ORGANIZING INNOVATIONUSING STRUCTURE TO FOSTER INGENUITY

INNOVATEVERB / MAKE CHANGES IN SOMETHING ESTABLISHED, ESP. BY INTRODUCING NEW METHODS, IDEAS OR PRODUCTS

HOW DO WE CREATE INNOVATION?

INGENUITYNOUN / THE QUALITY OF BEING CLEVER, ORIGINAL AND INVENTIVE

OPPORTUNITYNOUN / A SET OF CIRCUMSTANCES THAT MAKES IT POSSIBLE TO DO SOMETHING

INGENUITY + OPPORTUNITY = INNOVATION

UNDERSTANDING STRUCTURAL INGENUITY

• Existing Companies

• Emerging Companies

• Types of Structure

• Knowledge

• Investment

Apple Mac Pro Assembly Line / Austin, Texas

THE OLD GUARDTHE SUCCESS AND FAILURES OF A “TRADITIONAL CORPORATION”

CAR MANUFACTURING

• Mature market

• Process Innovation

• VW Works Council*

• Product Innovation

• Honda City**

*Bernie Woodall. 2014. After rejecting UAW, VW workers may still get work council. Reuters, February 16.**Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

MARKET S-CURVE

Time

Growth

UTTERBACK-ABERNATHY MODEL

Product Innovation

Process Innovation

NEED FOR ORGANIZATION

Gaps in R&D

• Safety / Seat Belts• Comfort / Air Conditioning• Technology / Electric Car• New Markets / Small City Cars

FOSTERING INGENUITY + FINDING OPPORTUNITY

• “Let’s Gamble”*

• Middle - Up - Down**

• Job Rotation*

Product Innovation Process Innovation

• Works Council

• R&D

• Internal Competition*

*Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

**Numagami, T., Karube, M., & Kato, T. 2010. Organizational Deadweight: Learning From Japan. Academy of Management Perspectives, 24(4), 25-37.

NEW KIDS ON THE BLOCKCREATING INNOVATION FROM SCRATCH

Steve Jobs John LasseterEd Catmull

ORGANIZING WITH A CLEAN SLATE

• Flexible

• Communication

• Teams

THE CROWD TECHNICAL TEAMPIXAR’S DEVELOPMENT OF ANIMATED AUTONOMOUS ANTS

The Pixar Story. Dir. Leslie Iwerks. Disney, 2007. Film

A Bug’s Life, 1998

INDICATORS TO A NEW STRATEGY*

• Manifesto

• Anthology

• Infrastructure to Replicate

• Congenial Technology

• Market

• Organization

*Roy Peter Clark. 2014. What it takes to create a new kind of journalism. Poynter Institute, April 7.

THE BRAINTRUSTHOW PIXAR SELF-CRITIQUES

Pixar Screening Room / Emeryville, California

Catmull, Ed. Creativity Inc. Random House. 2014. Print.

STRUCTUREWHAT IS IT GOOD FOR?

TYPES OF STRUCTURE

Decentralization

Centralization

OrganicMechanistic

PROS AND CONS

Type Pro Con

Centralized Tightly controlled planLittle input from company as

a whole

DecentralizedAccess to informationIdea generationIncrease marker orientation

Difficult coordinationAvoids radical innovation

Hinders strategic management

MechanisticMore efficient

Predictable, incrementalHinders innovation

Drives away creatives

OrganicSharing of knowledge

Fosters innovation

Relies on employee commitment

Shane, Scott. 2009, Technology Strategy for Managers and Entrepreneurs, Englewood Cliffs, NJ: Prentice Hall, ISBN-10: 0131879324

BEST OF BOTH WORLDS?

• Create new units?*

• Give middle management more freedom for middle-up-down?*

• Increased flexibility to foster innovation?**

• Separate directors for each “type”**

*Numagami, T., Karube, M., & Kato, T. 2010. Organizational Deadweight: Learning From Japan. Academy of Management Perspectives, 24(4), 25-37. **Organizing From Scratch: The Learning Lab Denmark Experience (A)

KNOWLEDGEA COMPANY IS NOT A MACHINE BUT A LIVING ORGANISM,

Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

HOW TO CREATE KNOWLEDGE

• Center of human resource strategy

• Types of knowledge

• Middle-Up-Down

• Clear obstacles

Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

TACET

EXPLICIT

TYPES OF KNOWLEDGE

• T to T• E to E• T to E• E to T

Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

INVESTMENTORGANIZATIONAL RESOURCES

Skype Google

AirBNB

SLACK RESOURCESBUILDING BEYOND A COMPANIES CURRENT OPERATING PLAN

Shane, Scott. 2009, Technology Strategy for Managers and Entrepreneurs, Englewood Cliffs, NJ: Prentice Hall, ISBN-10: 0131879324

Dyson

SO IS ALL OF THIS SUSTAINABLE?

WHY MIDDLE-TOP-DOWN HAS FAILED

• Inward thinking lead to a disconnect from the market

• Shortage of strategic thinkers

• Promoted poorly

• Can’t tell a good idea from a bad one

• Heavy load on middle managers

CIRCLE OF DEADWEIGHT

Middle ManagementFreedom

Promoted Over Time

Lack of Strategic Thinkers

Lose ability to vet ideas

Rely on new middle managers

Heavy workload on middle managers

Freeloading managers

IS THERE ONE SOLUTION?NO.

UTTERBACK-ABERNATHY MODEL

Product Innovation

Process Innovation

NEED FOR ORGANIZATION

Gaps in R&D

MARKET S-CURVE

Time

Growth

REFERENCES

• Bernie Woodall. 2014. After rejecting UAW, VW workers may still get work council. Reuters, February 16.

• Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

• Numagami, T., Karube, M., & Kato, T. 2010. Organizational Deadweight: Learning From Japan. Academy of Management Perspectives, 24(4), 25-37.

• The Pixar Story. Dir. Leslie Iwerks. Disney, 2007. Film

• Roy Peter Clark. 2014. What it takes to create a new kind of journalism. Poynter Institute, April 7.

• Catmull, Ed. Creativity Inc. Random House. 2014. Print.

• Shane, Scott. 2009, Technology Strategy for Managers and Entrepreneurs, Englewood Cliffs, NJ: Prentice Hall, ISBN-10: 0131879324

QUESTIONS?