Transcript Slide 1

Innovation, Standards, and
Mature Organizations
Ted Habermann
NOAA National Data Centers
“There are special management challenges, and I think
that that's an area that we in agencies such as NOAA,
need to spend an extra amount of time on. We have very
talented workers and very talented employees, many of
whom have advanced degrees, and they have been
successful because of certain behaviors in their field.
As you progress through the system in any organization,
you need to develop other skills;…”
Vice Adm. Lautenbacher
Mature Organizations
The Technology S-Curve
We all know that new
technologies emerge slowly,
grow quickly (if they catch on)
and then get replaced. This
common knowledge has been
described as the technology
S-curve.
Luddites
Pragmatists
Why does it exist?
Visionaries
TIME
The Chasm
Moore has described the “chasm” in the
adoption life cycle. He proposes that
many new technologies do not make it
across the chasm between visionaries
and pragmatists. They fall into the
chasm. The technology S-curve with
the chasm might look like:
TIME
Technology Cycle
Technological
Disruption
Selection
Era of Ferment
Dominant
Design
Standards
Disruption #2
(destroys existing
competence)
Network
Effects
Value = f(N2)
(non-compliance
cost increases
with time)
TIME
O’Reilly, C.A. and Tushman, M.L., The Ambidextrous Organizations, Harvard Bus. Rev, April 2004.
Types of Innovation - 1
Sustaining / Incremental Innovation: generally small
innovations in products and processes aimed at existing
customers.
Disruptive / Discontinuous Innovation: significant
innovations generally aimed at unknown or non-existent
customers.
Org A Partnership AB Org B
New
Customers
Unidata Objectives (1998):
Sustaining Innovation
“These objectives either respond to users' current needs or advance
Unidata toward meeting future needs effectively. Most of the "responsive"
items are continuations of current Unidata objectives, and their importance
is well established. But only by looking beyond present needs to anticipate
future ones, and by pursuing the most promising technical advances, can
Unidata remain effective. This is true even though some of these
advances involve uncertainties, and the demand for them may not be
apparent as yet”. Unidata, 2003 Proposal.
Disruptive Innovation
Clayton Christensen, The Innovator’s Dilemma
Unidata (netCDF) Evolution
Disruptive Innovation:
In the Unidata case we
are now seeing the
disruptive switch to Java
play out. The capabilities
of the Java version of the
netCDF libraries have now
surpassed the original C
version.
Java
Customer Metric
Always includes a decrease
in metrics for current
customers so it is difficult
for mature organizations.
Sustaining
Innovation
C
Disruptive
Innovation
TIME
Types of Innovation - 2
Component Innovation:
Making existing
components better.
Architectural
Innovation:
putting existing
components
together in new
ways.
Structure in mature organizations tends to evolve to
match product architectures. Architectural Innovation,
therefore, many times includes elements of organizational
change. This makes it hard.
Innovation & Technology Cycle
Disruptive Innovation
Product Innovation
Design Competition
Community-driven
technology change
Component,
Architectural,
Sustaining and
Process
Innovation
What do we make?
How do we make
it (better)?
TIME
How Standards Change The Game
•
•
•
•
Expanded Network Externalities (Network effect turns on)
Reduced Uncertainty and Risk in Technology Decisions
Reduced Lock-In to Particular Components
Increase Choice for System Developers
Standards shift the locus of competition from systems development to
component development. Specialists tend to thrive in the mix-and-match
environment created by interface standards. Generalists and system
(stovepipe) developers tend to thrive in the absence of standards.
In the absence of standards:
1) there is no architectural innovation (no mix-and-match) and
2) the organization can not benefit from component innovation.
Once a standard has been agreed on (selection), the organization
benefits from component innovation and architectural innovation.
Why No Standards?
The longer the market takes to determine a standard,
the more expensive it will be for firms operating within
that market.
Do we consider the costs of not using standards?
The difficulty with this reasoning is that it is difficult
for individual firms to determine how expensive or how
long it will take the market to determine the dominant
standard. Nor are companies willing to cede control of
such an important aspect of their market early in a
competition. Booz Allen Hamilton, 2005.
The science community generally values sharing results
more than they value sharing data.
Organizational Capabilities
Not the sum of individual capabilities
Resources
Money and
people
Processes
Values
Organizational
boundaries facilitate
current processes
Current processes have
worked in the past
Easy
Change?
Management
Clayton Cristensen, Capabilities, Innovator's Dilemma
Priorities
that
drive
everyday
decisions
Hard
Leadership
Values Statements
Adage- a proverb or wise (?) saying made
familiar by long use.
"Our group has particular needs, and our
standards process is tailored by pragmatic
demands."
"My data are special and my users have special
needs."
"Our great advantage is that we sponsor a large
pool of innovators"
We are here
and life is good!
TIME
Stovepipe Value
stove pipe systems n. systems developed in an isolated
environment to solve narrow goals or meet specific needs
in a way not readily compatible with other systems.
Organizations can also be stovepiped:
"A decade earlier, Dan Goldin had
sought to give more authority to the
field centers. The net result was what
came to be called "stove piping" where
all centers began dueling fiefdoms - all
intent on having their own mini-NASA
complete with efforts which
unabashedly duplicated those resident
at other centers." NASA Begins to
Transform Itself, SpaceRef.com, June 24,
2004
Good people, wrong process /
values / team structures
The reason why innovation often seems to be so
difficult for established firms is that they employ
highly capable people and then set them to work within
processes and values that weren't designed to
facilitate success with the task at hand. Ensuring that
capable people are ensconced in capable organizations is
a major management responsibility in an age such as
ours, when the ability to cope with accelerating change
has become so critical.
Clayton Cristensen, Coping With Your Organization’s Innovation
Capabilities, in Leading For Innovation and Organizing for Results
What Team Structure?
Autonomous
Mainstream
Heavyweight
teams
Fit With Organization’s
Processes
New
Where are
Integration
Efforts?
Lightweight
teams
Functional
organization
Customary
Poor (disruptive)
Strong (sustaining)
Fit With Organization’s Values
Clark and Wheelwright, Organizing and Leading “Heavyweight” DevelopmentTeams, 1992.
Structure of Development Team
Position of Responsible Structure
Team Structures
Functional Team Structure
FM
FM
NWS
Lightweight Team Structure
FM
NESDIS
FM
NMFS
Functional
Manager (FM)
FM
NOS
FM
OAR
FM
NWS
NESDIS
FM
NMFS
FM
FM
NOS
OAR
L
L
Working
Level
L
Markets
L
L
Project
Manager (PM)
and Area of
Influence
Liaison (L)
Heavyweight Team Structure
FM
FM
NWS
L
NESDIS
L
FM
Autonomous Team Structure
FM
FM
FM
NMFS
NOS
OAR
L
L
L
NWS
FM
NESDIS
FM
FM
FM
NMFS
NOS
OAR
L
L
L
PM
PM
Market
L
L
Market
From Clark and Wheelwright, 1992, Organizing and
Leading “Heavyweight” Development Teams
Extent of agreement on what people want
No consensus
Broad consensus
What Tools?
Microsoft, 1995
Apple
Wanted desktop
domination, not
sure how to get it.
Consensus
can become religion
& resist change
Contractors
Balkan Peninsula
Generally not driven by
same goals, but willing (?)
to follow SOP
No consensus
Broad consensus
Extent to which people agree on cause and effect (how to get there)
Christensen, C., M. Marx, and H. H. Stevenson, The Tools of Cooperation and Change, Harvard Business
Review, Oct. 2006
Extent of agreement on what people want
No consensus
Broad consensus
Diverse Tools
• Folklore
• Charisma
• Vision
Leadership
• Salesmanship Tools
• Religion
• Rituals
Culture
• Tradition
Tools
• Democracy
• Apprenticeship
• Role Modeling
• Strategic Planning
• Negotiation
• Role Definition
Power
• Fiat Tools
• Threats
• Coercion
• Financial
Incentives
• Transfer Pricing
• Hiring and
Promotion
Management
• Measurement
Tools Systems
• Control Systems
• Training
• Standard Operating
Procedures
No consensus
Broad consensus
Extent to which people agree on cause and effect (how to get there)
Christensen, C., M. Marx, and H. H. Stevenson, The Tools of Cooperation and Change, Harvard Bus. Rev, Oct. 2006
Organizational Challenge
A new business with high growth potential (let’s call it
NewCo) rarely coexists gracefully with the most closely
related established business unit within the company
(let’s call it CoreCo). The unnatural combination creates
three specific challenges for NewCo: forgetting,
borrowing, and learning.
• NewCo must forget some of what made CoreCo successful,
because NewCo and CoreCo have elemental differences.
• NewCo must borrow some of CoreCo’s assets—the greatest
advantage it has over independent start-ups.
• NewCo must be prepared to learn some things from scratch.
10 Rules for Strategic Innovators: From Idea to Execution, Vijay Govindarajan and Chris Trimble, Harvard Business
School Press, Boston, MA. 2005
Silo Busting
Coordination - Individual units are historically focused on
perfecting their products and processes, and give little thought to
how their offerings might be more valuable when paired with those
of another unit… While cross-silo teams and processes can be
effective, they are not easy to implement. A history of independence
often leads to protectionist behavior.
Culture of Cooperation - At least half the battle of promoting
cross-silo cooperation lies in the "Softer" aspects of culture,
including values and the way the company communicates them… Of
course, the softer measures won't take hold if the harder ones power structures, metrics and incentives - don't reinforce them.
Capability Development - Regardless of the incentives and
cultural elements in place, employees will fall back on their old
competencies and ways of thinking if they havn't developed new
skills… Old habits die hard.
Silo Busting: How to Execute on the Promise of Customer Focus, Ranjay Gulati, Harvard Business Review, May 2007
Leadership Model: Positive Deviance
Positive deviance says that if you want to create change, you must
scale it down to the lowest level of granularity and look for people
within the social system who are already manifesting the desired
future state. Take only the arrows that are already pointing toward
the way you want to go, and ignore the others. Identify and
differentiate those people who are headed in the right direction.
Give them visibility and resources. Bring them together. Aggregate
them. Barbara Waugh
[email protected]
References & Background
Booz Allen Hamilton, Geospatial Interoperability Return on Investment Study, 2005,
http://gio.gsfc.nasa.gov/docs/ROI%20Study.pdf.
Christensen, C., The Innovator’s Dilemma, Harvard Business School Press, 1997, 225p.
Christensen, C., M. Marx, and H. H. Stevenson, The Tools of Cooperation and Change, Harvard Business Review,
Oct. 2006.
Clark and Wheelwright, Revolutionizing Product Development, The Free Press, New York, 1992, 364p.
Govindarajan, V. and C. Trimble, Building Breakthrough Businesses Within Established Organizations, Harvard
Business Review, May 2005, p. 58-68.
Lautenbacher, C., Business of Government Radio Interview,
http://www.businessofgovernment.org/main/interviews/bios/conrad_lautenbacher_frt.asp, 2005.
Moore, G., Crossing the Chasm, Marketing and Selling High-Tech Products to Mainstream Customers, Harper
Business, 1991, 211p.
O’Reilly, C.A. and Tushman, M.L., The Ambidextrous Organizations, Harvard Business Review, April 2004.
The Positive Deviance Initiative, http://positivedeviance.org/
Pascale, R.T. and J. Sternin, Your Company’s Secret Change Agents, Harvard Business Review, May 2005, p. 7281.
Tushman, M.L., Anderson, P., and O’Reilly, C.A., Technology Cycles, Innovation Streams, and Ambidextrous
Organizations: Organizational Renewal Through Innovation Streams and Strategic Change, in Managing
Strategic Innovation and Change, Tushman and Anderson, eds., Oxford University Press, New York, 1997, 657p.
Innovation, Standards & NOAA
There is a considerable innovation literature that can help NOAA learn the
new skills required to innovate strategically and effectively.
Technology is evolving from a computing tool to a communication tool. It is
becoming an infrastructure technology.
Standards are critical to building value of infrastructure technologies.
Standards are critical to organizationally effective component and
architectural innovation.
NOAA must develop and use processes for selecting and participating in
standards communities.
The requirements and approaches to planning are very different in the
different phases of the technology cycle.
Understanding and explicitly recognizing the differences in phases of the
technology cycle and the differences in balance between management and
leadership skills might help NOAA.
Functional Team
FM
FM
FM
FM
FM
Functional Manager
Working Level
Markets
Members work completely in their
principle function
Member tasks are coordinated by
respective managers
Primary responsibility for project is
passed from one function to another
Strength: depth of experience,
clear career path, well suited to
tasks
Weakness: similar solutions (lack of
breadth), bureaucratic, not project
oriented
Lightweight Team
FM
FM
FM
FM
Functional Manager
FM
Working Level
Project Manager
and area of
PM
influence
L
L
L
L
L
Liason
Markets
Project manager works with
department liaison
Coordinates the tasks and
responsibilities of the team
(encourages, pleads)
Strength: better coordination
to ensure project completion,
better communication.
Weakness: weak project leader,
weak focus for members.
Heavyweight Team
FM
FM
FM
FM
FM
Project Manager
and area of
influence
PM
Functional Manager
Working Level
L
L
L
L
L
Liason
Markets
Project manager understands
integrated market and has
direct control over team
member tasks
Core group members work with
project manager and functional
members
Strength: strong project focus,
ownership and commitment of
team members
Weakness: generalistic problem
solving, hard to staff, breaks
down functions
How to Forget
•Don’t be insular.
•Don’t assign status based on size.
•Rearrange the moving parts.
•Build a new dashboard.
•Dare to make complex judgments.
•Promote new thinking about success.
How to Borrow
•Balance the yin of forgetting with the yang of
borrowing.
•Find common ground.
•Be careful what you ask for.
•Co-opt CoreCo.
•Be alert to tremors.
•Force authority uphill.
How to Learn
•Don’t try to mix oil and water.
•Protect predictions.
•Avoid being defensive.
•Do less, faster.
•Analyze through a new lens.
•Measure what you don’t know.