Core Course Innovation Session 4 PPT 4b

Prévia do material em texto

RCM Corinne Grenier 1
INNOVATION STRATEGY OF 
COMPETITIVE COMPANIES AND 
ENTREPRENEURSHIP
Track Four : The innovating organization
PPT 4b : General overview of the innovating organization
Professeur RCM : Corinne Grenier
RCM Corinne Grenier 
Objectives of track 4b
 The exploitation – exploration paradox
 Organizational arrangements to solve the Exploitation –
Exploration paradox 
 A general framework for assessing the innovating company 
RCM Corinne Grenier 
1. The Exploitation – Exploration paradox
Companies develop both incremental and radical innovations:
- Incremental innovations: to exploit existing products line and to secure their strategic 
positioning as well as diminishing risk (associated with more radical innovation)
- Radical innovations: to create new markets and new strategic positioning 
These two kinds of innovations rest on different principles: 
- Incremental innovations: dealing with the EXPLOITATION of already known and 
used technologies, social practices and existing organizational arrangements and 
culture = the EXPLOITATION of what companies already do 
- Radical innovations: dealing with the EXPLORATION of unknown technologies and 
social practices, requiring new organizational arrangements and culture = the 
EXPLORATION of what is necessary to change what companies use to do.
Exploitation Exploration
How to 
conciliate 
both?
RCM Corinne Grenier 
1. The Exploitation – Exploration paradox
The Exploitation – Exploration Paradox 
 The more companies are engaged in incremental innovations, the more they can secure 
their financial assets and the more they have to maintain routines; however, maintaining 
routines prevent radical innovations which offer opportunities to companies to create new 
markets, to take a leading position and to secure future financial assets……!
The two questions on the Exploration – Exploitation paradox
1) How to stimulate creativity and innovating project management while preventing that 
organization does not disintegrate ?
2) How to control innovation process while preventing that innovation is not stopped ? 
RCM: Corinne Grenier 5
Mechanic organization Organic organization
• Consistent 
• Efficient
• Centralized
• “Clock”
• Elementary, specialized and 
repeating tasks
• Vertical and horizontal interactions 
between individuals 
• Hierarchical structure of control and 
authority
• Structure efficient in stable and 
predictable environment
• Favorable to incremental 
innovation
• Adaptable
• Effective
• Reactive 
• Decentralized
• Reacting and moving ,
• Interactions between 
individuals
• Lateral communication
• Importance of commitment 
rather than respect of 
procedures
• Structure efficient in unstable 
and unpredictable 
environment
• Favorable to radical 
innovation
How to articulate 
within the same 
company 
principles of 
mechanistic 
arrangements and 
of organic 
arrangements?
1. The Exploitation – Exploration paradox
The Exploitation – Exploration Paradox – how to conciliate two contradictory 
organizational arrangements?
RCM: Corinne Grenier 6
1. The Exploitation – Exploration paradox
The Exploitation – Exploration Paradox – how to conciliate two contradictory 
organizational arrangements?
Mechanic organization Organic organization 
Exploitation Exploration
Integration Differentiation
Planning Improvisation 
RCM Corinne Grenier 
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
One way to solve the paradox: the Ambidextry Organization 
Compulsory Readings
 Birkinshaw and Gibson (2004), “Building Ambidexterity into an 
Organization” 
RCM Corinne Grenier 
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
1° form – the structural ambidexterity (structure-oriented form)
= to create separate structures for different types of activities. For instance, the core business units 
are given responsibility for creating alignment with the existing products and markets; and other 
units are given responsibility for developing new products and technologies (being adaptive with 
the new trends of the markets)
Different forms of structural ambidexterity:
1. Internal functional separation (see the 
diagram)
2. Ambidexterity through network, when 
organizations externalize their more 
innovative activities (through partnerships) 
3. Spin-Off Strategy: The development of a 
new firm by an employee who has left his 
previous company, but who has been helped 
by its former employer (see the next slide)
RCM Corinne Grenier 
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
Spin-off - The development of a new firm by an employee who has left his previous company, 
but who has been helped by its former employer
Elements in favor of Spin-off 
. HR Management 
. Valorization of the company image 
. Development of innovation culture in the company
. Development of synergies
. Development of alliances and partnerships
. Decreasing the organization size
. Focus on core competencies and core activities
Actors of spin-off 
. The organization (essaimeuse)
. The individual (essaimé)
. Spin-off steering committee 
. Financial and technological partners
Example
Rolls-Royce Business Ventures Limited was set up to exploit Rolls-Royce technology in
new product areas. Its mission was to lay the foundations for new businesses which had a good fit with the 
technology and skills available to the parent company, but which were outside the mandate of the parent 
company’s existing business groups. The company, which was given its own site, has now been wound up. 
Nevertheless, it established two spin-off companies during its short life: Stresswave Technology Limited and 
Reflex Manufacturing Systems Limited.
RCM: Corinne Grenier 10
Phase “Head Office” “Spin-off firm”
Incubation -Setting a culture in favor of innovation
-Developing a strategic vision (on the Long 
Run)
- Strong involvement of the management 
(advices, projects selection ….)
- Creation of a steering committee
- Incubation and learning 
- Competence development 
Growth -Financial, legal and technological support -Similar of a firm creation from scratch but 
facilitated by a strong project and a long term 
vision
Expansion - Commercial, managerial, financial, 
logistical…. support
-Organizational learning
-Development of relationships with the spin-
off
- Development of relationship and 
partnership 
- Importance of networks 
- In case of failure, reinstatement of the 
employee
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
Spin-off - The development of a new firm by an employee who has left his previous company, 
but who has been helped by its former employer
RCM Corinne Grenier 
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
2° form – the contextual ambidexterity (individuals-oriented form)
= when individuals are in a position in their daily work to both align their activities with the core 
businesses of the organization AND to adapt their activities with the new trends of the markets 
Four kinds of behaviors for individuals in context of 
contextual ambidexterity:
1. Ambidextrous individuals take the initiative and are alert 
to opportunities beyond the confines of their own jobs 
2. Ambidextrous individuals are cooperative and seek out 
opportunities to combine their efforts with others
3. Ambidextrous individuals are brokers, always looking to 
build internal linkages
4. Ambidextrous individuals are multitaskers who areconfortable wearing “more than one hat”.
See explanations and 
examples in 
Birkinshaw and 
Gibson (2004)
RCM Corinne Grenier 
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
The Ambidextry Organization : two forms of organizational ambidexterity
RCM Corinne Grenier 
2. Organizational arrangements to solve the Exploitation – Exploration 
paradox
Other non compulsory Readings
 Raisch S., Birkinshaw J., Probst G. and Tushman M. (2009), “Organizational 
Ambidexterity: Balancing Exploitation and Exploration for Sustained 
Performance”, Organization Science, vol 20/4, p. 685-695
 Grenier C. (2010), “Capitaliser sur l’expérience d’innovation: construire
l’organisation innovante”, chapitre 14, in Le Loarne S. et Blanco S. (coord), 
Management de l’innovation, Edition Pierson Education (available in the 
Hub)
 Chanal V. et Mothe C. (2005), “Quel design organisationnel pour combiner 
innovation d’exploration et innovation d’exploitation?”, revue FACEF 
PESQUISA, vol 8/1
RCM Corinne Grenier 
3. A general framework for assessing the innovating company 
Principles
 The innovating company is the one whose all the components are directed to 
the strategy of innovation which has been chosen:
 Based on either much more radical innovation or incremental innovation
 Oriented towards either radical move or continuous flow of new products
 With considering the part of innovating products in the turnover of the 
company….
 Whatever the strategic orientation of the firm about its innovation policy, all 
its components (strategy, culture, structure, leadership…) must be aligned 
 Bettina von Stamm has elaborated an interesting framework to assess the 
alignment of all the components of companies.
Compulsory reading:
 Von Stamm (2010), “The BvS Innovation Framework”
The Innovation Framework (Bettina von Stamm, 2003)
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
The principles of Bettina von Stamm’s Model
 Innovation, design and creativity are disciplines that span across 
boundaries
 Innovation, design and creativity need permeate every aspect of an 
organisation
 Innovation, design and creativity have to do with curiosity, a taste for 
experimentation, a dissatisfaction with status quo and the desire to 
continuously improve things.
 Innovative organisation is much more about changing one’s frame of 
mind than it is about a changing the company’s processes or vision 
statement.
Principles for innovating companies based 
on five components:
 Strategy and vision 
 Leadership
 Culture
 Processes
 Physical work environment 
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
The Strategy and Vision component
• The existence of a clear vision and supporting strategy are one of the key 
corner stones for any organization – but it is critical for an organization 
with a high innovation ambition. 
• Development of a shared strategy and vision is particularly important for 
diverse businesses or businesses that have recently underdone significant 
change, e.g. mergers and acquisitions, deregulation, or for those 
organizations that intend to change focus, e.g. from growth through M&A 
activities to growth through innovation.
• In order to achieve innovation, a clear and well-communicated innovation 
strategy with direct link to the company’s strategy is essential. 
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
The Leadership component 
• Leadership is critical to innovation success. Unless an initiative is seen to 
have support from the top it is not likely to be taken serious. Positive 
comments are such as : “Everyone in the organization recognises the 
importance of innovation as there is visible high level support.”
• Creating the most appropriate leadership style, and ensuring fit between 
strategic ambition, company culture and leadership style does not happen on 
its own accord. What kind of leadership style is most appropriate will depend 
on the type of company culture, and the kind of innovation aspired to.
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
The Company Culture component 
• A company culture that encourages and supports innovation is essential. It 
is down to the leadership of an organization to establish such a company 
culture.
• In trying to establish an ‘innovation culture’, many companies are facing 
issues arising from historically grown cultural differences between 
divisions and business units. These should be understood and taken into 
consideration when steps for culture change are taken.
• In choosing a path to an innovation culture the company’s (cultural) 
heritage has to be taken into consideration.
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
The Processes component 
• The selection of a process that is relevant and appropriate for a company’s 
specific context and requirements is important. Note that finding the right 
process might require some time and experimentation.
• Processes should be linked to company strategy and a process should be a 
means to an end, not the end in itself. They should be simple and easy to use.
• Processes that should be considered in the context of innovation include:
– NPD
– HR
– IT
– Market research
– Communication 
– Measurement 
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
The Physical Work Environment component 
• Demands on the office environment are changing : the right office 
environment can help create a positive image of the company.
• The right office environment can support company culture and strategy, it 
can enhance communication and help break down barriers between 
departments.
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
Question 1. Everyone in our company has a clear and shared understanding of our 
strategy and vision and knows how it applies to their particular job
Question 2. We have a specific innovation strategy (a balanced portfolio which states 
targets for incremental and radical innovation, areas for innovation, different time 
horizons etc.) with a clear link to our company strategy
…. And other 8 questions
By answering whether you strongly disagree (1), or strongly agree (10) with each of 
the statements and select the relevant box on the scale… you can gain a quick 
overview of the likelihood of your organization innovating successfully… 
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company 
illustration
If we want to evaluate the ability of organizations in supporting 
innovations…. See: http://www.innovationwave.com
To go further with the Bettina von Stamm’s model, non 
compulsoring readings
 See the website of Bettina von Stamm: 
http://www.innovationleadershipforum.org
http://www.innovationwave.com
 Listen youtube speeches of Bettina von Stamm in Innovation
. Innovation: The Future of Innovation - Beware of the Dark Side
. On spirit and people for innovation
RCM Corinne Grenier / Created by France Selvides 
3. A general framework for assessing the innovating company