Technologie und Innovationsmanagement (Subject) / 5. Organizing Innovation (Lesson)

Kapitel 5

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• What is the difference between the organizational structure and process structure? Organizational Structure: Analysis of subtasks of task executers and the relation between them, the focus is on the rational aggregation and coordination of tasks Process Structure: Specifies the chronological order of tasks, smart time coordination/synchronization of subtasks
• Advantages and disadvantages of different organizational for R&D: Decentralized Model of R&D +Close to the market +Flexibility +Allows cross-functional coordination +Immediate response to market changes -Redundancy, no synergies across businesses -"Application Closeness" - neglecting the risk of long-term goals
• Advantages and disadvantages of different organizational for R&D: Centralized Model of R&D +knowledge concentration +cost advantages +Coordination +Support of long-term goals -"Ivory tower effect" -Transfer problems in project implementation - "Happy engineering" - inefficient/ Ineffective
• Advantages and disadvantages of different organizational models for R&D: Separate Service Units of R&D + Clear responsibilities for innovation + Development of specific skills - Insufficient resources - No basis for long-term R&D platforms
• A mechanistic or an organistic structure are sutable for different environments: Mechanistic Task Definition: Rigid and highly specialized, well-defined goals, exact job descriptions Coordination & Control: Clearly defined bureaucracy, hierarchy, centralization of decisions on top management level Communication: Mainly vertical Commitment & Loyalty: To immediate superior Environmental Context: Stable with low technological uncertainty
• A mechanistic or an organic structure are suitable for differen environments: Organic Task Definition: Rflexible; less specialized, unclear, short-term goals, no final task assignments Coordination & Control: Controlling, authority and communication is done in a complex interaction network (not based on superiority), Personal dependent organization Communication: Horizontal and vertical Commitment & Loyalty: To the organization and its goals and values, Problem-oriented thinking Environmental Context: Dynamic, ambiguous, technological uncertainty
• Being only an exploiter or only an explorer is dangerous Overemphasis on existing competences (exploitation): Overemphasis on improving existing products reduces learning of new skills leading to obsolescence Overemphasis on new competences (exploration): Overemphasis on exploring new competences risks spending scarce resources with very little payback Companies that only explore may not survive today, companies that oly exploit may not survive tomorrow
• Definition: Exploitation "such things as refinement, choice, production, efficiency, selection, implementation, execution" The focus is on reducing variety, increasing efficiency, and improving alignment to current environments (short-term performance)
• Definition: Exploration "things captured by terms such as search, variation, risk taking, experimentation, play, flexibility, discovery, innovation." The focus is on seeking variety and increasing adaptability (longterm performance)
• What provides optimal performance esp. in dynamic environment? A balance between exploration and exploitation
• What demands on organizational structure and leadership does exploitation pose? (6) Follow the rules and drive out the variance and slack Focus on serving existing customers and their needs Manage and refine existing compentences Make money now Will more likely lead to incremental innovation Profits from a more mechanistic organization
• What Terms are associated with exploitation? Refinement, control, production, efficiency, selection, implementation, execution, disciplined Management, elimination of variance, short-term focus
• What fundamentally different demands on the organizational structure and leadership does exploration pose? Break the rules and promote variance and slack Serve new customers with new needs Develop and lead new competences Make money later Will more likely lead to radical innovation Profits from a more organic organization
• What terms are associated with exploration? search, variation, experimentation, play, flexibility, discovery, innovation, risk taking, tolerant of failure, longterm perspective
• What is so good about ambidextrous organizations? Ambidextrous organizations are aligned and efficient in their management of today's business demands, while also adaptive enough to changes in the environment that they will still be around tomorrow.
• What do you know about sequential ambidexterity? Sequential ambidexterity means that phases of exploration and exploitation alternate over time Long periods of exploiting punctuated by short bursts of exploration response to dramatic external or internal change More useful in stable, slower moving environments often the case in the evolution of star-ups because of the lack of resources to simultaneously pursue exploration and exploitation
• What do you know about structural ambidexterity? Structural ambidexterity means establishing structurally independent units following a common vision and goals Establish project teams that are structurally independent units, each having its own processes, structures, and cultures, but are integrated into exisitng management hierarchy Requires that the two types of business are held together through senior management team Requires integration, common vision and values, and common senior-team rewards
• What do you know about contextual ambidexterity? Contextual ambidexterity is the behavioral capacity to simultaneously demonstrate alignment and adaptability. Contextuals Ambidextrius individuals... take initative and and are alert to opportunities beyond the confines of their own jobs are cooperative and seek out opportunities to combine their efforts with others are brokers, always looking to build internal linkages are multi-taskers who are comforable wearing more than one hat
• How is ambidexterity achieved in Structural ambidexterity and how in contextual? Exploration and exploitation activities are done in separate units vs. individual employees divide their time between explorative and exploitative activities
• Where ist the decision made about the split between exploration and exploitation in structural and contextual ambidexterity? At the top of the organization vs. On the front line - by salespeople, plant supervisors, office workers
• What is the Role of top management in structural and contextual ambidexterity? Define structure, nake trade-offs between exploration and exploitation vs. develop organizational context in which individuals act
• What are the nature of the rolses in structural vs. contextual ambidexterity? Relatively clearly defined vs. relatively flexible
• What about the skills of employees in structural vs. contextual ambidexterity? more specialists vs. more generalists
• A balance between exploration and exploitation can be also achieved by... a good portfolio management Innovation leadership strategy vs Project portfoli success Successfully innovationg firms protect their projects against canibalization
• The ideal version of a project portfolio management seems siple enough (name the 5 steps) Idea generation, strategic fit Selection & consolidation Decision at the Gate Coordination, Controlling, Leverage Synergies Benefit Realization
• But its different in real life, what ere the 3 root causes? Lack of goal &decision making clarity Lack of transparency over project portfolio Lack of responsiveness & pro-activeness
• But it is differen in real life, what does happen in real life? (14) Ideas are not identified or forgotten No or delayed decisions Too many projects in parallel Synergies are not discovered Ad-hoc initiated projects Projects on fast track Projects do not contribute to strategy Projects do not follow the official decision path "Bootlegging" Projects Project delay and budget overrun Unexpected termination/ resource conflict "Matrix-Conflicts" Projects benefits are not realizes Too many incremental innovations
• What are the three main objectives in portfolio management? Is it easy to manage these 3 objectives? Maximize Value of portfolio Balance of projects Strategic Alignment of projects There may be conflicts and trade-offs between these three objectives, portfolio success must therefore be multi-dimesional
• Name the four generic phases with different objectives Project Portfolio Structuring Resource Allocation Project Portfolio Steering Value Realization
• What are the objectives of the project portfolio Structuring? Selection of project portfolio Transfer company strategy to project portfolio and make an optimal project selection regarding value potential and the exploitation of synergies
• What are the objectives of the Resource Allocation Allocation of necessary resources Implement goal project portfolio regarding (human) resources, utilize the available capacities ideally and secure long-term capacity to act.
• What are the objectives of Project Portfolio Steering Project portfolio analysis & reporting Create transparency through continuous monitoring of the project portfolio in order to react flexibly to changes and to realize synergies and opportunities through coordination of projects.
• What are the Objectives of the value realization? Benefits assessment & securing knowledge Secure usage and exploitation of project benefits by the project customers and secure generated knowledge acquired in projets for the organization
• What two different classical portfolio approaches exist? Portfolio by McKinsey (Market Portfolio, Technology Portfolio and comprehensive portfolio) The Growth share Matrix by BCG (relative market growth, relativ market share: Poor dog, cash cow, question mark, star)
• Name the two succes factors in portfolio structuring. Then the 3 underpoints of the first and the 2 of the second. Strategic clarity: Clearly Formulated Strategy, Horizontal Integration of Stakeholders, Vertical Strategic Integration Operational Clarity and Validity: Formalized Prioritization, Business Case Validity
• What is a clearly formulated Strategy? Formulation of clear and long term goals that are transparent and well communicated and understood
• What is horizontal Integration of stakeholders? Active participation of all relevant stakeholders in the strategic planning process
• What is vertical strategic integration? Close connection between strategic planning and portfolio planning - strategy is broken down to the portfolio level
• Formalized Prioritization A fair transparent and well-accepted process to evaluate and select project proposals and (re-) prioritize existing projects.
• Business Case Validity All projects and proposals are required to have a documented business case, which is intensively scrutinized.
• Name the three success factors in portfolio steering and their (2,2,1) underpoints. Strategic Controlling: Strategic Monitoring, Strategic disclosure Operative Controlling: Monitoring Intensity, Portfolio Agility Value Orientation: Business Case Monitoring
• What is strategic Monitoring? Critical questioning of strategy and continous checking of strategic premises
• What is Strategic Disclosure? Analysis of portfolio for mergent strategic impulses and new investment potentials
• What is Monitoring Intensity? Frequent, continuous, and systematic monitoring of the portfolio
• What is portfolio Agility? Rapid adaption of portfolio to changing conditions (resources, customer needs, technologies)
• What is business case monitoring? Intensive analysis of project business cases also after their approval
• Name the Elements of the Stage-Gate Process (4) Activities: Project team collects information Integrated analysis: Integrated analysis of the project team's results Delivered results: Result of the integrated analysis -> Input for the gate Gate: Go/Kill: Go/Kill/Hold/Recycle decision point
• What are stages? What happens in the stages? - Gather information in order to minimize project risks - Reduce uncertainty faster than costs increase - Activities run in parallel and are carried out by an interdisciplinary team - Each phase in cross-functional: no department is responsible for its own phase but interaction is required
• What are Gates, decribe the 3 Elements of Gates. Deliverables: Results of completed activities, visible and standardized Criteria for Evaluation: - Must-criteria (knock-out questions (checklist)) - Can-criteria (prioritize projects with a score system) Outputs: Decision (Go/Kill/Hold/Recycle) + action plan for the next stage (time limit and released resources) + set deliverables for the next gate
• At what levels can decisions be made with the Stage-Gate process? at the project and portfolio level

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