Category: PhD

Notes on Strategic Management of Technological Innovation

I had a feeling that my fellow New York University Alumnus Mellissa A. Schilling would produce a worthy written work explaining the technical language used within the Innovation and Technology Management field, a discipline I’m now studying at Universidad Pontificia Bolivariana in Medellin, Colombia.

The case studies included covers a wide variety of topics. Innovation and strategy in high technology industries such as smartphones, videogames, pharmaceuticals, biotechnology, electric vehicles, and renewable energies. All interspersed with comments on issues related to platform dynamics, networks, creativity, and breakthrough innovation.

I made the below notes for myself, and highly encourage those also in this field to also purchase her book.

absorptive capacity
The ability of an organization to recognize, assim- ilate, and utilize new knowledge. 

whereby as firms accumulate knowledge, they also increase their future ability to assimi- late information. A firm’s prior related experience shapes its ability to recognize the value of new information, and to utilize that information effectively. 

This knowledge base enables the firm to more rapidly assess the value of related new materials, technologies, and methods. The effects of absorptive capacity suggest that firms that develop new technologies ahead of others may have an advantage in staying ahead. 

network externalities Also termed posi- tive consumption externalities, this is when the value of a good to a user increases with the number of other users of the same or simi- lar good. 

installed base The number of users of a particular good. For instance, the installed base of a particular video game console refers to the number of those consoles that are installed in homes worldwide. 

complementary goods Additional goods and services that enable or enhance the value of another good. For example, the value of a video game console is directly related to the availability of complementary goods such as video games, periph- eral devices, and services such as online gaming. 

path dependency When end results depend greatly on the events that took place leading up to the outcome. It is often impossible to reproduce the results that occur in such a situation. 

Firms will tend to use and build on their existing knowledge base rather than enter unfamiliar areas.

This can result in a very “sticky” technological paradigm that directs future technological inquiry in the area.

Thus, a dominant design is likely to influence the nature of the technological discontinuity that will eventually replace it. 

Increasing returns
When the rate of return (not just gross returns) from a product or process increases with the size of its installed base. 

Technologically superior products do not always win—the firms that win are usually the ones that know how to manage the multiple dimensions of value that shape design selection. 

Buyer Utility Map

It is important to consider six different utility levers, as well as six stages of the buyer experience cycle, to understand a new technol- ogy’s utility to a buyer. 

The stages they identify are purchase, delivery, use, supplements, maintenance, and disposal. The six utility levers they consider are customer productivity, simplicity, convenience, risk, fun and image, and environmental friendliness. Creating a grid with stages and levers yields a 36-cell utility map. Each cell provides an opportunity to offer a new value proposition to a customer. 

For example, instead of having a single entry for customer productivity, the map could have rows for several dimensions of productiv- ity such as speed, efficiency, scalability, and reliability. The map provides a guide for managers to consider multiple dimensions of technological value and multiple stages of the customer experience. 

Even if a new innovation has a significant advantage in functionality, its overall value may be significantly less than the incum- bent standard. 

For the new technology to compete on its stand-alone util- ity alone, that utility must be so great that it eclipses the combined value of an existing technology’s stand-alone utility, its installed base, and its complementary goods. 

When users are comparing the value of a new technology to an existing technology, they are weighing a combination of objective information (e.g., actual technological benefits, actual information on installed base or complementary goods), subjec- tive information (e.g., perceived technological benefits, perceived installed base or complementary goods), and expectations for the future (e.g., anticipated technological benefits, anticipated installed base and complementary goods). Thus, each of the primary value components described above also has corresponding perceived or anticipated value components 

“vaporware”—products that are not actually on the market and may not even exist but are advertised—by many software vendors. By building the impression among customers that a product is ubiquitous, firms can prompt rapid adoption of the product when it actually is available. Vaporware may also buy a firm valuable time in bringing its product to market. If other vendors beat the firm to market and the firm fears that customers may select a dominant design before its offering is introduced, it can use vaporware to attempt to persuade custom- ers to delay purchase until the firm’s product is available. 

first movers the first entrants to sell in a new product or ser- vice category. 

early followers Entrants that are early to market, but not first. 

late entrants Entrants that do not enter the market until the time the product begins to penetrate the mass market or later. 

in an industry characterized by increasing returns to adoption, there can be powerful advantages to being an early provider; a technol- ogy that is adopted early may rise in market power through self-reinforcing positive feedback mechanisms, culminating in its entrenchment as a dominant design. 

First movers typically bear the bulk of the research and development expenses for their product or service technologies, and they must also often pay to develop suppliers and distribution channels, plus consumer awareness. 

incumbent inertia – The tendency for incumbents to be slow to respond to changes in the industry environ- ment due to their large size, established routines, or prior strategic commitments to existing suppliers and customers. 

enabling technologies Component technologies that are necessary for the performance or desirability of a given innovation. 

How does a firm decide whether to attempt to pioneer a technology category or to wait while others do so? The answer will depend on several factors, including customer certainty, the margin of improvement offered by the new technology, the state of enabling technologies and complementary goods, the threat of competitive entry, the degree to which the industry exhibits increasing returns, and the firm’s resources. 

parallel development process When multiple stages of the new product  development process occur simultaneously. 

oligopolistic industries Highly consoli- dated industries with a few large competitors. 

exit barriers Costs or other commitments that make it difficult for firms to abandon an industry (large fixed-asset investments, emotional commitment to the industry, etc.). 

entry barriers Conditions that make it difficult or expensive for new firms to enter an industry (government regulation, large start-up costs, etc.). 

switching costs Factors that make it difficult or expensive to change suppliers or buyers, such as investments in specialized assets to work with a particular supplier or buyer. 

vertical integration Getting into
the business of one’s suppliers (backward vertical integration) or one’s buyers (forward vertical integration). For example, a firm that begins producing its own supplies has practiced backward vertical integration, and a firm that buys its distributor has practiced forward vertical integration. 

complements  Products or services that enhance the usefulness
or desirability of another product. 

stakeholder Any entity that has an interest (“stake”) in the organization. 

A strategic stakeholder analysis emphasizes the stakeholder management issues that are likely to impact the firm’s financial performance, while a normative stakeholder analysis emphasizes the stakeholder management issues the firm ought to attend to due to their ethical or moral implications. 

In Michael Porter’s model of a value chain, activities are divided into primary activities and support activities. Primary activities include inbound logistics (all activities required to receive, store, and disseminate inputs), operations (activities involved in the transformation of inputs into outputs), outbound logistics (activities required to collect, store, and distribute outputs), marketing and sales (activities to inform buyers about products and services and to induce their purchase), and service (after-sales activities required to keep the product or service working effectively). Support activities include procurement (the acquisition of inputs, but not their physical transfer, as that would be covered in inbound logistics), human resource management (activities such as recruiting, hiring, training, and compensating personnel), technology development (activities involved in developing and managing equipment, hardware, software, procedures, and knowledge necessary to transform inputs into outputs), and infrastructure (functions such as accounting, le- gal counsel, finance, planning, public affairs, government relations, quality assurance, and general management necessary to ensure smooth functioning of the firm). 

tacit resources – Resources of an intangible nature (such as knowl- edge) that cannot be readily codified. 

socially complex resources Resources or activities that emerge through the interaction of multiple individuals. 

causal ambiguity The relationship between a resource and the outcome it produces is poorly understood
(the causal mechanism is ambiguous). 

core competencies (or core capabilities) A set of integrated and harmonized abilities that distinguish the firm in the marketplace. 

By viewing the business as a portfolio of core competencies, managers are better able to focus on value creation and meaningful new business development, rather than cost cutting or opportunistic expansion. 

Sometimes the very things that a firm excels at can enslave it, making the firm rigid and overly committed to inappropriate skills and resources. 

While these systems and norms can prove beneficial in reinforcing and leveraging the firm’s existing core competencies, they can also inhibit the development of new core competencies. For example, a firm’s emphasis on a scientific discipline that is central to its core competency can make the firm less attractive to individuals from other disciplines. Rewards for engaging in core competency activities can discourage employees from pursuing more exploratory activities. 

dynamic capabilities A set of abilities that make a firm more agile and responsive to change. 

Strategic intent is to create value, which entails more than just improving operations or cutting costs; it means leveraging corporate resources to create more performance for customers, more well-being for employees, and more returns for shareholders. A company’s strategic intent is a long-term goal that is ambitious, builds upon and stretches the firm’s existing core competencies, and draws from all levels of the orga- nization. 

Successful and innovative firms question existing price-performance assumptions. They lead customers by developing and introducing products that extend well beyond current market requirements and help mold the market’s expectations for the future. 

The balanced scorecard is a measurement system that encourages the firm to consider its goals from multiple perspectives (financial, customer, business process, and innovation and learning), and establish measures that correspond to each of those perspectives. 

The Pareto principle refers to the fact that many events (such as a customer choosing a particular book) have a power law distribution, meaning that 20 percent of the books, shows, or songs attract 80 percent of the business. 

capital rationing – the allocation of a finite quantity of resources over different possible uses. 

R&D intensity – The ratio of R&D expendi- tures to sales. 

net present value (NPV) The discounted cash inflows of a project minus the discounted cash outflows. 

internal rate of return (IRR) The rate of return yielded by a project, nor- mally calculated as the discount rate that makes the net present value of an investment equal zero. 

discounted payback period
The time required to break even on a project using discounted cash flows. 

The internal rate of return of a project is the discount rate that makes the net present value of the investment zero. Managers can compare this rate of return to their required return to decide if the investment should be made. 

discounted cash flow estimates are only as accurate as the original estimates of the profits from the technology, and in many situations it is extremely difficult to antici- pate the returns of the technology… such methods discriminate heavily against projects that are long term or risky, and the methods may fail to capture the strategic importance of the investment decision. Technology development projects play a crucial role in building and leveraging firm capabilities, and creating options for the future. Investments in new core technologies are investments in the organization’s capabilities and learning, and they create opportunities for the firm that might other- wise be unavailable.1 Thus, standard discounted cash flow analysis has the potential to severely undervalue a development project’s contribution to the firm. 

To better incorporate strategic implications in the new product development investment decision, some managers and scholars have recently begun promoting the idea of treating new product development decisions as real options 

real options 

The applica- tion of stock option valua- tion methods to investments in nonfinancial assets. 

  • The cost of the R&D program can be considered the price of a call option. 
  • The cost of future investment required to capitalize on the R&D program (such as the cost of commercializing a new technology that is developed) can be considered the exercise price. 
  • The returns to the R&D investment are analogous to the value of a stock purchased with a call option.

Companies that use the project map categorize all their existing projects and proj- ects under consideration by the resources they require (e.g., engineers, time, capital, etc.) and by how they contribute to the company’s product line. The company can then map the project types and identify gaps in the development strategy. 

The mix of projects represented on such a map should be consistent both with the company’s resources, strategic position, and with its strategic intent 

As once noted by Jack Welch, for- mer CEO of General Electric, “You can’t grow long term if you can’t eat short term. Anyone can manage short. Anyone can manage long. Balancing those two things is what management is.”19 

conjoint analysis
A family of tech- niques that ena- bles assessment of the weight individuals put on different attributes of a choice. 

data envelopment analysis (DEA)
A method of ranking projects based on multiple decision criteria by comparing them to a hypo- thetical efficiency frontier. 

efficiency frontier The range of hypothetical configurations that optimize a combination of features. 

alliance Alliance is a general term that can refer to any type of relation- ship between firms. Alliances may be short or long term and may include for- mally contracted agreements or be entirely informal in nature. 

joint venture A partnership between two or more firms involving a sig- nificant equity stake by the part- ners and often resulting in the creation of a new business entity. 

Collaboration can include partnering with suppliers, customers, competitors, comple- mentors, organizations that offer similar products in different markets, organizations that offer different products in similar markets, nonprofit organizations, government organi- zations, universities, or others. Collaboration can also be used for many different pur- poses, including manufacturing, services, marketing, or technology-based objectives. 

The most common forms of collaborative arrangements used in technological innova- tion include strategic alliances, joint ventures, licensing, outsourcing, and collective research organizations. 

licensing A contractual arrangement whereby one organization or individual (the licensee) obtains the rights to use the proprietary technology (or trademark, or copyright, etc.) of another organization or individual (the licensor). 

capability complemen- tation Combining (“pooling”) the capabilities and other resources of partner firms, but not necessar- ily transferring those resources between the partners. 

capability transfer Exchange of capabilities across firms in such a manner that partners can internalize the capabilities and use them inde- pendently of the particular devel- opment project. 

managers should consider how their portfolio of alliances positions them in the web of relationships that connects their firm, their partners, and their partners’ partners.23 Such networks can be very influential in the diffusion of information and other resources, and being positioned well in an alli- ance network can confer significant advantages 

contract manufacturing When a firm hires another firm (often a specialized manufacturer) to manufacture its products. 

These risks can be minimized if the company limits the number of collaborations in which it engages, chooses its partners very carefully, and establishes appropriate monitoring and governance mechanisms to limit opportunism. 

Resource fit refers to the degree to which potential partners have resources that can be effectively integrated into a strategy that creates value.47 Such resources may be either complementary or supplementary. Most collaborations are motivated by the need to access resources the firm does not possess; such collaborations are based on the combination of complementary resources. 

Strategic fit refers to the degree to which partners have compatible objectives and styles. The objectives of the partners need not be the same as long as the objectives can be achieved without harming the alliance or the partners. Not knowing a partner’s true objectives or forging an alliance with a partner with incompatible objectives can result in conflict, wasted resources, and forfeited opportunities. 

governance – The act or process of exerting authority and/or control. 

alliance contracts Legally bind-ing contractual arrangements to ensure that partners (a) are fully aware of their rights and obligations in the collaboration and (b) have legal remedies avail- able if a partner should violate the agreement. 

equity ownership When each partner contrib- utes capital and owns a speci- fied right to a percentage of the proceeds from the alliance. 

relational governance Self-enforcing norms based on goodwill, trust, and reputation of the partners. These typically emerge over time through repeated experi- ences of working together. 

The num- ber of links an organization has in a network is known as its “degree centrality.” In general, the degree centrality of an organization tends to be strongly related to its size and prominence. The size and prominence of an organization help to determine how attractive it is to potential part- ners, and only large organizations typically have the resources necessary to manage a large num- ber of alliances. An organization does not, how- ever, have to be large or prominent to occupy a key brokerage position. 

appropriability The degree to which a firm is able to capture the rents from its innovation. 

tacit knowledge Knowledge that cannot be readily codified or trans- ferred in written form. 

socially complex knowledge Knowledge that arises from the interaction of multiple individuals. 

For some competitive situations, protecting a technology may not be as desirable as liberally diffusing it. In industries characterized by increasing returns, firms sometimes choose to liberally diffuse their technologies to increase their likelihood of rising to the position of dominant design.

open source software Software whose code is made freely available to others for use, augmentation, and resale. 

wholly proprietary systems Goods based on technology that is owned and vigorously pro- tected through patents, copy- rights, secrecy, or other mecha- nisms. Wholly proprietary tech- nologies may be legally produced and augmented only by their developers. 

wholly open systems Goods based on technology that is not protected and that is freely available for production or augmentation by other producers. 

original equipment manufacturers (OEMs) Firms that as- semble goods using components made by other manufacturers, also called value- added resellers (VARs). 

architectural control
The ability of a firm (or group of firms) to deter- mine the struc- ture, operation, compatibility, and development of a technology. 

If the firm is unable to produce the technology at sufficient volume or quality levels (or market the technology with sufficient intensity), then protecting the technology so that the firm is its sole provider may significantly hinder its adoption. 

if complementary goods influence the value of the technology to users, then the firm must (a) be able to produce the complements in sufficient range and quantity, (b) sponsor their production by other firms, or (c) encourage collective production of the complements through a more open technology strategy. 

If a firm lacks the production capability or expertise to produce a sufficient range of complementary goods, or the capital to acquire such capabilities quickly, it should encourage collective production of complements through a more open technology strategy and utilize forms of sponsorship. 

Resources for Internal Development 

If a firm does not have significant resources (capital, technological expertise) to invest in the technology’s functionality, it may have difficulty producing a technology that has an initial performance level, and rate of improvement, that the market finds attractive. In such instances, it can be valuable to tap the external development efforts of other firms (or individuals) through utilizing a more open technology strategy. 

A firm with architectural control can typically design the technology to be compatible with its own complements and incompatible with those of competitors. 

Technology trajectories are path dependent; minor events in their evolution can set them careen- ing off into unexpected directions. A firm that has a significant stake in a particular evolution path (because, for example, it has technological competencies that are much more amenable to one path of evolution than other potential paths) may place a high value on architectural control, which can enable it to co-opt or destroy less favorable development paths by denying their progenitors access to the market. 

Managers referred to Google as a flex- ible and flat “technocracy,” where resources and control were allocated based on the quality of people’s ideas rather than seniority or hierarchical status. Schmidt remarked, “One of the things that we’ve tried very hard to avoid at Google is the sort of divisional structure that prevents collaboration across units. It’s dif- ficult. So I understand why people want to build business units, and have their presidents. But by doing that you cut down the informal ties that, in an open culture, drive so much collaboration. If people in the organization understand the values of the company, they should be able to self-organize to work on the most interesting problems.”c 

it is often argued that small, flexible organizations with a minimum of rules and procedures will encourage creativity and experimentation, leading to more innovative ideas. At the same time, it is also frequently pointed out that well-developed procedures and standards can ensure that the organization makes better development investment decisions and is able to implement projects quickly and efficiently. 

disaggregated When something is separated into its constituent parts. 

formalization – The degree to which the firm utilizes rules, procedures, and written documentation to structure the behavior of individuals or groups within the organization. Formalization can substitute for some degree of managerial oversight, and thereby help large companies run smoothly with fewer managers. 

standardization – The degree to which activities are performed in a uniform manner. Standardization may be used to ensure quality levels are met and that custom- ers and suppliers are responded to consistently and equitably. However, by minimiz- ing variation, standardization can limit the creativity and experimentation that leads to innovative ideas. 

If a firm codifies all of its activities with detailed procedures, it may stifle employee creativity. Employees may not feel empowered or motivated to implement new solutions. 

centralization/ decentraliza- tion Centralization is the degree to which decision- making author- ity is kept at
top levels of management. Decentralization is the degree to which decision- making authority is pushed down to lower levels of the firm. 

mechanistic  An organiza- tion structure characterized by a high degree of formalization and standardiza- tion, causing operations to be almost automatic or mechanical. By establishing detailed rules, procedures, and standards, top management can push decision-making authority to lower levels of the firm while still ensuring that decisions are consistent with top management’s objectives. 

organic An organiza- tion structure characterized by a low degree of formalization and standardiza- tion. Employees may not have well-defined job responsibilities and operations may be charac- terized by a high degree of vari- ation. Employees are given far more lati- tude in their job responsibilities and operating procedures. Because much innovation arises from experimentation and improvisation, organic structures are often thought to be better for innovation despite their possible detriment to efficiency. 

ambidextrous organization The ability of an organization to behave almost as two different kinds of com- panies at once. Different divi- sions of the firm may have differ- ent structures and control systems, enabling them to have different cul- tures and patterns of operations. 

Skunk Works® 

Skunk Works® is a term that origi- nated with a divi- sion of Lockheed Martin that was formed in June of 1943 to quickly develop a jet fighter for the United States Army. It has evolved as skunk works to refer more generally to new product develop- ment teams that operate nearly autonomously from the parent organization, with considerable decentralization of authority and little bureauc- racy. 

there can be significant gains from isolating new product development teams from the mainstream organization.31 Separating the teams from the rest of the organization permits them to explore new alternatives, unfettered by the demands of the rest of the organization. 

Modularity is achieved in product design through the specification of standard inter- faces. 

Because modularity enables a wider range of end configurations to be achieved from a given set of inputs, it provides a relatively cost-effective way for firms to meet heterogeneous customer demands. Furthermore, since modularity can enable one component to be upgraded without changing other components, modular- ity can enable firms and customers to upgrade their products without replacing their entire system. 

By focusing on those activities in which the firm has a competitive advantage, the firm can improve its chance of developing a product that has a price-to-value ratio that attracts customers while reducing the overhead and administrative complexity of maintaining a wide scope of activities. This can cause whole industries to be trans- formed as large vertically integrated firms are displaced by nimbler, more specialized producers. 

center-for- global strategy
When all innova- tion activities are conducted at a central hub and innovations are then diffused throughout the company. This allows managers to:

  • Tightly coordinate all R&D activities (across both functions and projects). 
  • Achieve greater specialization and economies of scale in R&D activities while
    avoiding duplication of activities in multiple divisions. 
  • Develop and protect core competencies. 
  • Ensure that innovations are standardized and implemented throughout the company. 
  • a center-for-global approach tends to not be very responsive to the diverse demands of different markets. Furthermore, the divisions that serve these markets might resist adopting or promoting centrally developed innovations. As a result, inno- vations developed centrally may not closely fit the needs of foreign markets and may also not be deployed quickly or effectively.
  • local-for-local strategy When each divi- sion or subsidi- ary of the firm conducts its own R&D activities, tailored for the needs of the local market. 

There are several downsides to the local-for-local strategy, however. It can result in significant redundancy in activities as each division reinvents the wheel. Furthermore, each division may suffer from a lack of scale in R&D activities, and there is a risk that valuable innovations will not be diffused across the firm.

locally leveraged strategy
When each division or sub- sidiary of the firm conducts its own R&D activities, but the firm attempts to leverage result- ing innovations throughout the company. 

One way this strategy is employed in consumer markets is to assign an individual the role of international brand custodian. This person is responsible for ensuring that a successful brand is deployed into the firm’s multiple markets while also maintaining consistency in the product’s image and positioning.52 Such a strategy can be very effective if different markets the company serves have similar needs. 

globally linked strategy Innovation activities are decentralized, but also centrally coordinated for the global needs of the corporation. 

Bartlett and Ghoshal argue that, overall, the multinational firm’s objective is to make centralized innovation activities more effective (that is, better able to serve the various local markets) while making decentralized innovation activities more efficient (that is, eliminating redundancies and exploiting synergies across divisions). Bartlett and Ghoshal propose that firms should take a transnational approach wherein resources and capabilities that exist anywhere within the firm can be leveraged and deployed to exploit any opportunity that arises in any geographic market. They argue that this can be achieved by: 

  • Encouraging reciprocal interdependence among the divisions of the firm (that is, each division must recognize its dependency on the other divisions of the firm).
  • Utilizing integration mechanisms across the divisions, such as division-spanning
    teams, rotating personnel across divisions, and so on.
  • Balancing the organization’s identity between its national brands and its global image. 
  • member rotation programs facilitate the diffusion of knowledge throughout the firm.
  • We will begin by looking at the three key objectives of the new product develop- ment process: maximizing fit with customer requirements, minimizing cycle time, and controlling development costs. We then will turn to methods of achieving these objectives, including adopting parallel development processes, using project champi- ons, and involving customers and suppliers in the development process. Next we will look at a number of tools firms can utilize to improve the effectiveness and efficiency of the development process, including creating go/kill decision points with stage- gate processes, defining design targets with quality function deployment, reducing costs and development time with design for manufacturing and CAD/CAM systems, and using metrics to assess the performance of the new product development process. 

For new product development to be successful, it must simultaneously achieve three sometimes-conflicting goals: (1) maximizing the product’s fit with customer requirements, (2) minimizing the development cycle time, and (3) controlling development costs. 

For a new product to be successful in the marketplace, it must offer more compelling features, greater quality, or more attractive pricing than competing products. Despite the obvious importance of this imperative, many new product development projects fail to achieve it. The firm may not have a clear sense of which features customers value the most, resulting in the firm’s overinvesting in some features at the expense of features the customer values more. Firms may also overestimate the customer’s willingness to pay for particular features, leading them to produce feature-packed products that are too expensive to gain significant market pen- etration. Firms may also have difficulty resolving heterogeneity in customer demands; if some customer groups desire different features from other groups, the firm may end up producing a product that makes compromises between these conflicting demands, and the resulting product may fail to be attractive to any of the customer groups. 

development cycle time
The time elapsed from project ini- tiation to product launch, usually measured in months or years. 

a company that is able to bring its product to market early has more time to develop (or encourage others to develop) complementary goods that enhance the value and attractiveness of the product. 

A firm with a short devel- opment cycle can take advantage of both first-mover and second-mover advantages. 

partly parallel development process
A development process in which some (or all) of the development activities at least partially overlap. That is, if activ- ity A would pre- cede activity B in a partly paral- lel development process, activity B might com- mence before activity A is completed. 

A sequential process has no early warning system to indicate that planned features are not manufacturable. Consequently, cycle time can lengthen as the project iterates back and forth between the product design and process design stages. 

Firms often make decisions about projects on the basis of financial considerations and level of production and technical synergy achieved by the new product proposal rather than on marketing criteria. This can lead to an overemphasis on incremental product updates that closely fit existing business activities.16 The screening decision should focus instead on the new product’s advantage and superiority to the consumer, and the growth of its target market. 

lead users  Customers who face the same general needs of the marketplace but are likely to experience them months or years earlier than the rest of the mar- ket and stand to benefit dispro- portionately from solutions to those needs. 

research has shown that many firms produce new products in less time, at a lower cost, and with higher quality by incorporating suppliers in inte- grated product development efforts.22 For example, consider Chrysler. Beginning in 1989, Chrysler reduced its supplier base from 2,500 to 1,140, offering the remaining suppliers long-term contracts and making them integrally involved in the process of designing new cars. Chrysler also introduced an initiative called SCORE (Supplier Cost Reduction Effort) that encouraged suppliers to make cost-saving suggestions in the development process. The net result was $2.5 billion in savings by 1998. 

crowdsourcing 

A distributed problem-solving model whereby a design problem or production task is presented to a group of people who voluntarily contribute their ideas and effort in exchange for compensation, intrinsic rewards, or a combination thereof. 

go/kill deci- sion points Gates established in the develop- ment process where managers must evaluate whether or not to kill the project or allow it to proceed. 

Each gate has three components: deliverables (these are the results of the previous stage and are the inputs for the gate review), criteria (these are the questions or metrics used to make the go/kill decision), and outputs (these are the results of the gate review process and may include a decision such as go, kill, hold, or recycle; outputs should also include an action plan for the dates and deliverables of the next gate). 

Some of the most prominent tools used to improve the development process include stage-gate processes, quality function deployment (“house of quality”), design for man- ufacturing, failure modes and effects analysis, and computer-aided design/computer- aided manufacturing. Using the available tools can greatly expedite the new product development process and maximize the product’s fit with customer requirements. 

Stage 1, the team does a quick investigation and conceptualization of the project. 

Stage 2, the team builds a business case that includes a defined product, its business justification, and a detailed plan of action for the next stages. 

Stage 3, the team begins the actual design and development of the product, including mapping out the manufactur- ing process, the market launch, and operating plans. In this stage, the team also defines the test plans utilized in the next stage. 

Stage 4, the team conducts the verification and validation process for the proposed new product, and its marketing and production. 

Stage 5, the product is ready for launch, and full commercial production and selling commence. 

At Microsoft, almost all projects receive either a post- mortem discussion or a written postmortem report to ensure that the company learns from each of its development experiences. These postmortems tend to be extremely candid and can be quite critical. As noted by one Microsoft manager, “The purpose of the document is to beat yourself up.” 

Measures of the success of the new product development process can help management to: 

  • Identify which projects met their goals and why. 
  • Benchmark the organization’s performance compared to that of competitors or to the organization’s own prior performance. 
  • Improve resource allocation and employee compensation. 
  • Refine future innovation strategies.

Multiple measures are important because any measure used singly may not give a fair representation of the effectiveness of the firm’s development process or its overall innovation performance. Also, the firm’s development strategy, industry, and other environmental circumstances must be considered when formulating measures and interpreting results.

social loafing When an individual in a team does not exert the expected amount of effort and relies instead on the work of other team members. 

cross- functional teams – Teams whose members are drawn from multiple func- tional areas in the firm such as R&D, marketing, manufacturing, distribution, and so on. 

Teams that are composed of people from diverse backgrounds have several advan- tages over teams that are drawn from only one or a few functional areas.9 A greater variety of specialists provides a broader knowledge base and increases the cross- fertilization of ideas. 

Functional experts often actively read journals and are involved in associations that directly affect their trade. These activities can lead to the creation and improvement of innovative ideas, as well as provide solutions to product develop- ment problems. 

homophily 

The tendency for individuals to like other people whom they perceive as being similar to themselves.

The most successful new prod- uct development teams have gatekeepers who provide important links to the environment. Ancona and Caldwell found that teams engaged in three primary types of boundary- spanning activity: 

 Ambassador activities—These activities were directed at representing the team to others and protecting the team from interference. For example, an ambassador might convince other individuals in the organization that the team’s activities are important. 

Task coordination activities—These activities emphasized coordinating and negotiating the team’s activities with other groups. For 

instance, task coordination activities might include negotiating delivery deadlines with other divisions of the firm or obtaining feed- back about the team’s performance.
Scouting activities—These activities were directed at scanning for ideas and information that might be useful to the team, enhancing its knowledge base. For example, scouting activities could include collecting data about what competitors were doing on similar projects or finding technical information that might be useful in the development project. 

Kichuk and Wiesner found that the personality characteristics that enhanced the success of a new product development team were high extroversion, high agreeableness, and low neuroticism.20 

Autonomous teams typically excel at rapid and efficient new product development, particularly when such development requires breaking away from the organization’s existing technologies and routines. Thus, autonomous teams are typically considered to be appropriate for break- through projects and some major platform projects. They can be the birthplace of new business units.25 However, the independence of the autonomous teams can cause them to underutilize the resources of the parent organization. 

In heavyweight and autonomous teams, the project manager must be someone who can lead and evalu- ate the team members, champion the development project both within the team and to the wider organization, and act as a translator between the various functions. 

The contract book provides a tool for monitoring and evaluating the team’s performance in meeting objectives by providing a set of performance benchmarks and deadlines to which the team’s performance can be compared. More important, however, the contract book is an important mechanism for estab- lishing team commitment to the project and a sense of ownership over the project. After negotiation and acceptance of this contract, all parties often sign the contract book as an indication of their intention to honor the plan and achieve the results. 

Gassman and von Zedtwitz studied 37 technology-intensive multinationals and identi- fied four patterns of teams: (1) decentralized self-coordination, (2) system integrator as coor- dinator, (3) core team as system architect, and (4) centralized venture team. 

The value of any technological innovation is only partly determined by what the tech- nology can do. A large part of the value of an innovation is determined by the degree to which people can understand it, access it, and integrate it within their lives. Deploy- ment is not just a way for the firm to earn revenues from its innovations; deployment is a core part of the innovation process itself. 

Generally, firms try to decrease their development cycles in order to decrease their costs and to increase their timing of entry options, but this does not imply that firms should always be racing to launch their products as early as possible. A firm can stra- tegically use launch timing to take advantage of business cycle or seasonal effects, to position its product with respect to previous generations of related technologies, and to ensure that production capacity and complementary goods or services are in place. 

cannibaliza- tion When a firm’s sales of one product (or at one location) diminish its sales of another of its products (or at another of its locations). 

If the firm invests in continuous innovation and willingly cannibalizes its existing products with more advanced products, the firm can make it very difficult for other firms to achieve a technological lead large enough to prove persuasive to customers. 

backward compatible When products of a technological generation can work with products of a previous generation. For example, a computer is backward compatible if it can run the same software as a previous generation of the computer. 

penetration pricing – When the price of a good is set very low (or free) to maxi- mize the good’s market share. 

When it is unclear how customers will respond to a particular price point, firms often use introductory pricing that indicates the pricing is for a stipulated time. This allows the company to test the market’s response to a product without committing to a long-term pricing structure. 

manufactur- ers’ repre- sentatives Independent agents that pro- mote and sell the product lines of one or a few man- ufacturers. They are often used when direct sell- ing is appropriate but the manu- facturer does not have a sufficiently large direct sales force to reach all appropriate mar- ket segments. 

wholesalers 

Companies that buy manufac- turer’s products in bulk, and
then resell them (often in smaller or more diverse bundles) to other supply channel members such as retailers. 

retailers 

Companies that sell goods to the public. 

original equipment manufac- turer (or value-added reseller) 

A company that buys products (or components of products) from other manufac- turers and assem- bles them or customizes them into a product that is then sold under the OEM’s own name. 

disintermedi- ation
When the number of inter- mediaries in a supply channel is reduced; for example, when manufacturers bypass whole- salers and/or retailers to sell directly to end users. 

How the product is sold may also affect the product’s positioning from the perspective of the customer. For example, if competing products are primarily sold in a high-contact mode such as specialty stores or via a direct sales force, selling the new product in a lower-contact channel such as mass discounters or through mail order might cause the customer to perceive the product as being of lower quality or more economical. 

Firms introducing a technological innovation can use strategic alliances or exclusivity contracts to encourage distributors to carry and promote their goods. By providing a distributor a stake in the success of the new technology, the firm may be able to persuade the distributor to carry and promote the new technology aggressively. 

viral marketing Sending informa- tion directly to targeted indi- viduals in effort to stimulate word-of-mouth advertising. Individuals are typically chosen on the basis of their position or role in particular social networks. 

These stages of adoption have been related to the adopter categories of inno- vators (in the very early stages); followed by early adopters, which cause adoption to accelerate; then the early majority and late majority as the innovation penetrates the mass market; and finally the laggards as the innovation approaches saturation.7 The characteristics of these groups make them responsive to different marketing strategies. 

A firm that aggressively promotes its products can increase both its actual installed base and its perceived installed base. 

Any of these individuals is capable of sparking an information epidemic:

Connectors are individuals who tend to form an exceptionally large circle of acquaintances. Sociolo- gists have found that if a random sample of people is asked to identify the individuals they know on a first-name basis, connectors will identify many times the number of people an average person identifies. 

Mavens are individuals who are driven to obtain and disseminate knowledge about one or more of their interests. Economists have widely studied “market mavens,” otherwise known as “price vigilantes.” 

salespersons are those individuals who are naturally talented persuaders. Such individu- als are gifted at providing verbal responses that their listener is likely to find compelling. 

Glossary of Technology Terms

TECHNOLOGICAL GLOSSARY

Technology development: Development of products, processes, equipment and operating methods. It includes research and pilot processes.

Sustainable development and social responsibility: The production of the present must not affect the production of the future, seeking to rehabilitate, preserve and conserve renewable resources and the quality of the environment. It implies taking responsibility for the impact. Its objective is to prevent and mitigate the environmental impact that productive activities may cause on the natural heritage and the quality of life.

Technological development: Set of activities through which seeks to improve or generate new processes or products in the production or administration of the company. It includes one or more forms of research (basic, applied, experimental), but also refers to activities such as adapting technology, solving technical problems and standardization (analysis, inspection and testing of raw materials and inputs, machines and products) ).

Technological unemployment: It is understood as a probable consequence of the application of new technologies or of the substitution of some process by another one that is more intensive in the use of capital.

Technological diagnosis: It consists of systematizing and analyzing the pertinent data of information and technological intelligence; qualify, in relation to quality and productivity, the level of technological modernity of the company in relation to competitors; qualify the potential of own technological development and by technology acquisitions, with reference to the tendencies indicated by the technological prospective; identify bottlenecks related to technology that prevent the company from moving towards higher levels of quality in processes and products; identify specific lines of research and development and technological innovation to increase the capacity for competition in general and for the improvement of quality, in particular.

Diffusion: Process of propagation of a technical innovation among potential users (adoption of a new technique), its continuous improvement and adaptation.

Dimension: One of the criteria under which a certain indicator can be analyzed within an organization.

Effectiveness: Systematic generation of consistent results integrating effectiveness and efficiency. Customer satisfaction is achieved with the optimal use of resources.

Efficiency: Contribution of the obtained results to the fulfillment of global objectives (of the society); relevance, relevance, validity or socioeconomic utility of the results (predefined objectives).

Efficiency: Measures the amount of resources used to achieve the proposed objective, that is, it relates the degree of use of the resources of the production process.

Link between basic and applied research. The presence of efficient connectors that link the results of laboratory research with industrial practice. The realization of industrial scaling for new products. Participation in this process of highly qualified personnel (PhD level), interaction with research centers and universities.

Entity: Any important thing within the organization that deserves to be embodied in a data model.

Support entities: The existence of entities for the development of innovation, through the provision of advice and funding such as: Institute for the promotion of Innovation, INNOVAR, TECNOS, CORPODIB. Technological centers for research such as CORPOICA; CENICAFE, this project that presents the current situation of innovation and gives guidelines for improvement.

Strategy: Mode of relating to the environment; form (ways, modalities) of reaching the proposed objectives. In the strategies, the philosophy of the company is specified. The strategies express the way in which the company hopes to sustain itself or increase its participation in the market. The strategies can be of a financial nature, focus on marketing and marketing or be oriented to technological development. The strategies also show the aspirations of the company, regarding the positioning in its productive sector and the capacity to generate greater added value.

Organizational structure: The organizational structure is the way to group human and material resources, defining the role of each unit, in the sense of making its administration more viable and achieving the objectives of the organization. When technological development becomes an important strategy, the challenge is to make it a systematic and permanent activity. For this, it is necessary to adapt the organization and structure of the firm, defining the functions, responsibilities and means.

Technological evaluation: Process of systematic analysis, prediction and assessment of a wide range of impacts on society, the environment and the economy, related to selection and technological change, in order to identify public policy, investment and production options . Evaluation of the social, environmental and economic costs of existing technologies, of the form of environmental pollution, social disturbances, infrastructure costs, etc., anticipation of probable harmful effects of new technologies; design methods to minimize these costs and evaluation of the possible benefits of the introduction of new or alternative technologies in terms of social, environmental and economic needs. The technological evaluation has tended to be translated, however, into a relevance analysis and cost-benefit calculations. The evaluation of technological alternatives is an internal process of the company, consisting of the identification of technological offers, national and international, in the individual valuation of said offers and in the determination of their impacts, based on the knowledge and experience of the company.

Evaluation: Process oriented to decision making and action, which seeks to determine the relevance, effectiveness and impact of the use of resources, activities and results based on pre-established objectives. The evaluation, which can be “exante” or “expost”, constitutes a dynamic, technical, systematic, rigorous, transparent, open and participatory process, supported by data, sources, information and diverse agents and explicitly incorporated in the process of taking decisions. The evaluation unit (evaluator) must be independent of the political authorities and executors involved, and have credibility and autonomy. Currently, multi-criteria evaluation methods are used in a wide variety of problems, including the evaluation of projects.

Critical success factor: Those areas where satisfactory performance is essential in order for a business to be successful; characteristics, conditions or variables that have a direct influence on customer satisfaction in a specific business process; the group of activities that must be carried out correctly if a vision is to be achieved.

Environmental management: Activity oriented to the application of modern management principles and techniques to the process of sustainable production, seeking to establish alternatives for the use of natural resources that are economically, ecologically and socially sustainable. Its objective is to incorporate environmental considerations in the planning processes and in the definition of development programs and projects.

Quality management: proactive management of productive, administrative and commercial resources to ensure the achievement of the global objectives defined in the plans and development strategies of the organization When the company is organized to perform with quality products and each of the operations productive and administrative, it is possible to achieve significant changes through a series of innovations that use quality control. The organization for continuous improvement favors creativity and constitutes a very important input to achieve mastery of productive and administrative technologies.

Information management: The company must document its technological development activities so that the institutional memory is kept up-to-date, the collective use of knowledge is facilitated, mistakes are not repeated and efficiency is achieved in the actions. Business information today must be conceived as a source of knowledge and decision, not only of registration. The information at managerial level must be designed to generate knowledge and this to allow opportunity of action that at the same time generates innovation.

Management of technological innovation: It is the process aimed at organizing and directing the available resources, both human and technical and economic, with the aim of increasing the creation of new knowledge, generating ideas that allow obtaining new products, processes and services or improving existing, and transfer those same ideas to the manufacturing and marketing phases.

Personnel management: Innovative companies must have an excellent management of human resources, therefore it is a fundamental variable for business success nowadays. The management of creative human teams must take into account the following aspects: motivate creativity, give spaces to generate ideas, accept and practice suggestions given by workers, select people with innovative capacity and interdisciplinarity. The transformation of companies must be advanced through human resources, implementing a model focused on leadership and the improvement of various aspects of the company and people. Through the human factor companies improve their operational efficiency and achieve high performance teams. These elements produce efficient and flexible organizations oriented to the client and obtain better results.

Technology management: The process by which companies manage their technological resources, understood in terms of hard technologies incorporated in machinery and soft technologies semicorporated in advisory or training courses, or disincorporated in the form of manuals, books, plans, patents, among others.

Management of the human factor: The way in which the human factor intervenes and manages innovation. It consists of four elements: The training of staff constantly. The promotion of teamwork. The integration of the personnel and the creation and application of strategic personnel groups (mixture of professionals with people from the base of the organizational charts). The development of creativity in all the staff.

Human Resource Management: Way to manage human resources, motivating them towards continuous improvement. The elements that constitute it are: 1) Training and ongoing training; 2) Stimulus to creativity; 3) Motivation; 4) Leadership and 5) Teamwork.

Technological management: Application of management techniques in support of technological innovation processes. The ability of the company to make knowledge and information productive. As a branch of industrial engineering, technological management is defined as the set of activities and business decisions related to the technological variable, within a holistic and systemic vision of the organization, in order to be competitive in the global market. Technological management is an interdisciplinary field in which knowledge of engineering, science and administration is mixed in order to carry out the planning, development and implementation of technological solutions that contribute to the achievement of the strategic and tactical objectives of an organization. In technological management, technological needs and opportunities are identified, and technological solutions are planned, designed, developed and implemented; it constitutes a process of administration of technological research activities and the transfer of its results to the productive units.

Enabler: Practices, processes or methods that facilitate the implementation of a best practice and allow satisfying a critical factor of success, help explain why the performance indicated by a benchmark.

Management indicator: It is a measure of the condition of a process or event at a given moment; is a relationship between quantitative or qualitative variables, which allows observing the situation and trends of change generated with the object or phenomenon observed, with respect to objectives and expected goals and expected influences. The indicators can be values, units, indexes, statistical series and, together, they can provide an overview of the situation of a process, a business or the general state of a company. By using them in a timely and up-to-date manner, the indicators allow for adequate control over a given situation; The main reason for its importance is that it is possible to predict and act based on the positive or negative trends observed in overall performance.

Adaptation of technology: Process during which foreign technologies are modified in order to accommodate them to local conditions in terms of market size, raw materials and consumer needs, among others.

Total quality management: It refers to the establishment of policies, objectives, annual plans, strategies and quality activities, which lead to comprehensive quality through the participation of everyone in the company. It also includes the formalization of quality in the company through structures, responsibilities, standards, procedures, methods, tools and techniques determined to achieve it. It contains all the required documentation including national and international standards that govern the product and process.

Acquisition of technology not incorporated in goods: In the form of patents, licenses, know-how, brands, projects, models and services with technological content.

Acquisition of technology: Selection of the technological inputs that are more attractive to acquire than to develop. Includes selection, negotiation and transfer.

Assimilation of technology: It is when the person or company that acquires it is able to exercise total control over it, understanding as such the full application to the productive activities in which it is used, its possible reproduction, adaptation and improvement, application to new situations within the company and distribution of it to third parties.

Technological audit: Follow-up to the technology that was acquired, adapted or developed to establish its goodness and real use.

Benchmark: Measuring best-in-class achievement, benchmark or standard measure to be compared, this novel is recognized as the standard of excellence for a specific business process.

Generic Benchmarking: Benchmarking process that compares a function function of a particular company or process with two or more independent companies in your industry.

Internal benchmarking: The comparison process carried out within an organization between similar units or business processes.

Benchmarking: An organizational improvement tool based on the evaluation and continuous analysis of practices; processes; policies and strategies recognized in the market as successful; for its subsequent adaptation and assimilation in an organization.

Biotechnology: Use and manipulation of biological processes using microbial agents, plant or animal cells or their derivatives to generate or modify products and processes, improve plants or animals and develop microorganisms for their application in agricultural activities, health, food production; project and selection of equipment such as enzymatic reactors, etc.

Data Warehouse: See Data Warehouse.

Productive chain: The productive chains are the continuous and discontinuous flows of products, processes and aggregation of values, which follow the primary products until reaching the final consumer.

Technical change: In a broad sense, it is an advance, a change in technique (production method) or the adoption of a different technique. Technical change refers to obtaining a specific product with a different amount or proportion of inputs (labor and capital), that is, a zero displacement along the production function; the qualitative improvement of existing products or processes or the introduction of new processes or products. A technical change occurs through innovation and, to some extent, diffusion. Changes in technique do not necessarily imply new technology; they may simply consist of imitation and diffusion of existing techniques or substitution of factors. Play an important role in models of economic growth; However, there is some controversy regarding the extent to which it is an exogenous factor in economic growth. Sometimes it is confused with the terms technological change and technical progress.

Technological change: It is an advance in technology, an increase in technical knowledge or in the available set of techniques; a change in technology itself, in a strict sense. It is a change within the technical relations of production. Technological change is a process closely related to technological research, invention, innovation and diffusion. Technological change can be defined as the process through which societies acquire and put into practice new and better ways of producing new and better goods and services. It is a social process that presents a complex cause-and-effect relationship with cultural transformations. It also influences the structures, mentalities and values ​​of society; which, in turn, condition technological innovations. There are several motivations that lead a company to value technological change, some of an endogenous nature and others of an exogenous nature.

Cycle P.H.V.A. (Plan, Do, Check, Act). The P.H.V.A. is a managerial conception that dynamizes the relationship between man and processes and seeks to control them based on the establishment, maintenance and improvement of standards, a task that is advanced through the definition of project specifications (quality standards), technical specifications of process and operating procedures. This cycle effectively helps to adopt and monitor the processes of a company, as long as it is constituted in an endless procedure, that is to say, that is planned, an action is taken, it is verified if the results were the expected and acted about these results to restart the cycle.

Competitiveness: In general terms, competitiveness refers to the capacity of an entity (organization, region or country) to create added value and increase its wealth by managing assets and processes, enhancing local and regional factors based on its internationalization within of a project of economic and social development. Competitiveness is the ability of a company, sector, region or country to maintain, grow or expand or diversify in a market. The competitiveness of the biotechnology sector food and beverages is a measure of the ability of economic agents (producers, industrialists and traders) to design, produce and sell goods whose attributes in terms of prices, environmental sustainability and satisfaction of needs and demands are combined to form a more attractive package than that of similar products offered by competitors, taking into account that the final judge is the national and international market. What is important for competitiveness (and productivity) is not the amount of technological research, but the ability to frame technological developments (innovations, technical progress), within a company strategy.

Conceptualization of technological innovation. It consists of the way in which technological innovation is interpreted within the sector. It consists of three elements: The interpretation of innovation as a process that seeks to introduce new products, processes or internal improvements into the market. The interpretation of innovation as a process of technology transfer. The interpretation of innovation as research and development activities that do not need to be commercialized.

Ad hoc query: It is a query that can not be easily satisfied by means of a data model previously constructed.

Technical assistance contract: It is the set of activities dedicated to advising and training a certain entity in the solution of its technical problems during a certain period of time.

License Agreement: Is the permission granted by the grantor or provider of the technology to another person or company to exploit a patent, a registered trademark, an industrial model or drawing and a secret process during a determined period.

Patent contract: It is the exclusive right, granted under the Law, for the exploitation of a technical innovation and that excludes other parties from the production, sale, import and use of the product that is the subject of the patent. It is a form of industrial property.

Management control: The management control is a managerial, integral and strategic instrument that, supported by indicators, indexes and tables produced in a systematic, periodic and objective way, allows the organization to be effective to attract resources, efficient to transform them and effective for channel them. Management control is a system of statistical, financial, administrative and operational information that, placed at the service of the organization’s management, allows it to take correct or timely decisions, adopt corrective measures that correspond and control the evolution over time of the main variables and processes.

Creation of technology: It is the search for original solutions to existing problems that require a technological solution, whether applied to processes in machinery and equipment or in people in the form of knowledge or training.

Creativity of professionals. The techniques and mechanisms used to encourage and develop the creativity of the people directly involved with the innovation process, especially professionals. The sector’s concern for encouraging creativity.

Business culture: Incorporated in the principles, behaviors, norms, beliefs and values ​​that constitute the expression of the business philosophy. It defines the way of thinking of the company, the way of acting.

Organizational culture: The culture is specific to each organization, including the values, beliefs and behaviors that are consolidated and shared during the business life. The leadership style at the level of senior management, the rules, procedures and general characteristics of the members of the company complete the combination of elements that make up the culture of a company. Organizational culture is the way of “thinking”, “feeling” and “acting” of organizations. It must be developed around effectiveness, whose main element is the self-learning that is achieved through the search for what influences the behavior of people, inquiring about what motivates and “moves” to do.

Data Mart: Data Warehouse limited in scope and / or approach.

Data Warehouse Global: Data Warehouse that covers the information needs

of the organization as a whole.

Data Warehouse: A copy of transactional data specifically structured for queries and analysis, which is Oriented towards topics, with Integrated information, which supports variations over time and whose information is not volatile.

DBMS: Abbreviation for Database Management System.

Technological disaggregation: It is the breakdown of each of the components of a technological package for the production and distribution of a good or a service. It seeks to disaggregate spinal and peripheral technology in order to improve the negotiating position of the acquirer, reduce the cost and volume of acquisition, generate demand for local goods and services and stimulate the dissemination and assimilation of technology.

Process technology: Refers to the conditions, procedures and forms of organization necessary to combine inputs, human resources and capital goods in an appropriate manner to produce a good or a service. It usually has to do with process manuals, plant manuals, performance calculations, material and energy balances, distribution of equipment, etc.

Product technology: It is the part of the technological package related to the standards, specifications and general quality and presentation requirements that a good or a service must fulfill. If you want to create a package where the product technology is predominant, you should have information regarding the description and drawings of the product, the manuals of use, application and maintenance of the same, the formulas and compositions, the specifications of raw materials, assembly instructions, tolerance, etc., as well as industrial property issues such as patents and trademarks.

Cutting-edge technology: It is the most modern of all. It usually requires a high capital investment for its acquisition and few companies own it.

Disincorporated technology: It is one whose knowledge has been extracted from people or objects.

Dynamic technology: That which has a high development through the time of validity of the technology.

Hard technology: The part of knowledge that refers to equipment, products, facilities, processes and materials developed by an organization. Hard technology refers to the mechanical aspects or hardware. It refers to the automatic and systematic, in this the risk is zero because it does not involve the emotional part of the people; It contemplates everything that is protocolized and is rigid.

Emerging technology: It is one that is appearing in the economic and industrial field and is being used by some companies.

Static technology: Represents low level of development through the time of validity of the technology.

Embedded technology: These are technologies that are neither modern nor primitive.

Acquisition of Technology Incorporated into Capital: those situations in which concepts, ideas and methods are incorporated into the firm through the purchase of new capital goods and productive inputs, in which case the acquisition of Technology “incorporated into capital will be discussed. 

Acquisition of Technology not incorporated into Capital: those circumstances in which such incorporation is the result of a research activity carried out either routinely or not outside the firm or at the request of the latter, in which case we will be referring to the acquisition of technology “disincorporated or not incorporated into capital”.

Free technology: Public domain technology, which can be accessed without restrictions. Knowledge is available in full.

Core technology: A set of knowledge that are essential, inherent, specific, specific to a project, service, product or administrative technique. Such knowledge characterizes the corresponding activity by way of its basic properties and requirements.

Modern technology: It is the one produced in the last decades. It is not the most advanced.

Obsolete technology: It is the one that has been completely surpassed by another more recent one because the new technology needs less capital, less work or less of the two factors to produce the same.

Peripheral technology: Set of knowledge that are specific to a process, product or service and that are necessary for the use of core technologies; It is related to all knowledge that is not the exclusive domain of a branch of the production of goods or services, but with those that can be applied to many different activities.

Primitive technology: It is one that has been used since ancient times, requires little capital and a lot of manpower. It does not produce large profits, therefore it does not develop the specialization of the workers, nor a rapid growth of capital.

Secret technology: It is one whose knowledge is protected. It is very difficult to have access to it or its cost is very high.

Technology: In its most general meaning, it is the set of ways and ways of doing things or the set of systematized knowledge for the production of a good or a service. Often it is scientific knowledge but also knowledge organized in another way, applied systematically to the production and distribution of goods and services. Technology is the set of knowledge and methods for the design, production and distribution of goods and services, including those incorporated into the means of work, labor, processes, services and organization. Technology is driven by need, by satisfying the needs of society, the economy and business. There is a practice of privatization and restricted access to technological knowledge. Technology is a system of technical knowledge, systematic knowledge of practical or industrial arts; It consists of a series of empirical techniques, traditional knowledge, craftsmanship, skills, skills, procedures and experiences that are not based on science. Technology reflects and is determined both by the technical relations of production and by the social relations of production (it is not neutral), within a given social formation; it constitutes a concrete response to specific social economic conditions.

Trend towards quality: The clarity in the objectives of the innovation, oriented towards the search of the quality of the products and the continuous improvement within the company.

Technology transfer: Technology transmission process (technical knowledge) and its assimilation, adaptation, diffusion and reproduction by a productive device different from the one that generated it. The appropriation of technology includes knowing its nature (process, product, tacit), the effectiveness of legal protection mechanisms (patents, copyright, trademarks, trade secrets, intellectual property) and complementary capabilities (marketing, quality control and support). On sales). The transfer of technology has the following modalities: sale or purchase of machinery and equipment, licensing agreements through which the use of legally owned technology is authorized, Know-How agreements when there are no patents, technical assistance, training, contracts for administration and marketing, research and development services, consulting services, engineering services, “turnkey” contracts, etc. The transfer of technology requires the issuance of a technology contract, an agreement by means of which a transferor discloses to a concessionaire the technology to execute an operation and / or license for the use of technical knowledge. Among the basic characteristics for the transfer of technology are: the degree of complexity, level of maturity, investment, characteristics compared with new technologies and replace, the economic environment, the scientific and technological environment of the country, the company is innovative, information on innovations, benefits expected by the user and the provider, costs, knowledge and legislation, among others.

Internal transfer of technology: It occurs between companies of the same type, by a producer of capital goods or raw materials, by a technical research or information center.

Real technology transfer: It occurs when the technology acquired is received by the country’s scientific and technological structure or by companies that carry out processes of disaggregation, assimilation and adaptation of these to local needs.

Transplantation of technology: Process by which acquired technologies are used without carrying out processes of disaggregation, assimilation or adaptation in them.

Vision: Provides the frame of reference of what the company wants and expects to see in the future. The corporate vision points the way that allows top management to establish the course to achieve the expected development of the organization in the future. It must have dimensions in time, be broad, inclusive, understood by the members of the entire organization, realistic and possible.

Avowal of the National Council of Public Historians Code of Ethics and Professional Conduct

The NCPH Code of Ethics and Professional Conduct were adopted in 2007 to replace a version from 1986, this code sets forth guidelines of professional conduct expected of all members of the NCPH.

This Code of Ethics sets forth guidelines of professional conduct expected of all members of the National Council on Public History. Recognizing that public historians practice in a variety of specialized professional fields, this code incorporates reference to other codes and guidelines as appropriate. The purpose of this code is to articulate expectations of conscientious practice, not to set thresholds for certification, investigation, or adjudication. The National Council on Public History promotes ongoing discussion of ethics and professional conduct in classrooms, conferences, workshops, and professional literature as a best practice of the profession as a whole.

The Public Historians’ Responsibility to the Public

This code recognizes that the public may be defined in multiple and sometimes competing ways and that public interest is a fluid concept often formulated within the context of particular situations and subject to continuous debate. Nonetheless, ethical practice implies a responsibility to serve the public interest, as conscientiously determined in any given situation, and requires certain basic principles of professional conduct.

1. Public historians should serve as advocates for the preservation, care, and accessibility of historical records and resources of all kinds, including intangible cultural resources.
2. Public historians should carry out historical research and present historical evidence with integrity.
3. Public historians should strive to be culturally inclusive in the practice of history and in the presentation of history.
4. Public historians should be fully cognizant of the purpose or purposes for which their work is intended, recognizing that research-based decisions and actions may have long-term consequences.
5. Public historians should maintain a conscious regard for the interpersonal dynamics inherent in historical practice.

THE PUBLIC HISTORIANS’ RESPONSIBILITY TO CLIENTS AND EMPLOYERS

Public historians have a responsibility to perform work competently, diligently, creatively, and independently in pursuit of a client’s or employer’s interest, and a corollary responsibility to assure that such performance is consistent with their service to the public interest.

1. A public historian should respect the decisions of a client or employer concerning the objectives and nature of the professional services to be performed unless such performance involves conduct which is illegal, immoral, or unethical.
2. A public historian should maintain exclusive supervision over historical research studies and investigations.
3. A public historian should exercise independent professional judgment on behalf of a client and employer.
4. A public historian should not solicit prospective clients or employment through the use of false or misleading claims, harassment, or duress.
5. A public historian should not offer professional services by stating or implying an ability to influence decisions by improper means.
6. A public historian should not accept or continue to perform work that is beyond his or her professional competence.
7. A public historian should not perform work if there is an actual, apparent, or reasonably foreseeable conflict of interest, or an appearance of impropriety, without full written disclosure to the affected client/s or employer/s.
8. A public historian is obligated not to disclose information gained in a professional relationship when the client or employer has requested such information to be held confidential. Exceptions to the principle of non-disclosure must be made when required by process of law. Exceptions may be made when disclosure would prevent a violation of law or prevent a substantial injustice to the public interest. In such instances, a public historian must verify the facts and issues of the circumstance and, when practicable, make every reasonable effort to obtain separate opinions from other qualified professionals employed by the client or employer and every reasonable effort to obtain reconsideration from the client or employer.
9. A public historian should not use the power of any office or professional relationship to seek or obtain a special advantage that is not in the public interest.

THE PUBLIC HISTORIAN’S RESPONSIBILITY TO THE PROFESSION AND TO COLLEAGUES

Public historians should contribute to the development of the historical profession by advancing knowledge and improving methods, systems, procedures, and technical applications. More broadly, public historians should respect the professional views of their colleagues and peers in all professional fields. Public historians should strive to increase the diversity of the profession to reflect more closely the demographics of society. Equally important, public historians should strive to increase public understanding of the practice of public history.

1. A public historian should accurately represent the qualifications, views, and findings of colleagues.
2. A public historian should have a working knowledge of the methods, principles, and standards pertinent to specialized practice fields as appropriate to projects undertaken for clients or employers.  A public historian also should be familiar with the broadly applicable Statement on Standards of Professional Conduct adopted by the American Historical Association.
3. A public historian should approach each research problem as unique, examine the applicability of research theories and methods to the facts and analysis of each particular situation, and use methods appropriate for each situation.
4. A public historian also should analyze each research problem within an appropriate body of scholarship drawn from all pertinent disciplines.
5. A public historian should share the results of experience and research that contribute to the body of public historical knowledge.
6. A public historian who reviews the work of other professionals should do so in a fair, considerate, and respectful manner.
7. A public historian should contribute time and information to the professional development of students, interns, beginning professionals, and other colleagues.
8. A public historian should welcome opportunities to represent cultural diversity in his or her work and to enfold members of underrepresented groups into the profession.

THE PUBLIC HISTORIAN’S SELF-RESPONSIBILITY

High standards of professional integrity, knowledge, and proficiency are the hallmarks of excellence in public history.

1. A public historian should represent professional qualifications and education accurately and fully.
2. A public historian should incorporate continuing education into his or her professional development.
3. A public historian should respect the rights of others.
4. A public historian should not discriminate against others.
5. A public historian should not deliberately commit a wrongful act which adversely affects his or her professional fitness.
6. A public historian should critically examine personal issues of social conscience as distinct from issues of ethical practice.

Review of Reinventing Leadership: Making the Connection Between Business and Politics

“The distinctions between leadership and management constitute a major shift in our thinking about how the private sector should be organized. A mere [six] decades ago, leadership was a conception business and industry generally chose to ignore. But now the best and brightest afree that leadership belongs in the private sector as much as it does in the public one. The only question is how exactly leadership and management should be defined” (147)

Reinventing Leadership: Making the Connection Between Business and Politics by Barbara Kellerman was published by the State University of New York press in 1999 and is volume in the SUNY series in Leadership Studies. At the time of the book’s publication, she was the Director of the Center for the Advanced Study of Leadership at the James MacGregor Burns Academy of Leadership at the University of Maryland.

While an academic work, the book’s message is also directed to leaders and managers in both the upper reaches of the private sector as well as the public sector – something that is reflected in its style. The first premise of the book is that a number of significant failures of government has shown that earlier models of political leadership are inadequate. The second is that changes in social norms and conceptions of leadership wrought by political events have made traditional notions of management that came into prominence in the period of the 1950s to the early 1970s no longer relevant. The third and final premise is about the advantages of the convergence and synthesis of leadership values that embraces traditional government and business positions. Given the increased necessity of business and government leaders to communicate and collaborate this helps to develop a common language so as to better understand each other and the interests they represent – the public and private capital interests.

Kellerman defines management as the efforts of those who hold a position of authority at some level to ensure that the activities of a firm continue as needed and that leaders are those that engage followers in the mutual pursuit of agreed-on goal representing, usually, significant and not merely incremental change. These two conceptual inputs for the synthesis she believes is now needed were defined by various authors writing for either the professional or government leader/manager. By showing the typical continuing education paths for both the professional and the government official and analyzing professional literature – such as Harvard Business Review publications as well as an impressively large list of books on management and leadership in corporate America – Kellerman shows how divergently the ideals character traits and habits of thought for each social actor was first conceived – and how large political scandals and failures drew the two together in a way that more contemporary theorists would categorize as a mix of neoliberal or technocratic with a human face.

Whereas previously managers did not view their role as to influence – simply to command, control and if necessary to coerce – the changes in cultural and legal norms mean that this no longer was valid. In some workplaces where there hasn’t been much change wrought by America’s changing labor laws, such as extraction and agricultural industries, these were few alteration in norms. In worksites dealing with more intangible goods and services, like those of the many value-added business-to-business industries, the impact was significant and well commented on in the journalism and editorials of the professional and government press.

A number of seminal business leaders from the 1960s to the 1980s are presented as case studies to show the varying trends in how leadership was approached as a theory and practice and a number of common threads highlighted. One such theme found in the private industry, but not in that of the public, was of the need for management to “know themselves” in a way that included rigorous self-assessment so as to become more aware of the interpersonal dynamics at the workplace and within the market in general. If this all sounds curiously “new-agey,” or vaguely psychotherapeutic in nature” Kellerman says in one of her many amusing asides, “that’s because it is” (76).

Another of Kellerman’s observations is that while egalitarian ideas increasing permeated literature on leadership in business that in practice a noticeable change in work relations towards something that might be defined as “workplace democracy” never materialized. In its stead there became an infatuation with “collaboration” and “teams”. While anachronistic to this book, a good modern example of this is found in Agile, Scrum, and DevOps, coding and testing team practices associated with software development firms that shown in their literature and practice to be highly consultative and communicative in nature. The scandals of presidents and CEOs as well as changed in legal regulation – especially the opening of borders for trade – all feed into the changing workplace dynamics. Because certain types of labor could be more easily moved in the face of organized discontent by workers, which increased the reserve army of labor able to replace those in other, less at risk sectors, there was an additional shift in those work cites as well. Not a point which is gone into in detail – it seems that the effects of this would be another large influence for the imperative to blur the lines between public and private leaders and managers. And on this topic, Kellerman cites three specific imperatives wrought by the new, post-NAFTA globalized:

  • Politicians will have no choice but to take cues for their corporate counterparts
  • Business executives will have no alternative but to learn lessons from leaders in government
  • Leaders in both domains will have to reinvent themselves to create something altogether new.

In the closing section of the book Kellerman extensively quotes a number of business leaders to make the point that “although real-world problems are interdisciplinary, and solutions are interdepartmental, interprofessional, interdependent , and international, our institutions – particularly our institutions of higher education – start with a heavy bias against breadth.” (219)

The book closes with a description of the image of the new ideal for a political leader and business leader. The traits that they should have, the challenged they face, the strategies that they deploy and the values they embody to strive are listed as they could go on the back of a baseball card. All in all, it’s a fascinating read on how Leadership and Management as a concept and practice have evolved in America and how it is that one should act if one desires to be a Leader or Manager in the modern political-economic environment.

This is from another of Kellerman’s books.

Review of Culture and Management

Culture and Management by Zygmunt Bauman was published in Parallax in 2004 and speaks to the managers concerns with the managed, and how this relationship have evolved in the United Stated over the past 40 years.

Despite it’s having existed in practice for thousands of years, the sociological idea of culture was first spoken of as a term for the management of human thought and behavior. Industrial production processes that were increasingly complex and in need of absolute repeatability and precision, unlike the previous artisan approach to production, mean that there was an increased need for normative regulation within work spaces. Being part of a purposeful activity, certain human traits were seen to be like fertilizers to a productive process and thus human beings are made. Selective cultural improvement in the work site transpired by training and education in the “right” way of being. After connecting this term to another relatively new word – management – Bauman links the concept to ‘husbandry’ in the human sphere, ‘breeding’ in behavior and ‘cultivation’ of character. After this he makes a point to point out the dialectical characteristics, the interpenetration of opposites, which exists within the relationship:

“Just like ‘agriculture’ is the vision of the field as seen from the perspective of the farmer, ‘culture’ metaphorically applied to humans was the vision of the social world as viewed through the eyes of the ‘farmers of the human-growing fields’ – the managers. The postulate or presumption of management was not a later addition and external intrusion: it has been from the beginning and throughout its history endemic to the concept. Deep in the heart of the ‘culture’ concept lies the premonition or tacit acceptance of an unequal, asymmetrical social relation – the split between acting and bearing the impact of action, between the managers and the managed, the knowing and the ignorant, the refined and the crude.”

Bauman then quotes Theodore Adorno to point out how “the “managers-managed” relationship is intrinsically agonistic; how the two sides pursue two opposite purposes and are able to cohabit solely in a conflict-ridden, battle-ready mode. Put another way, from the Wobbly Constitution, the worker and the owner have nothing in common. As Baum himself puts it – “the management’s plot against the endemic freedom of is a perpetual casus belli.”

The ideas which structure workplace interactions – management – are codified into formal knowledge via educational institutions – like the Catholic University that I am now in – and the different approaches to workplace administration are taught. Culture creators are those that help apply changes to those norms, whereas managers are those that help maintain the norm. There is always a tension here too, as one seeks to change the status quo that the other previously enforced.

Bauman then quotes Hannah Arendt at length regarding the increasing liquidity of the world and its effect on human exchange in the workplace.

The second managerial revolution is the switch from normative, explicit regulation to a more implicit one.

First Managerial Qualities                  Neoliberal Model
Normative Regulation                                   Seduction
Day to Day Policing                                       PR
Routine                                                            Constant Change
Highly-Regulated                                          Precarity

Understanding culture as operationally meaning something like ‘pattern maintenance’ of a “kind of totality inside which any deviant behavior of human units is promptly spotted, isolated before irreparable harm is done and swiftly defused or eliminated.” Another words whereas the logic of “solid” modernity was following instruction; the “liquid” modernity is doing it yourself. Bauman is very critical of this, quoting other historians and ethnographers as this helping to contribute to a culture of “disengagement, discontinuity and forgetting.” Bauman does not go on into any extended description of how thus to unravel this negative aspect of modern workplace culture, but does state that management needs to be aware of this unless the quest for abstraction, branding and profit – the reification of thought, objects and human relations – lead to workplace problems that suffocate their relationship. Cultural events, a fancy phrasing for company events, can thus be space to reinforce the norms required for a good workplace culture.

Review of Organizational Knowledge Creation Theory: Evolutionary Paths and Future Advances

Organizational Knowledge Creation Theory: Evolutionary Paths and Future Advances was published in the Organizational Studies journal and was written by Ikujiro Nonaka, Georg von Krogh and Sven Voelpel and explains the process of “making available and amplifying knowledge created by individuals as well as crystallizing and connection it o an organization’s knowledge system.” As knowledge is something that is embodied within the body, knowledge creation is something more than just the transmission of information. Information itself is never interpreted outside of a specific embodied context – a basic presupposition within the education process for becoming a teacher – and therefore more than just the expectation of immediate assimilation following consumption needs to be presumed when developing organizational knowledge within a firm.

SECI Model of Knowledge Conversation

Knowledge expands through a four-stage conversion process:

Socialization aims at sharing tacit knowledge among individuals.
Externalization aims at articulating tacit knowledge among individuals.
Combination aims at combining different entities of explicit knowledge.
Internalization aims at embodying explicit knowledge into tacit knowledge.

The authors then use a Japanese concept, ba, to explain the different qualities of the spaces of encounter (originator -> context -> communication -> receiver) within which information and knowledge is transmitted.

There are for the authors three types of Ba – or Spaces of Meeting: Cyber, Interacting, and Originating.

Organizational epistemology is an important concept, and ought to be understood as a continuous process wherein the individual limits and constraints created through prior information and past learning is able to become newly actionable to the present job to be done. It views knowledge as something that “is oriented towards defining a situation so as to act on it rather than solving the depicted and manipulated pre-given problem.”

Knowledge, however, is fragile, and there are many ways that obstacles to coherence, creativity, sharing and innovation can emerge. Thus it is that an scientific method ought to be applied that relates to the needs of the business. Conversion, in which individuals externalize the experiences of knowledge, need not occur with every new bit information garnered by every individual, but an organizational design and knowledge creation and transfer processes should be in place to ensure that knowledge pertinent to Marketing is shared by Engineering should it have a potential use value. Because of this, the authors then look at standard business models to determine to an extent who needs what.

Hierarchy, Heterachy, and Hyper-Text

Hierarchy is what is most common in organizations where there is little variation in the work to be done – such as factories, fast-food restaurants, and construction. There is little variation that needs to be done, so there is little need from management for input from workers.

Heterarchy is categorized by its form. Assets and leadership are dispersed; communication is horizontal, and coordination informal and network based. reorganization results from “new demands for specialization and coordination as revealed by knowledge creation.”

Hyper-text – In a bureaucratic and hierarchical business system, this is a parallel project system layer that consists of a project teams that engaging in knowledge creating activities.

The authors’ connection between organizational knowledge, daily operations and the duties of company directors is clear: “providing accurate, timely and complete information for decision making is one of the most critical tasks of leadership.”
When understanding that the ba spaces are those where Middle managers are disseminating information, attitudes, etc. their role as knowledge producers, means for transmitting and ensuring that information was properly better comes into play. While reading this, I couldn’t help but think of my own training, both in the classroom as a teacher and in the classroom as a student discussing a different model of pedagogy and assessment.

The organization is in a state of becoming, moving between cycles of sense-giving from the top and sense-making in the middle, to sense-giving in the middle and sense-making at the top. There is no one “best model” for businesses, but rather they see that a business system, a project system and a knowledge system working in parallel that properly and efficiently coordinated and enables knowledge is the optimum for companies. This is and much further explanation on the topic gives rise to the “knowledge-based firm” concept that has recently come to dominate models used in Business education.

Outsider Knowledge Activists

Professional consultation is a common business practice as the focus of the business is sometimes so fixated on the task at hand they firms are unable internally to devote the attention required to weighing the benefits and liabilities of new practices and products. These people typically cause friction between themselves and the Performance Engine, but this is a “creative abrasion” that leads to new opportunities for knowledge creation. These people communicate future prospects and help provide overarching goals for the knowledge creation being developed in the different teams of an organization. They were the people with a “bird’s eye perspective” that helps firms achieve a new potentiality for being within the marketplace.

Leadership

One of the main directives for someone in a leadership position is to promote the SECI process. The primary functions of a leader is to:
1. Articulate knowledge visions and communicate them in and out of the organization.
2. Break down the values and visions into applicable concepts, images, and activities that direct the process of knowledge creation
3. Ensure that the knowledge system is being used, and considering how to help it evolve.
4. Define the organizational units, coordinate knowledge system layers.
5. Foster and nurture middle managers to act as knowledge producers
6. Provide space for ba and bring the right people together for it.
7. Search for supports, create internal groups and activities
8. Keep the bas energized and directed.

If it seems that if this were the case that all organizations and firms would be the same, however, they are not. The authors provide a telling explanation as to why that I quote here at length: “Organizations are dialectic phenomena that cannot be analyzed through a simple set of premises about behavior, be it profit or utility maximization, bounded rationality, altruism, human values, and social norms. The power of explanation lies in prudently combining insights from theories and research that draw upon different premises. In so doing we come closer to understanding the multifaceted nature of the organization.”

Review of Single-Loop and Double-Loop Models in Research on Decision Making

Double Loop Learning – How to Lead Knowing Everyone has Your Back.

This article, Single-Loop and Double-Loop Models in Research on Decision Making, was written  by Chris Argyris and was published in Administrative Science Quarterly, Vol 21

Single-loop decision making is the norm within most organizations, and people are encouraged to learn so long as they do not come to question the fundamental design, goals, and activities of their organizations. This is effective for general organizational issues, however limits the ability to explore other options of business activity. In Double Loop learning, one is able to postulate about changing the fundamental aspects of the organization itself. Being able to ask questions and posit counter- examples allows for the creation of a more “innovation-friendly” environment.

As stated earlier, single loop is a behavior strategy in organizations to control the environment, protect the group and ensure that work is done according to the established protocols. While the authors don’t use the term, they state that in business conditions that are similar to those of the 4th Industrial Revolution that this is a quick way to start to lose. The negative effects of single-loop decision making means proper indicators can get ignored, new market factors can be missed, and business opportunities passed by. Unfortunately as the collective effect of these missteps start to come to light, they could be doubled down on and becomes hard to put back in the proverbial bottle: Under these conditions, top administrators tend to start engaging in a number of non-optional, emotionally driven attitudes: such as becoming “frustrated with the ineffectiveness of the decision-making process and react by striving to increase control, by increasing secrecy about their own strategies, and by demanding loyalty of subordinated that borders on complete agreement with their views.”

In Single-Loop decision making personal ideologies, cognitive rigidities and the concept of loyalty inhibits the generation and communication of valid and meaningful information to upper levels more so than double-loop. Additionally, key officials will repeatedly and privately attribute motives to others, which then influences the information that the officials give and the estimation of its importance and direction with how they receive it. This, obviously, is a problem.

Since the double loops strategy for decision making involved sharing power with anyone who has competence, and with anyone who is relevant in decision or implementing the action, or in the definition of the task , or the control of the environment that this need not happen. Rather than decision being about asserting power, it is about building viable decision-making networks in which “the major function of the group would be to maximize the contributions of each member so that when a synthesis was developed, the widest possible exploration of views would have taken place.”

That this article was written in 1976 and is advocating for an inquiry-based model of decision making is to me impressive. While stating that the ability to quantitatively test transitions from one model to another are difficult – he stated that it would also be a longer process as it involved exploration of an organizations basic values and feelings that requires a shift in the behaviors of individuals, intergroup dynamics and organizational processes. Making the time to do this, however, can lead to large organizational learning gains. Management, for instance, come come to see that their sense of a need for unilateral control is part of a self-fulfilling prophecy as they do not do a good enough job providing themselves or encouraging the transmission or pertinent information.

Group discussions are, however, expensive and given that theories-in-use of individuals and groups within an organization require significant effort – what then to do? The authors suggest multiple advocacy. Admitting that it is a difficult balancing act to follow – it means that “advocates” form for specific positions to take regarding a firm’s strategy and tactics. The decision making strategy is similar to the British magisterate system, and is a great example of how staging and theatrics can highlight the concept of embodied knowledge. The Multiple Advocacy process presumes three conditions: (1) No major maldistribution of power, information, analytical resources, competence (2) persuasive skills amongst member and participation fo the Chief executives (3) time for adequate exchange of ideas. People then debate it out and a winner is chosen. I, unsurprisingly for a debate teacher, prefer this. I have a high tolerance for competition and am typically averse to getting into the “in-group” mindsets but instead seek to chart a clear intellectual path based on available evidence.

Review of The Oslo Manual

The Oslo Manual was published by the Organization for Economic Co-Operation and Development and concerns itself with The Measurement of Scientific and Technological Activities. They are a set of proposed guidelines for collecting and interpreting technological innovation data written for and by experts. The scope of the manual is having a set of terms that can be used to understand innovation indicators within market analysis as well as a number of guidelines that can be enacted in order to obtain meaningful indicators of technologically improved process or product (TPP) innovation. TPP innovations are defined as those which require an objective improvement in the performance of a product or service. The manual continues on to address issues related to data collection and survey methods and also puts into context this particular manual with other families of manuals; other methods used for obtaining data or defining it and other means of surveying that can be used. I’m going to provide below a brief overview of some of the elements of the manual, but given it’s technically it really ought to be read from front to back in order to understand the full OECD approach to collecting, classifying and analyzing innovation data and other indicators of TPP innovation. In a vast oversimplification of what the manual covers – it could be said to be mainly concerned with:

• What is to be measured?
• How should it be measured?
• Where should it be measured?
• What do the measurements mean?

Science, Technology and Innovation policies emerged in part from the context of the Second World War. Ironically enough, American businesses starting to apply some of the sectoral economic policies of the Soviets after witnessing how quickly they were able to industrialize their economy. As one of the primary means that States saw a means for obtaining economic prosperity in the new post-war liberal international order was innovation, the social sciences started to analyze what would soon become a new field of research. The manual isn’t concerned with situating itself with this historical framework – other readings that I’ve been doing have done that – but I think it’s important to understand that it’s a collective product demonstrating the growing recognition of the imperative for businesses to innovate and the concern as to how to stay innovative in a global marketplace wherein there are many more options to reach the strategic goal of satisfying an identified market demand.

Because of this dynamic TPP transfer factors are a major concern of the manual. Transfer factors include linkages between firms, the presence of expert technological gatekeepers within a firm; international links; the degree of mobility and authority of expert technologists; the easy of industry access to public research and development programs; spin-off company formation; ethics, community value systems, trust and openness within a network; as well as codified knowledge in the form of patents, the specialized press and scientific journals. This complex system of interlocking factors that helps determine innovation at the firm level is called the “innovation dynamo”. Obstacles – such as skill shortages, problems of competence, financial issues, or appropriation – can have huge impacts not only on firms, but on policy as well. For instance, a policy might be created in order to assist a specific economic sector, say software as as service (SaaS). If the predicate on which it is built (i.e. there are a sufficient number of workers with a specific skill set) is not sound – it could lead to policies that harm rather than hurt that sector.

TPP innovation activities have three possible endings. They are either implemented successfully in order to create a new or technologically improves process or product, aborted for some reason, or are ongoing in their implementation. They are either endogenous (internal) to the firm or they are exogenous (external) to the firm.

How to collect, i.e. via a subject or object approach, is examined; as is how to distinguish between something that is versus is not a TPP innovation; how to prototype experiments; the relationship between OECD’s unites and that of the International Standard Industrial Classification of all Economic Activities (ISIC) and the European Community (NACE) in relationship to understanding international surveys; how to properly structure and distribute surveys; how to map the diffusion of innovation; breakdowns on types of innovation; how to distinguish between general expenditure for process improvement and those that classify as TPP; and procedures.


In short, it’s very technical reading about a specific topic. Does this have a relationship to the research you’re doing? Well then, read the bloody manual.

Review of The Other Side of Innovation: Solving the Execution Challenge

The Other Side of Innovation: Solving the Execution Challenge by Vijay Govindarajan and Christ Trimble was published by the Harvard Business Review Press and contains a wealth of research based insights on how to successfully execute innovation projects in a company. Because they study such a large variety of innovation endeavors in a variety of contexts, because of support for the Center for Global Leadership and the Tuck School of Business, they are able to generalize from the case studies and proscribe general laws in situations based on the elements of the dynamics at play. The authors’ case studies include an extended explanation of lessons garnered from Thompson Corporation and News Corporation’s (publisher of the Wall Street Journal) addition of computer software-based services to their organization which is exactly the sort of innovation initiatives I’m researching in detail for my PhD thesis at UPB in Medellin! Needless to say that plus the wealth of psychological considerations for successful project management and development makes this an ideal book for leaders.

The two sides of innovation are ideation and execution, and in this instance, the other side of innovation in the title means execution. Brainstorming ideas can be real fun, they say, but ideas are only the beginning. Without implementation, action, follow-through, execution, whatever you want to call it – then this means nothing. The true innovation challenge lies in the idea’s transition from imagination to impact in the workplace.

If the book could be said to have a single main takeaway, it’s that each innovation initiative requires a team with a custom organizational model and a plan this is revised only through a rigorous learning process. Because of this there must be much conscientious social engineering on the part of the innovation leader – which I will explain more about further in this book review.

Within companies their primary activities can be generally categorized under the concept of “The Performance Engine”. This is the dedicated team of full time workers that is in charge of ongoing operations. While they are able to engage in small scale continuous process improvements and initiatives in product development that are similar to previous activities – there is little scope for innovation to be achieved within the organization. Too much is needed so a new team must be developed to help implements it. This dynamic can be easily put in the following logic:

Project team = dedicated team + shared staff

As the names suggest given the groups thus defined, the shared staff is are those that work primarily on the Performance Engine but also have Innovation Team Duties. The Dedicated Team are those that are full time workers on the initiative.

The partnership, not just either team, executes the project plan. Because the focus of each group is very different – one is in repeating established work rhythms and the other determining the optimum means of establishing an innovation initiative – there are several principles that must be considered when deciding how to assemble a dedicated team. Not only do you need to identify the skills needed and hire the best people that can be found – even if their pay scale is above normal operations – and then you match the organizational model to the dedicated teams job. In the manner that the authors describe it, it almost reminds me of lesson plans for the first day of school – bring all of the individuals that will work on the innovation project together then start to transform them into a team by defining new roles and responsibilities; decorating and starting to fill in the new, separate space wherein the work activity will transpire; and even doing some role playing as a team in order to make charts of who will do what. After this a guided conversation needs to be headed by the innovation leader on how the usual performance based metrics for work are not going to be applicable in this work situation. This is important because the dedicated team and the performance engines need to know that even though they will share some existing processes and personnel, that they have different objectives and should have a different culture.

Defaulting to “insider knowledge” can be a trap the needs to be escaped from, and cautionary advice is provided on hiring within the organization. Not only can organizational memory eclipse the work at hand, but successful past performance aren’t reliable indicators in an innovation initiative setting as the processes are so different.

Because the key difference between typical planning processes for the performance engine and the best practices for innovation are so different, the human skills required for such an undertaking are significant. Hence the book is as much instructions for proper processes and principles as it is a guide to dealing with persons. Conflict between teams, within teams, and between executives, management and innovation leader all can have a degenerative effect on successfully execution. Dissipating a number of the myths associated with innovation – such as it being necessarily disruptive or distracting from the Performance Engine – is one of the key factors for maintaining successful control of the project.

The authors recurrent emphasis on the importance of documenting and sharing this information and be aware of the learning process reminds me of the frequent imbrecations that I heard as a teacher to ensure that my testing of students was part and parcel of a larger educational journey that I was leading them on. By ensuring that, excuse the pun, no child was left behind I ensured that I wouldn’t find myself in a situation where some students not making the appropriate learning gains. Since learning cannot be left to intuition – it’s important to have a rigorous learning process in place that is based on the scientific method. As such it becomes easier to refine speculative predictions into reliable predictions. With everyone involved being on the same page as to historical, current, and projected status of the initiative – from former operational hypothesis to what custom metrics metrics are being used to cost categories – it makes it easier to discuss assumptions and determine the means for best keeping the program on the correct trajectory.

Each chapter of the book ends with a series of proscriptive lessons garnered from analysis of the business cases presented– such as “Never assume that the metrics and standards used to evaluate the existing business have relevance to the innovation initiative” as the depth, power balance and operating rhythm of the two organizations are so different. This was an appreciated way of consolidating the lessons in and fast matter that I appreciated. This and the general style and concise definitions throughout made me appreciate the authors greatly. I look forward to reading Vijay Govindarajan and Christ Trimble’s other book 10 Rules for Strategic Innovators.

Those interested in seeing a SlideShare summary of the book can look here.

Review of Leading Change

Leading Change by John P. Kotter was published by Harvard Business School Press and is an action plan for achieving innovative changes in the workplace. Published in 1996, at the time when the 4thIndustrial Revolution was just starting to whet the imaginations of investors and all things internet related were hot, the book presents a series of steps for business leaders to help their companies successfully adapt to the changing market conditions. With the increased pressure for efficiency and adaptability to the new market conditions which have increased the speed of business and shaken much of the business environment stability that previously existed.

It is based on John P. Kotter’s extensive research experience and conversations with major business executives that provides him with the crux on which innovation initiatives either fail or flourish: Ideating, enacting and sustaining cultural change in the workplace. It is not enough, he warns, to be aware of new pressures and possibilities for constructing value – to truly adapt requires a long-term view that many managers have been taught vie years of on-the-job experience to not consider. Because of the creation of what he calls a generalized “overmanaged, under led corporate culture” he states that a different type of business figure is needed to help instigate, inspire, and incite meaningful change within companies: a leader.

There is a significant difference between management and leadership, and those that have trained and worked for years in the former typically are unaccustomed to being able to accomplish the latter. They think in terms of weeks and months rather than months and years. They are accustomed to “following the book” rather than reviewing all of the available data that ought to influence future planning, engaging stakeholders on their perspectives and then writing a book. They are typically not very charismatic, but eminently practical. What follows is the book is a detailed overview of a successful change model; explanations as to why it is so important for the steps to be followed in order; examples of effective and ineffective solutions to problems that present themselves in the process considerations to be made to ensure that the change process is fully supported by the middle and upper-level executives; and approaches to ensuring that the cultural changes promoted are sticky.

  1. Establishing a Sense of Urgency
  2. Creatindg the Guiding Coalition
  3. Developing a Vision and Strategy
  4. Communicating the Change Vision
  5. Empowering Broad-Based Action
  6. Generating Short-Term Wins
  7. Consolidating Gains and Producing More Change
  8. Anchoring New Approaches in the Culture

Common errors to organizational efforts include the following: allowing too much complacency, failing to create a sufficiently powerful guiding coalition; underestimating the power of vision; under-communicating the vision; permitting obstacles to block the new vision; failing to create short-term wins; declaring victory too soon; neglecting to anchor changes firmly in the corporate culture. The appearance of these errors within the change effort has serious consequences. New strategies aren’t implemented well; acquisitions don’t achieve expected synergies; re-engineering takes too long and costs too much; downsizing doesn’t get costs under control; quality programs don’t deliver hoped-for results. Kotter also explains how it is that such process deformations can occur and accrues and how to watch out for them.

For instance, if there are no short-term wins built into the process it is likely that it will be abandoned. New forms of business intelligence guiding strategy may be ignored if there are secular reasons for non-performance that are not addressed by management. Interdependent processes that have been marked for change may seem excessive and leads to such an escalation that employees push back. Because of this, it is of the utmost importance that an effective innovation vision not just be presented, but also to be explained, talked about when appropriate in meetings by management, referred to when discussing the rationale behind a change in process that is not always adhered too, etc. These and more examples provide the basis for the specific order of the process described within the book and how to avoid getting off course. Following these steps allows a leader to truly anchor in the novel and innovative approach into the company culture.

Kotter’s depiction of an effective vision is it’s containing the following characteristics:

Imaginable: Conveys a picture of what the future will look like

Desirable: Appeals to the long-term interests of employees, customer, stockholders, and others who have a stake in the enterprise

Feasible: Comprises realistic, attainable goals

Focused: Is clear enough to provide guidance in decision making

Flexible: Is general enough to allow individual initiative and alternative responses in light of changing conditions

Communicable: Is easy to communicate; can be successfully explained within five minutes.

This model is somewhat similar to Chip and Dan Heath’s Made to Stick model of marketing – Simple, Unexpected, Concrete, Credible, Emotional, Stories – and similarly emphasizes the importance of interpersonal qualities to gaining buy-in by those involved in the innovation-change process. Some people that don’t follow the new direction will have to be let go, especially those with positions of power whose hypocrisy (saying that they’re following the new direction but actually not) causes friction. The inverse can be said of those that are lone leaders working to assisting in a company’s innovation change project. Kotter tells a story about a General Motors division that had been a highly effective leader of a transformation program, but how after step 7 –  Consolidating Gains and Producing More Change – he was immediately fired so that step 8 –  Anchoring New Approaches in the Culture – didn’t have a sufficient amount of time to express itself. The result, within 6 months everything went back to the way it was and the gains that were starting to be seen were lost – along with the momentum in the right direction. Only after three stumbling quarters went on did the managers start to admit that they had slipped in their adherence to the structure that was to lead them to success!

Kotter’s cogent and informed book ends with a section that reflections on the modern business world with words that I resonated with given that I’m reading this as part of my doctorate program in Innovation and Technology Management at UPB. The last chapter of the book is titled “Leadership and Lifelong Learning” and in it, he describes how the prototype of the 20th to mid 21st century executive is no longer applicable to the modern business world. He shares several anecdotes of entrepreneurs and middle managers that he’s met who, with the combination of inborn ambition and helpful connections and executives who were able to radically scale their leadership skills and thus radically increase the competitive capacity of the businesses that they were involved with. Their willingness to seek new challenges and reflect honestly on their successes and failures leads not only to the expected knowledge and leadership skill increased but an uncanny ability to deal with an increasingly competitive and fast-moving economic environment. Given that this path and those goals were what motivated me to enroll in the program I’m now in, it was nice to read that someone like Kotter in a way confirmed that I was talking the best path to master the skills needed for the age of the 4th industrial revolution.