implicit
principles of strategy & organization
49
New DynCap
Principles
Present
Principles
Present
System
Future
System
Predicament
Assessment
50. WHY DO WE CHALLENGE THEM?
Sensing:
Unmasking
Orthodoxies
THEY DEFINE THE “RULES OF THE GAME”
in our company and in the industry
THEY BECOME SELF-IMPOSED BOUNDARIES
on how we compete
THEY CAN BLIND US
to emerging business opportunities
1
2
3
51. Industry map help with sense-
making
Helps one VISUALIZE THE COMPETITIVE
LANDSCAPE and expose our orthodoxies
where and how we compete
Helps one gain INSIGHT INTO THE BUSINESS
MODEL OF COMPETITORS, both current and
potential
Enables one to begin ENVISIONING POSSIBLE
FUTURE OPPORTUNITIES – by exposing “white
spaces” and finding innovative new
opportunities and directions.
1
2
3
52. Redefining competition in university
education
International
presence
Profile of
educators
Content Taught
Use of technology
Location of
Instruction
Student Profile
To support
basic operations
To support
education
Integral part of
business model
On campus
At satellite
campus
Virtual instruction
18-22
college
Kids only
Adult
Students only
Post-
Grads and
undergraduates
Standardized
Content
Diverse,
customized
content
Professionals
Who work
During day
Mostly
PHds
Domestic
locations
only
Attract int’t
students
International
Locations
Mix of standardized
& customized
Source of learning
Peer to peer
Learning groups
Professor
Is key
knowledge
source
Mainly full time
professors; some
Adjunct profs.
Traditional
Competitor
University of Phoenix
Source: Gary Getz, Strategos
53. SENSING: WHAT IS A CUSTOMER
INSIGHT?
An unmet or unarticulated need or
frustration, which can lead to the
identification of a new opportunity
A Customer Insight redefines the
combination of:
• Who (consumer target, segment)
• What (unmet need, benefit)
• Why (why does the consumer have this
need?)
Customer
Insights
Source: Gary Getz, Strategos
54. Valuable insights are grounded
in needs that lie under the
surface
UNARTICULATED
The customer settles or works around it.
UNDERAPPRECIATED
The industry hasn’t seen this as important.
UNDERLEVERAGED
Our capabilities can have a greater impact.
1
2
3
Source: Gary Getz, Strategos
55. Seizing: Technology
commercialization advisory
activities involves addressing in
parallel
Testing key hypothesis behind new business concepts
Cycles of experimentation
Repeatedly refreshing business concepts and models to
incorporate what we are learning
The dynamic capabilities business brief
Building the infrastructure for commercial launch
The build phase
Copyright D.Teece 2017 55
56. What is required for “seizing” is a highly
disciplined approach based on core design
principles
Don’t wait too long for commercial launch
Close key knowledge gaps through targeted capabilities
assessment and rapid experimentation
Focused on most critical hypotheses
Disaggregated elements of the business model and require
an exchange of value with the participant
Be able to answer key questions at every point
Who is the customer and what is the value proposition?
What are our intended business and profit models?
How will the client win vs. competition?
57. Steps to achieve sustainable
business models
Copyright D.Teece 2017 57
60. Tools: Business Model Action Lab
Process:
Details an idea selected from a key strategic area
Participants the core team, invited experts, and advisors
Workshop session to define the customer, the value
proposition, and operating, and economic models
Results:
Idea converted into a full business concept
Often, novel ideas as a result of stretching/challenging
Key unknowns identified to feed into the experiment design
process
Input to develop a pitch document for senior management
Source: Gary Getz, Strategos
61. AGILE SEIZING:
“LEARNING BEFORE EARNING”
TEST
BUSINESS MODEL
ASSUMPTIONS
PRIORITIZE LEARNING OVER INVESTMENT TO DE-RISK AND ACCELERATE
RUN
PILOTS
EXPERIMENT
IN MARKET
LAUNCH AND
SCALE
1 2 3 4
Source: Gary Getz, Strategos
62. Experimentation is important to reduce the risk of an
opportunity before recommendation that the business to
commit significant resources
All information
about the business
is certain
No information
about the business
is certain
Level of
commitment is high
Level of
commitment is low
Source: Gary Getz, Strategos
63. Good transformation assistance works
the consultant out of a job;
63
time
leading
coaching
mentoring
learning
learning/leading
leading Client
Experience
Strategos
Involvement
WAVE 1 WAVE 2 WAVE 3
Source: Gary Getz, Strategos