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Innovationstrategy
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RATIONALIST INCREMENTALIST
STRATEGYAPPROACH
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RATIONALISTAPPROACHAlinearapproach:• APPRAISE:describe,understandandanalyzetheenvironmentbyusingappropriatetools(Scenarioanalysis,SWOT,etc.)andprojecton-goingtrendsintothelongterm
• DETERMINE:determineacourseofactioninthelightoftheanalysis.Determinetheallocationofinvestments
• ACT:carryoutthedecidedcourseofaction3
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RATIONALISTAPPROACH:ADVANTAGES
• Consciousnessofongoingtrendsinthecompetitivearena
• Ensuresufficientattentionisdevotedtothelongterm
• Ensurecoherenceinaction,especiallyinbiganddispersedcorporation
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RATIONALISTAPPROACH:LIMITATIONS
• Acertainstabilityoftheexternalenvironmentisneeded(youcandowhatyou'veplanned);
• Firmsneedtobeperfectlyawareoftechnologicalandmarkettrajectories
• Firmsmustalsobeawareoftheirstrengthsandweaknessesandbereadytodevelopnewresourcesandcapabilitiesthatmeettheirstrategicobjectives
• Excessiveconcentrationonthe"enemy"(competitors)->lackofinterestindiscoveringunmetmarketneeds
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THECONTRIBUTIONOFM.E.PORTER
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INNOVATIONLEADERSHIP
- R&Dandtechdevelop.- Closetothemarket.- ClosetoUniversities,KIBS,etc.- Risktaking- Creativity…
INNOVATIONFOLLOWERSHIP
- Imitatingleaders;- Competitoranalysis;- Costcutting;- Learninginmanufacturing- Reverseengineering
ALTERNATIVEAPPROACHES
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BOOZ,ALLEN,HAMILTONANNUALINNOVATIONSURVEY.SOMERESULTS
• WORLD’S1000TOPLEADINGFIRMS• INNOVATIONSTRATEGIES
– FIRMS’INNOVATIONSTRATEGIESARERATHERINDEPENDENTFROMCOMPETITORS’ BEHAVIORS
– THREEDISTINCTCLUSTERSOFGOODPRACTICECANBEOBSERVED:
• TECHNLOLOGYDRIVERS:focusonscoutinganddevelopingnewtechnologiesandmatchingthesetounmetneeds.
• NEEDSEEKERS: focusonemergingmarketneedsandtrends.Strongdesignandproductdevelopment capabilities
• MARKETREADERS:focusonanalyzecompetitorsandbeingfastfollowers 7
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INCREMENTALISTAPPROACHAstep-by-stepandtrial-and-errorapproach:1. Makedeliberatestepstowardsthestated
objective2. Measureandevaluatetheeffectsofthesteps3. Adjust(ifnecessary)theobjectiveanddecideon
thenextstep4. Bereadytocallintoquestionformerstrategies,
re-designeverythingfromscratchandcannibalizeyourcurrentbusinesses
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INCREMENTALISTAPPROACH
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DEFINEGOALS
IMPLEMENTSTRATEGY
TEST/EVALUATE
ADJUSTGOALS/STRATEGY
RE-TESTEVALUATE…
DATA, FEEDBACKS
DATA, FEEDBACKS
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ADVANTAGESANDLIMITATIONSOFINCREMENTALISTAPPROACH
ADVANTAGES• opentoarangeofpossibilities
• strategicflexibility(alsocalledAGILITY)
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LIMITATIONS• successfulstrategiescouldbeimpossibletoreplicate(non-reproduciblebestpractices)
• strategiesaredifficulttoplansincetherealbeginning
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Strategiesfortransientadvantages
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StrategiesForTransientAdvantages• ThinkaboutArenas,notindustries
– Lookforcompetitorsbeyondtheboundariesofyoursector.Innovateinthesameway!
• Setbroadthemesandthenletpeopleexperiment– Usepropermethodsand“gifted”peopletodiscovertheweaksignalscoming
fromthemarket• Adoptmetricsthatsupportentrepreneurial growth
– From“profitmaximization”to“maximumaffordableloss”• Focusonexperiencesandsolutionstoproblems
– Rememberyoudon’tselljust“products”,butalsosolutionsandexperiences toyourcustomers
• Buildstrongrelationshipsandnetworks– Yourclientsareyourallies.Reinforcetheir“senseofbelonging”toyouroffer
• Avoidbrutalrestructuring,learnhealthydisengagement– Ferryyourclientsfromonesolutiontoanother
• Getsystematicaboutearly-stageinnovation– Managetheinnovationbudgetseparatelyfromthegeneralbudget
• Experiment, iterate,learn– Learnambidexterity.Donotfearexperimentationandfailure
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THEORGANIZATIONALSIDEOFGLOBALINNOVATION
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SPECIALIZATION-BASEDMODEL
Firms develop global centers of excellence in different fields, which are globally responsible for the development of a specific product/process/ technology
INTEGRATION-BASEDMODEL
Different units around the world each contributes to the development of
technology projects
IND
PRC
US
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SPECIALIZATION-BASEDMODEL
ADVANTAGES:• +criticalmassofhumanand
financialresourcesandknowledgeiseasilyachieved
• +coordinationiseasier• +specializedresearchunits
canbeallocatedinglobalinnovationcluster
RISKS:• globalcenterstoomuch
isolated(difficulttogovern)andfarfromemergingmarketneeds
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INTEGRATION-BASEDMODEL
ADVANTAGES:• relyondifferentcultures,
capabilitiesandinternationalperspectives onthesamesubjects
• encouragecompetitionamongcenters
RISKS:• highercoordinationcosts• duplicationandinefficientuse
ofscarceresources risks
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