- Research Feature
- Read Time: 9 min
Hierarchies are often seen as obstacles to innovation. However, a growing body of research shows that the right kind of hierarchy can help teams become better innovators and learners.
Showing 1-20 of 56
Companies tend to compete not as individual entities, but as members of networks — which makes collaboration a strategic necessity, not merely a tactical choice. But while many executives say they want win-win solutions, in reality, they usually seek victories that don’t excessively annoy their counterparts. In other words, “win/no-lose” is a more accurate description.
Leaders today must wean their companies away from three pieces of conventional wisdom about digital strategy: agility, first-mover advantage, and minimum viable product. These ideas have anchored technological decision-making for over a decade but are highly unsuitable for the emerging world. In conditions of environmental uncertainty and interconnected technology, we need more thoughtfulness rather than more speed.
Zhang Ruimin, the CEO and chairman of the Qingdao, China, white goods giant Haier Group Corp., has done what most chief executives dare not even dream about. He blew up nearly the entire administrative structure of a global manufacturing enterprise, eliminating the 10,000 management jobs that once held it together, and reshaped the organization into a network of entrepreneurial ventures run by employees.
The authors’ research suggests that, rather than leaving the development of innovation to serendipity, executives should create collaborative contexts where innovation is likely to emerge from unpredictable pockets of creativity within an organization. By understanding and tapping the power of employee networks, executives can stimulate the creation of these kinds of collaborative environments.
Internal crowdsourcing, which seeks to channel the ideas and expertise of the company’s own employees, allows employees to interact dynamically with coworkers in other locations, propose new ideas, and suggest new directions to management. Because many large companies have pockets of expertise and knowledge scattered across different locations, harnessing the cognitive diversity within organizations can open up rich new sources of innovation.
For Volvo Cars, pursuing digital innovation required fundamentally rethinking the organization, while also keeping the core business functioning efficiently. The company did so by balancing four interrelated competing concerns: (1) new and established innovation capabilities; (2) process and product focus; (3) external and internal collaboration; and (4) flexibility and control in relationships with external partners.
Every great strategy stands on the shoulders of a novel concept, a “big idea.” History is littered with once-extraordinary companies that became mediocre when their strategies drifted away from the big ideas that made them great, or when their once-big ideas lost their commercial punch.
Bringing high-tech inventions built on patented technologies to market can be complicated and risky. The threat of added costs from patent infringement lawsuits has led technology companies to pool their talents — and patents — in technology consortia. Joining a tech consortium requires managers to weigh intellectual property value against the value of future collaborations and assess the consortium’s pros and cons for innovation, competition, and market creation.
Smart data and mass customization have the potential to radically change the way trips are planned. Already, the Boston-based startup Bridj is piloting a dynamic bus system that optimizes routing in response to demand, while Düsseldorf Airport is piloting a robotic parking system in which users just drop off their cars, which are then parked automatically. In the future, intermodal routing could provide customers with a seamless experience and reshape the transportation infrastructure.
All too often, companies from emerging and established economies talk past each other when discussing intellectual property. The result is that often fail to consider all their options for a productive collaboration. The authors detail five ways that companies can structure such IP partnerships, and say that it’s important for a company to choose the one that’s the best fit for the project: “The choice of IP business models is a strategic decision, not merely a legal matter.”
Companies can participate in “collaborative consumption” through creative new approaches to defining and reusing their resources. So write Kurt Matzler, Viktoria Veider and Wolfgang Kathan, all of University of Innsbruck. For instance, LiquidSpace, based in Palo Alto, California, connects organizations that have unused office space with temporarily renters. It has been called the “Airbnb of work spaces” and is extending the idea of sharing unused capacities to companies that aren’t totally built around the collaborative model.
Large companies in traditional industries might think that digital transformation can wait — that a follower strategy is a safer route than trying to be a pioneer. “That kind of thinking, while tempting, is wrong,” write George Westerman and Didier Bonnet. “In every industry we studied, companies are doing exciting things with digital technology and getting impressive business benefits.”
When is the best time to enter a new industry? As it turns out, understanding the product category dynamics in an emerging industry and when a dominant category label has been introduced are important to identifying the “window of opportunity” to enter. Dominant category labels typically are introduced right before the industry starts a phase of rapid growth and consolidation. Companies would do well to track category labels before introducing a product in a nascent industry.
Unconventional approaches to innovation are speeding up new product development, making R&D faster and cheaper. In China, companies are embracing an industrialized approach to research that allows them to complete projects as much as two to five times faster than they did before. “These developments have potentially huge implications for how companies should think about global competition and whether they need to rethink and reengineer their established innovation and product development processes,” the authors write.
Using its own version of open innovation called Connect + Develop, Procter & Gamble is now accessing externally developed intellectual property to accelerate internal innovation. Its Live Well Collaborative, for instance, was founded by Procter & Gamble and the University of Cincinnati with the goal of specializing in research and development of products and services for the 50+ market.
The editors of MIT Sloan Management Review announce the winners of the 2013 Richard Beckhard Memorial Prize, awarded to the authors of the most outstanding MIT SMR article on planned change and organizational development published from fall 2011 to summer 2012. The Winners: Eoin Whelan, Salvatore Parise, Jasper de Valk and Rick Aalbers, authors of “Creating Employee Networks That Deliver Open Innovation.”
Lessons from the successes and failures of many emerging technologies offer a helpful guide in how adoption works. This article draws on the authors’ book Wharton on Managing Emerging Technologies and their ongoing research at the Wharton School’s Mack Center for Technological Innovation about why companies so often misinterpret emerging technologies.
The article “Innovate Better” by Fareed Zakaria in the June 13 issue of Time magazine looks at the state of business innovation in the U.S. and concludes it needs more help.
Showing 1-20 of 56