Transcript L2: Venture Team Management EC10: Innovation & Commercialisation

L2: Venture Team
Management
EC10: Innovation & Commercialisation
What it Takes to be a Leader and
Manage Change
Marcus Thompson
[email protected]
Venture Team Management Outline
1. Managing Innovations
 2. Organisations Built to Innovate
 3. The Technology Commercial
Paradigm
 4. Change Management

2. Team Management
2
1. Managing Innovations
Perspectives on Commercial &
Technical Innovation
Innovation DNA
"successful organisations develop a
culture of change that just keeps moving.“
Kanter 1999
– Context
– Leadership
– Core Values
– Culture
www.thinksmart.com
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Forms of Innovation
New products
– either radically new or which extend the product
lifecycle.
Process innovation
– leading to reduced production costs, and affected
partially by the learning and experience effect.
Marketing Innovations
– increase differentiation.
Organisational Changes
– reduce costs or improve, total quality.
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Technology Perspectives
Technology Innovations
– exploitation of new ideas – incorporating new
technologies, design and best practice is the
key business.
Commercial Innovation
– Venture management strategies and
structures that bring these new technologies
to market.
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Commercial Innovation
Commercial Innovation is about doing things
new or different (from your competitors).
– It is a management process that centres on being
creative & visionary.
– It presents itself as the ability to filter and then
commercialise.
– It applies to:
new products
new business practices
new market applications
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Commercial V Technical Innovations
 These
are the skills of the
entrepreneur.
 Are they the skills of the scientist?
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FORMS
Commercialisation and technology transfer
takes many forms:
–
–
–
–
Licensing technology
Spinout company formation
Collaborative research and TT projects
Faculty/student/industry exchange and internship
programs
– Consultancy/applied research
– Teaching, education and outreach programs
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Key Success Factors for Innovation
Sustainable Business Model
Architectural Linkages
– Social, technical & commercial
An Entrepreneurial Team to balance science &
commerce
Global perspective
Adaptive use of technologies & business
processes to meet a specified market need.
Customer-centred players – niche rather than
segment.
Exit strategies.
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New-Product Development Management
Top Level
Support
Authority
Key
Issues
Market-Guided
R&D
Integration &
Coordination
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Approaches to Innovation
OLD STYLE
–
–
–
–
–
–
–
–
NEW STYLE
Physical creativity center
Focus on idea generation
Employee-oriented
A dedicated change agent’s
project
Training and facilitation
Individual and monetary
rewards
Small group creativity
Leaders passively supportive
– Innovation resources as part of
business units
– Focus on business strategy and
creating value
– Customer-centred
– A team-created innovation
culture
– Coaching and project team
involvement
– Team recognition
– Tools scalable to organisation
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Un-innovation
Product Development & Brand
management is the sole
responsibility of the Chief
Executive
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2. Organisations Built
to Innovate
How to manage
knowledge by building a
flexible organisation
The Importance of Knowledge

we live in the age of the ‘knowledge worker.’
Education, education, education – the usefulness of any given skill set will change several
times over people’s lifetimes. Therefore, the skills of
‘learning to learn’ are vital throughout an adult’s lifetime
– the information explosion means that there is much
more ‘information’ easily available, but little or no
guidance in how to tell the good from the bad
– the information explosion also means that ‘information’
need not be processed if it serves only a temporary
purpose, e.g. downloading an essay for an exam
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Knowledge & Creativity

Depend on Diversity
– If the business system becomes homogeneous, it becomes
vulnerable to environmental shifts. It will no longer work in
a new environment and the entire system is at risk.

Building on participation is not optional
– In a turbulent environment, it is important that the founding
team engage everyone who’s going to be affected by
change.

Develop a sense of shared meanings and
– This is a paradox. It is the unity of diversity that can be used
to unify an organisation.

Meaning engages creativity
– When people become interested in an issue their creativity is
instantly engaged. For people to innovate they must buy into
something that has meaning for what they do.

Reinvent Business Process to Match Creativity
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Drucker on Entrepreneurial
Organisations

`Entrepreneurship is based upon the same
principles, whether the entrepreneur is an
existing large institution or an individual starting
his or her new venture single-handed. It makes
little or no difference whether the entrepreneur is
a business or a non-business public-service
organisation, nor even whether the entrepreneur
is a government or non-government institution.
The rules are pretty much the same, and so are
the kinds of innovation and where to look for
them. In every case there is a discipline we might
call Entrepreneurial Management. 'Druker, P. F. (1985)
Innovation and Entrepreneurship, New York: Harper Row.
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Entrepreneurial Organisations
“Creating the entrepreneurial organisation
is about encouraging opportunity seeking
and innovation in a systematic manner,
always questioning the established order,
seeking ways to improve and create
competitive advantage. It is about
encouraging the qualities enjoyed by
successful entrepreneurs such as vision
and drive. It is about learning new ways to
manage organisations involving
relationships and culture. It is about new
ways of dealing with risk, uncertainty and
ambiguity so as to maintain flexibility.
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Organisations (continued)
“It is about institutionalising a process of
continuous strategising, learning from
customers, competitors and the
environment. It is about encouraging
change and managing rapid growth.
“And it is about doing these things throughout an
organisation so that it reflects the entrepreneurial
characteristics of its managers - responding
quickly and effectively to opportunities or
changes in the market place. Burns, P, The
Entrepreneurial Organisation, 2002
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“ The power of the team

Is so great that it is often wise to violate
common sense and force a team structure
on almost anything…companies that do so
will achieve a greater focus, stronger task
orientation, more innovation and
enhanced individual commitment..” Tom
Peters, Thriving on Chaos.
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Teams
 Groups
of individuals
– bound together by a common goal
– different perceptions of that goal &
how it can be delivered
– different interests
– conflict as dynamic tension
– coordination & the big picture
– task orientation
– change & creativity
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The problem of teams
 Interpretation
 Mediation
 Difference
 Denial
of difference
 Conflict
 Marshalling resources
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Teams Roles
 Spectators
 Participants
 Spectators
as participants
 Participants as spectators
 The performance
 The spectacle
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Balancing Team Types

Co-ordinator (Chairperson)
– Traits: Stable, Dominant, Extrovert

Shaper (social leader)
– Traits: Anxious, Dominant, Extrovert.

Plant
– Traits: Dominant, Very High I.Q., Introvert

Monitor Evaluator
– Traits: High IQ, Stable, Introvert.
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Implementer (Company Worker)
– Traits: Stable and Controlled.

Resource Investigator
– Traits: Stable, Dominant, Extrovert.

Team Worker
– Traits: Stable, Extrovert, Low in Dominance.

Complete Finisher
– Traits: Anxious, Introvert.
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3. The Technology
Commercial Paradigm
Avoiding the Valley of Death
High-Tech Firms in UK
 Conceptual as well as methodological problems in devising an
appropriate definition of high technology activities (Aydalot and
Keeble, 1988; Goss and Vozikis, 1994).
 Research on ‘technological innovation’ equates the term with
‘high technology’.
 Technology & Innovation are closely linked by policy makers.
 Debate surrounds the industries that can be regarded as
technologically innovative.
 Butchart (1987) has presented a ‘process’ based classification
of high technology sectors. He identified several Standard
Industrial Classification (SIC) sectors (Central Statistics Office,
1979) with:
• Above average R & D intensity; and
• Above average proportion of scientists, professional engineers
and technicians.
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Paradigms
 An incremental evolution
– progressively position an organisation and its innovation
to take advantage of changes in a marketplace. This is
sometimes referred to as continuous innovation.
 An revolutionary paradigm
– Change fundamental industry assumptions, create new
solutions to solve customer problems and in so doing
create a brand new product or set of applications.
– Known as discontinuous innovation.
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Diffusion Theory
 Characteristics Rogers identified in Innovators
– venturesome, desire for the rash, the daring, and the risky,
– control of substantial financial resources to absorb possible loss
from an unprofitable innovation.
– the ability to understand and apply complex technical knowledge,
and
– the ability to cope with a high degree of uncertainty about an
innovation.
 Characteristics Rogers identified in the Early Adopters:
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–
–
–
–
integrated part of the local social system,
greatest degree of opinion leadership in most systems,
serve as role model for other members or society,
respected by peers, and
successful.
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Diffusion Theory
 Characteristics Rogers (1962) identified in the Early Majority:
– interact frequently with peers,
– seldom hold positions of opinion leadership,
– 1/3 of the members of a system, making the early majority the largest
category.
– deliberate before adopting a new idea.
 Characteristics Rogers identified in the Late Majority:
–
–
–
–
one-third of the members of a system,
pressure from peers,
economic necessity,
sceptical and cautious.
 Characteristics Rogers identified in the Laggards:
–
–
–
–
–
–
possess no opinion leadership,
isolates,
point of reference in the past,
suspicious of innovations,
innovation-decision process is lengthy, and
resources are limited.
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 Rogers defines the diffusion process as one
"which is the spread of a new idea from its source
of invention or creation to its ultimate users or
adopters".
 Rogers differentiates the adoption process from
the diffusion process in that the diffusion process
occurs within society, as a group process;
whereas, the adoption process is pertains to an
individual.
 He defines "the adoption process as the mental
process through which an individual passes from
first hearing about an innovation to final adoption".
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Adoption

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
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
awareness,
interest,
evaluation,
trial
adoption.
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Rejection
 an innovation may be rejected during any
stage of the adoption process.
– disenchantment discontinuance - a decision to
reject an idea as a result of dissatisfaction with
it's performance, and
– replacement discontinuance - a decision to
reject an idea in order to adopt a better idea.
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Innovation Decision Process
 Rogers identifies 5 Stages
– from first knowledge of innovation
 Awareness knowledge is information that an innovation exists.
 How-to-knowledge consists of the information necessary to use
an innovation properly, and
 Principles knowledge consists of information dealing with the
functioning principles underlying how the innovation works.
–
–
–
–
forming an attitude toward the innovation,
to a decision to adopt or reject,
to implementation of the new idea,
to confirmation of this decision.
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Early Knowers
 Earlier knowers of an innovation have more formal
education than later knowers.
 Earlier knowers of an innovation have higher
socioeconomic status than late knowers.
 Earlier knowers of an innovation have more exposure to
mass media channels of communication than later
knowers.
 Earlier knowers of an innovation have more exposure to
interpersonal channels than later knowers.5Earlier knowers
of an innovation have more change agent contact than
later knowers.
 Earlier knowers of an innovation have more social
participation than later knowers.
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Success in Innovation
 `success' in innovation is not simply a matter of
moving a resource from A to B, but "the capability
on the part of the recipient to do something useful
with that resource", in other words, to innovate
effectively. Mark (Dodgson and Bessant 1996)
 initial recognition of opportunity or need,
–
–
–
–
–
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search,
comparison,
selection,
acquisition,
implementation, and
long-term use (involving learning and development).
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4. Change Management
Traditional Approach
 Develop a Mission statement.
 Establish objectives.
 Analyse market segments to determine.
competitive advantage.
 Bring capacity in line with competitive
advantage.
 Deliver goods and services in line with
long term plan.
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Why Organisational Change?
 Technological
obsolescence
 Political and social
events
 Increasing size and
complexity of an
organisation
 People: new
leadership, new
entrants to the
organisation, etc
 Internationalisation of
business
 Government legislation
 Environment
 Business relationships:
alliances, acquisitions,
etc.
 Strategic Drift
 Life cycle differences
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Strategic Drift
 Occurs where a firms strategy does not
‘fit’ or moves away from changes to its
operating environment
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Watch out for . . .Strategic
Drift
Strategic
Drift
Environmental
Change
Organizational
Change
Key is to “integrate internally
and adapt externally”. Occurs
when Resources and Value are
mismatches to Environment.
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Time
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Symptoms of Strategic Drift

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Highly homogenous paradigm/culture
Strong power blockages to change
Lack of market information
Little toleration of questioning/challenge
“We’ve tried this before and it didn’t work”
Deteriorating performance
Reliance on price/cost /competition
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Handling Disturbance
 “Strategy is first and foremost about the form of total control
system which will enable the business owner to handle
strategic disturbance effectively, a control system which is
inevitably characterised by fundamental antithesis.
 Strategy is not about a comprehensive and integrated set of
actions or routes to objectives. It is about a comprehensive
and integrated total control system, which will enable the
owner manager to deal with unforeseeable disturbances,
changes in competitive advantage and capability as they
occur. The starting point is not the mission, and certainly not
detailed long term objectives, but the appropriate style of
control.” (Stacey, 1989).
 Control is not just monitoring. It is:
 Having a purpose and a route to it (planning).
 Checking progress (monitoring).
 Taking corrective action.
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Strategic Analysis
 The capability (or otherwise) of the organisation to
exploit present and future environmental opportunities
and/or to withstand environmental threat.
 The ways in which resources might be changed to
create competitive advantage and to improve the
organisation's wealth producing capacity.
 Congruence: Environment, Values, Resources
 Resources are Strengths & Weaknesses
 Values are Leadership & Culture
 Environment is Opportunities & Threats (Thompson J,
2002)
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Examples of Strategic
Drift
 The introduction of new technology into a business that fails
to reach its stated objectives. This is due to the failure to
prepare the people within the organisation for its efficient
use through prior communication, training, or a system of
modified rewards.
 The appointment of a "today" manager who has the
necessary skills, attitude and management style, but is not
provided with the financial resources to exercise those
talents.
 Jobs redesigned around teamwork but with traditional bonus
systems maintained.
 Customers wanting variety and regular product
modifications but technology designed to produce one
standard model.
 The environment demanding responsive organisation
modes but the organisation
is maintaining previously
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effective bureaucratic forms.
Strategic Dilemmas
Build on Past
v
Learn from Past & Realign
Deliberate Strategy
v
Emerging Strategy
Hands-on leadership
v
Direction only leadership
Build on strengths
v
Search out new opportunities
Differentiate for high value added
v
Beat competition on costs
Diversify
v
Focus
Size for critical mass
v
Small & Entrepreneurial
Profit for shareholders
v
Consensus Outcome
Mass market
v
Niche market
Global
v
Local
Culture of stability
v
Culture of chaos through innovation
Centralised for control
v
Decentralised for flexibility
Relying on logic & following
v
Being creative and pioneering
v
Incremental change
Revolutionary Change
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Adapted from
Thompson
J, 2002
for many stakeholders
45
Efficiency & Effectiveness
 External growth Strategies Concentration on
market penetration or specialisation (Sticking to
the knitting)





Market Development
Product Development
in any of the above
Disinvestment
Consolidation
 Internal Growth Strategies (Efficiency)



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

Pricing Structures.
Costings.
Supply chain management.
Management Information Systems.
Contracting2.inTeam
& out
of non core operations.
Management
Innovation/R&D.
46
Coping with Modern
Markets
 Revolution
 in the ways industries and markets operate and the sources of
competition which become important, and consequently in the
strategies that successful organizations pursue.
 Reinvention
 in the creation of new business models that make traditional ways of
doing business obsolete as routes to delivering and sustaining
superior customer value.
 Renewal
 in the strategies of change and repositioning by companies whose
business models have become outdated, as they rebuild and respond
to change. Increasingly the priority is not just short-term performance
but building the robustness to bounce back, to change, to survive, to
turn things around.
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Piercey 2004, 276
The Paradox of Revolution and
Evolution
DISCONTINUOUS CHANGE
CONTINUOUS CHANGE
Emphasis on
Revolution over evolution
Evolution over revolution
Strategic change as
Disruptive innovation/turnaround
Uninterrupted improvement
Change process
Creative destruction
Organic adaptation
Change magnitude
Radical, comprehensive, dramatic
Moderate, piecemeal,
Pace of change
Abrupt, unsteady, intermittent
Gradual, steady, constant
Change requires
Sudden break with status quo
Permanent learning and
Environmental jolts
Trigger shock therapy
Require continuous adjustment
Change pattern
Punctuated equilibrium
Gradual development
undramatic
flexibility
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Overlap of Life Cycle for
Products
WINDOWS 98
WINDOWS XP
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1995
1996
49
1997
Early Competitive Strategy:
Product Performance
 In the early stages of the product life cycle,
the rate of product change is rapid and the
margin large.
 Firms with a performance maximising
strategy emphasis the unique products and
performance, often in anticipation that a new
capacity will expand customer requirements.
 Product Performance is driven or stimulated
by market needs and opportunities.
 Product markets are undefined.
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Early Stages
 Performance maximising firms will rely heavily on external
sources of information and more diverse sources of
information.
 Buyers are enthusiasts and visionaries; where the visionary
buyer requires a significant and far reaching value
proposition that fundamentally changes the playing field in
his/her industry.
 The optimal sales approach is missionary, "hunter style"
direct sales looking for large, project-oriented deals,
because closing such deals will create reinforcement in the
marketplace that the category is in-fact real.
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Middle Strategy: Sales
Maximising
 As experience is gained by both producers and users,
market uncertainty is reduced.
 Sales Maximising firms tend to define needs based on their
visibility to the customers.
 One or several more dominant producer design emerge.
 This reduction of market need uncertainty enables
increased application of advanced technology as a source
of further product innovation.
 The result will be more often product variation or new
components.
 This is the Bowling Alley stage; markets are developing in a
niche-by-niche basis.
 The optimum approach is to focus on pragmatic,
department-level buyers who have severe problems to
solve.
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Late Entry Strategy: Cost
Minimising
 As the product life cycle evolves, variety tends to be
reduced and products become standardised.
 Competition focuses on price – efficiencies and
economies of scale are emphasised.
 At this stage, significant change is difficult, it frequently
involves both product and process modification and
must be dealt with efficiently as a system.
 The value proposition is generally application-oriented,
and the corresponding ROI is removal of a specific
problem.
 At this stage, the value proposition must focus on
technology, standards, and ability to scale and offer
broad support
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Strategic Management in
Technology-intensive
industries
 The development of new technology
 Generation
 Uncertainty
 Diffusion
 The strategic management of technology




Exploiting innovation
Industry standards
Timing: to lead or to follow?
Managing risk
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Characteristics of a
Technology Which
Influence Imitation
Ability to imitate an
innovation depends
on:
How codifiable is the
knowledge? Explicit
knowledge is easier to
understand than tacit
knowledge.
How complex is the
technology?
Lead time
 If rivals can imitate-- time
lag is the major
advantage of the
innovator.
 But maintaining lead-time
advantage requires
continuous innovation
 Lead time is reinforced
by learning effects
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Course Reading
• Goffin, K, Mitchell, R, 2005,
Innovation Management,
Developing an Innovation Strategy,
Palgrave Chapter 4, pp98 – 137