Innovation and Technology Management
Purpose of Course
This is an advanced management course on technology and innovation in established organizations. It is designed to increase your effectiveness and skill in analyzing, managing, and understanding issues related to technology and organizations. It covers both strategic choices and internal management activities. As the management of innovation requires the creative synthesis of several functional areas, this course integrates perspectives from strategy/policy, organizational behavior and the management of research and development activities.
The course is designed for the general manager - no technical background is assumed. We will, however, be exploring a number of different technologies during the quarter. The cases and readings are designed to cover a broad spectrum of technologies, and you will be exploring the technology of your choice in depth as part of the required course project. The focus of the course is not on specific technologies, however, but on developing your skills in analyzing technology issues and making recommendations.
Course Overview
The course consists of three basic sections, which move from macro to micro level issues related to managing technology and innovation. In Part 1, we will consider issues related to technological evolution. How do new technologies arise and what sorts of organizations sponsor different types of technological breakthroughs? How do standards and infrastructure emerge and reinforce the dominance of various technologies? In this section, we will also briefly consider policy issues related to governmental influence on technological evolution.
In Part 2, we move from the environmental and technological level of analysis to the firm level.
In this section we are concerned with firm level strategic issues related to technology. We will consider three broad issues in this section. First is the issue of developing core technological competencies. Fundamental to this is a firm's ability to make strategic decisions about protecting its intellectual property. As part of this section we will explore the "rules of the road" of the intellectual property system.
The second issue is how established firms respond to significant technological threats. What options are available and how might a firm consider which option is best? This requires a consideration of both the firm's capabilities and the nature of the technological threat.
The third issue related to firm level strategy is the use of capabilities of other firms. Creating value in technology requires consideration of how to leverage the capabilities of other firms. We will discuss how a firm might select and work with technology partners -- what issues need to be considered in these types of interorganizational arrangements? We will also review two large R&D consortia, MCC and SEMATECH, and the issues involved in transferring technology among consortia partners.
In Part 3 of the course, we move inside the organization and consider internal management issues related to innovation and technology. First we consider the special case of managing companies with high-risk technologies, e.g., nuclear power plants, airlines. How can companies manage the potential for catastrophic loss that is associated with these technologies? Next we consider issues related to innovation in groups and individuals. How can managers create environments that encourage innovation, especially innovation in groups? Along with this are issues related to managing R&D professionals and overcoming the NIH ("not invented here") syndrome. Finally, we consider culture and rewards in the high-technology firm. How do culture and reward systems encourage innovation?
We finish by returning to the beginning with a consideration of executive leadership and innovation. How can executive leaders manage the change process, and act as architect of organizational innovation? This involves a consideration of all the issues covered in the course technological evolution, policy, competitive and cooperative advantage, and internal management issues.
Instructional Method
All sessions include a case which will serve as the focus for class
discussion. Some are standard Harvard cases, some are videos. We will also
have some guest speakers that will discuss issues related to technology
management in their own companies. Much of your learning from these guest
speakers will stem from your ability to ask relevant questions, so please
prepare several questions in advance of each visit.
Most sessions include readings in addition to a case. The readings are
meant to provide some orientation to the problem addressed in the case,
and to stimulate your thinking about the case. Consequently, we will not,
as a rule, spend classroom time reviewing the readings per se; it will
be assumed that you grasp the reading and have considered its ideas in
your own case analysis.
Innovation Project
The purpose of this project is to give you an opportunity to (1) integrate concepts from different sections of the course, (2) apply material to a realistic setting, and (3) increase your knowledge about a specific industry or technology.
Your assignment is to pick a real organization to which you have reasonable access. Access can be by phone or in person. Identify and describe a problem or opportunity this organization faces that involves serious issues of innovation or technology. This could include a potential product or process innovation, technology strategy, the introduction of new technologies, or even innovations in managerial practice.
Write a paper, where you analyze the problem or opportunity, identify how the problem/ opportunity could affect the organization's prosperity and/or survival, and recommend a plan of action for management to solve the problem or exploit potential benefits of the opportunity. Write the paper as a consultant's report to a specific person in the organization. It does not have to be the CEO. You can use fictitious names. But you must clearly specify a particular role whose occupant would read your report. Assume your reader, like most real managers, has other pressing concerns and a general lack of enthusiasm for your issues. Convince your reader that it is crucial to do something. Be as concrete as possible in what you want them to do, and why.
Following is a suggested guideline for the content of the assignment.
(1) Industry/Technology Analysis: What industry is the organization in? What key environmental and/or technological factors have affected this industry? How has the organization's technology evolved over the past 10 years? What is the organization's strategic position, and has it changed over the past decade?
(2) Organization Analysis: What is the organization's critical innovation/ technology problem or opportunity? Why is it critical? What is the history of the organization with respect to this problem or opportunity?
(3) Organization Recommendations: Given your analysis above, recommend a plan of action for management to solve the problem or exploit potential benefits of the opportunity? What key factors must management attend to? How should management implement your recommendations? What cultural, strategic, and leadership issues have to be managed in order to implement your recommendations? Anticipate problems that may arise in the implementation of your plan. Remember that the most likely reaction to any report is inaction. If you want something different from that, make compelling arguments for change.
(4) Methodology: Who was interviewed, sources of industry and organization data.
Each project report should have a one page executive summary where your key observations, suggestions and themes are succinctly discussed. Projects should be no longer than 20 pages of text, plus exhibits. Less is more!
A progress report is due Tuesday, May 7. In this progress report, describe the organization you have chosen to study, how you will gain access to the organization, data sources that will be used, and the basic problem/opportunity that the organization faces. If your group has not "closed the deal" on one organization, list your alternatives and describe their pros and cons.
Final reports are due at 5:00 p.m. on the last day of class (June 4). Late papers will be accepted only in the case of a personal emergency.
Readings to be handed out in class are noted as such. Case preparation questions follow the course outline.
Reading: Nelson, R: "Why should managers be thinking about technology policy?"
Case: Hattori-Seiko and the World Watch Industry in 1980
Readings: Abernathy and Utterback: "Patterns of industrial innovation" Gould: "The panda's thumb of technology"
Reading: Winter: "Knowledge and competence as strategic assets" (pp. 170183 only)
Case:World VCR
Reading:Burgunder: "An overview of intellectual property
protection"
Due: Group membership list
Reading: Pavitt: "What we know about the strategic management of technology."
Cases: Cray Research, Inc. (read primarily as background) Cray Research:
Preparing for the 1990s
Readings:Cooper and Smith: "How established firms respond to threatening
technologies."
Anderson and Tushman: "Managing through cycles of technological
change."
Due: Responding to major technological shifts (case in readings packet).
Reading: Perlmutter and Heenan: "Cooperate to compete globally."
Case:Xerox and Fuji Xerox
Reading: Gibson and Rogers: "The politics of R&D consortia: MCC and SEMATECH."
Case:Cooperation for Competition: U.S. and Japan (MCC).
Case: EMI and CT Scanner (A) and (B)
Due: Innovation Project Progress Report
Readings: Perrow: "Introduction" and "Normal accident at Three Mile Island."
Film:Chernobyl
Readings:Kanter: "When a thousand flower bloom: Structural, collective,
and social conditions for innovation in organization." Van de Ven:
"Central problems in the management of innovation."
Exercise:New Product Launch
Reading:To be handed out
Reading: Katz and Allen: "Investigating the Not Invented Here (NIH) syndrome: A look at the performance, tenure and communication patterns of 50 R&D project groups."
Case:Technology Transfer at a Defense Contractor
Reading:Roberts and Fusfeld: "Staffing the innovative technology-based organization."
Cases:Kidder: "Building a team."
Kunda: Engineering Culture, Ch. 3 "Ideology: Tech
culture
codified."
Reading: Taylor: "Message and muscle: An interview with Swatch titan Nicholas Hayek"
Case:The Swatch (To be handed out)
Due: Innovation Project (by 5:00 p.m.)
| Innovation Project: | 50% | |
| Responses to Technological Threats Project: | 10% | |
| Presentation of Innovation or Responses Project: | 10% | |
| Class participation: | 30% |
In a case-based course, preparation and participation are critical. Consequently, 30% of your grade will depend on these elements. Given the significance of class participation in your grade, I have outlined below the important dimensions of class participation. Your class participation grade will depend on how well your discussion incorporates these elements.
(1) Are comments relevant to the discussion?
(2) Do comments add to the level of knowledge in the class?
(3) Do comments show a willingness to take risks and test new ideas?
(4) Do comments show that you have listened to the discussion? For example,
do you interact with other class members and build on their comments?
(5) Are you prepared to answer when called on in class? (Let me know before
class if some emergency has prevented you from adequately preparing, or
if you have to miss a session.)
There are two projects in this course that will be prepared outside of class. The first is the "Responding to Major Technological Threats" case, which is included in the readings packet. The second is the Innovation project, described below. I would like you to prepare these projects as a group. You may select your own group -- the only requirement is that it must be a minimum of two members and maximum of five members. Groups will present either the Responses to Technological Threats or the Innovation Project in class. Please provide me with a listing of your group members by Friday, April 12.
Session 1: Hattori_Seiko and the World Watch Industry
1. What is the pattern of national "success" for Switzerland, Japan, the USA, and Hong Kong in the watch industry over time? What are the trends?
2. What are the major technological developments in watchmaking over the period covered in the case?
3. Why did Timex succeed the Swiss as world volume leader in the 1950s and 1960s? How did they circumvent the Swiss sources of competitive advantage?
4. Why didn't the Swiss respond effectively?
Session 3: World VCR
1. How does this case embody technological evolution? Is there an early/late period with characteristic features?
2. What was the role of competencies in VCR firm survival and growth?
3. What firm choices about protecting or diffusing competencies had the greatest impact on the success or failure of key firms? What would you have done differently?
Session 5: Cray Research
1. What is your evaluation of the strategic directions undertaken by Cray during the early 1980s? For example, should they have stuck to supercomputers, and not entered the industrial markets with their attendant software needs? Why or why not?
2. What were the major challenges that Cray Research encountered between 1985 and 1989? What are the major challenges they will face in the 1990s?
3. Evaluate John Rollwagen's performance as CEO during the 1985_1989 period.
Session 9: Xerox and Fuji Xerox
1. Is Fuji Xerox a successful joint venture? Why or why not?
2. What were the key success factors in this alliance in the past? Do you expect these factors to change in the future?
3. Consider the different options for reorganization listed in Exhibit 11. Select one option in each functional area and be prepared to explain why you prefer it over the others
Session 10: Cooperation for Competition: U.S. and Japan
1. What do you see as the strengths and weaknesses of MCC, when compared with the VLSI project?
2. What do you see as the strengths and weaknesses of SEMATECH approach, when compared MCC?
3. What are the lessons in these cases about the design of R&D consortia? How can you design consortia to maximize technology transfer? What management processes and project organization approaches work best?
Session 11: EMI and CT Scanner (A) and (B)
1. After reading the (A) case, stop and decide:
a) What predictions can you make about industry and competitive developments
as of 1972? In your answer, consider the historical and likely future evolution
of the CT scanner industry.
b) Should EMI enter this business? Why or why not?
2. After reading the (B) case, answer the following:
a) How well is the company doing as of 1976?
b) What should Dr. Powell do now?
Session 16: Technology Transfer at a Defense Contractor
1. Analyze the events that contributed to the current state of the motherboard transition. What could have been done to make the transition easier?
2. What do you think Yoshino will do in response to Scalia's latest complaint about cooperation with Charleston? What do you think should be done?
3. What should Yoshino do in the future to ease transitions?
Session 18: The Swatch
1. What technological developments have occurred in the watch industry since we last saw it in "Hattori_Seiko and the World Watch Industry in 1980?"
2. How have the patterns of national "success" for Switzerland, Japan, the USA, and Hong Kong changed since 1980? What strategic, marketing, and managerial factors contributed to these changes?
3. What do you think of the leadership efforts of Thomke and Hayek in revitalizing the Swiss watch industry?
Graduate School of BusinessProfessor Pamela Haunschild
STANFORD UNIVERSITY Spring 1995
R385: Innovation and Technology Management
RESPONDING TO MAJOR TECHNOLOGICAL THREATS
Pick an industry or group of companies that is currently experiencing a major technological threat from a competing industry or group of companies. For example, video rental stores are experiencing a threat from Cable TV with the advent of pay_per_view. Typewriter manufacturers have been threatened for some time by personal computers. One outcome of this is that Smith Corona recently filed for bankruptcy.
Assume you are CEO of a firm in the threatened industry, and answer the following questions:
1. What is the threat, and how soon is it coming?
2. What strategic responses are possible? Outline as many realistic responses as possible.
3. Which of the possible strategic responses is best? You might consider a combination of both long_ and short_term responses.
If you decide that participating in the new technology is a good response, how should this occur? Be specific, including timing and method of entry.
The purpose of this group is to provide a forum outside class for the discussion of issues related to course content, current news about technology, questions about case projects, etc. How do you get to it? You click here: su.class.gsb.r385.
You can post to the newsgroup in a couple of ways. One is to click on the above underlined address, which will prompt Netscape to post to the group. Alternatively, you can use your email program (Microsoft Mail, Eudora, etc.) to send mail to su.class.gsb.r385@news.stanford.edu.
If you are using a program that doesn't have your email address in it (like a Netscape program in the MBA computer lab), then please make sure that you identify yourself in the text of the message.