Professor Marcie Tyre
Massachusetts Institute of Technology
The aim of this course is to provide a solid grounding to students interested in managing various aspects of the innovation process within organizations. The course is divided into two parts. The first half of the semester focuses mainly on analytic and strategic frameworks for managing the innovation process. This segment examines patterns of technological change and their impacts, planning for technological transitions, means for capturing economic benefits from innovation, and planning of innovation projects over time. The second half of the course examines the organizational issues involved in innovating and in implementing technological innovations. These issues include management of teams and partnerships, learning within and across projects, the manager's role in funding, directing, and killing innovation projects, technological entrepreneurship, and resistance to innovation. Case studies are used extensively in the second part of the semester.
The following are required as part of this course:
* Each students is expected to contribute actively to class discussions. This requires careful
preparation of readings and case studies, as well as close listening and a willingness to share ideas
during class discussions.
* A ten to fifteen-page paper will be due on December 3. The paper should discuss a specific
innovation or aspect of the innovation process, of your choosing. Guidelines for the paper will be
provided in class. A one page paper proposal is due on October 8.
* An in-class midterm exam will be given on October 22.
* Over the course of the term, each student must submit four short (one-page) "mini papers" on
topics of his/her choice, related to the readings or discussion for a given class. Also, each student
will be asked to provide an index card with a photo and biographical information (educational
background and professional background) by Tuesday, September 10.
Grades will be determined on the basis of class participation (30% weight), final paper (25%), mini papers (25%), and midterm exam (20%).
I. INTRODUCTION AND OVERVIEW
Sept. 5, Thursday: Invention, Innovation, and Competitive Success
Reading:
Rosenbloom and Cusumano, "Technological Pioneering and Competitive Advantage: The Birth of
the VCR Industry," California Management Review, 1987.
Sept. 10, Tues.: Topics in the Management of Innovation
Case: Sun Microsystems (A), HBS case 9-686-133.
There are many aspects to managing a successful technological innovation. The Sun case involves
many of these issues. Study the case, noting the factors that appear to be important for success of
the innovation in this situation. Decide what you would do if faced with this situation.
II. PATTERNS OF PRODUCT AND PROCESS CHANGE, OR, WHY IT'S SO HARD TO INNOVATE
Sept. 12, Thurs.: The Impacts of Innovation
Reading:
Abernathy and Clark, "Innovation: Mapping the Winds of Creative Destruction," Research Policy,
1985.
Inventions and innovations can be categorized along several dimensions. The article by Abernathy
and Clark provides a framework for organizing the impacts of a given innovation. We will
investigate the meaning and usefulness of this framework, and its managerial implications.
Sept. 17, Tues.: Historical Patterns of Product and Process Innovation
Reading:
Abernathy and Utterback, "Patterns of Industrial Innovation," Innovation/Technology Review,
1978.
Henderson and Clark, "Architectural Innovation: The Reconfiguration of Existing Product
Technologies and the Failure of Established Firms," Administrative Science Quarterly, 1990. esp.
pages 9-19.
Industries and companies often display patterns in their innovative behavior. The readings
investigate how the character of innovation changes as a successful enterprise matures. Consider
whether you think that this pattern is (1) necessary and (2) desirable.
Sept. 19, Thurs.: Understanding Radical Shifts and Technological Transitions
Readings: Foster, "Timing Technological Transitions," in Horwitch, Mel (Ed.), Technology in the
Modern Corporation, a Strategic Perspective, 1986. Christensen, "The Limits of the Technology S
Curve," Parts I and II.
In Production and Operations Management, 1992. Part I: Read esp. page 334-346. Part II: skim.
What forces explain the timing of major technological transitions? Can managers predict and plan
for such transitions? Should they try?
III. MANAGING TECHNOLOGICAL TRANSITIONS
Sept. 24, Tues. Succeeding with New Technologies
Readings:
Bower and Christensen, "Disruptive Technologies: Catching the Wave," Harvard Business Review,
1995.
Roberts and Berry, "Entering New Businesses: Selecting Strategies for Success," Sloan
Management Review, 1985.
Cohen and Levinthal, "Absorptive Capacity: A New Perspective on Learning and Innovation,"
Administrative Science Quarterly, 1990. Esp. pages 128-129 (until: "Cognitive structures...") and
from page 131 (starting with "Individual...") through page 138, and Conclusion (pages 149-150).
These readings outline the major barriers that managers face in meeting the challenge of major
technological shifts. Are the barriers surmountable, and if so, how?
Sept. 26, Thurs. Capturing the Benefit from Innovation: The Role of Complementary Assets
Reading:
Teece, "Profiting from Technological Innovation: Implications for Integration, Collaboration,
Licensing and Public Policy," in Teece, D. (ed.), The Competitive Challenge, 1987.
One may (or may not) be able to capture the economic benefits from an innovation, even if the
basic invention is readily copied. We will discuss the importance of complementary assets, and of
other hard-to-copy capabilities that successful innovators can develop to protect their positions.
IV. PROFITING FROM TECHNOLOGICAL TRANSITIONS
Oct. 1, Tues. Intellectual Property
Guest speaker: Stephen Bauer.
Reading: to be distributed separately
Intellectual property laws are intended to enable inventors to protect the knowledge embodied in
their products. How well do they do the job? What other avenues are available for protecting one's
ideas? Which would you select to protect a new invention?
Oct. 3, Thurs.: Standards and Network Effects
Readings:
McGahan and Yoffie, "Creating Value & Setting Standards: The Lessons of Consumer Electronics
for Personal Digital Assistants," HBS Working Paper.
David, "Clio and the Economics of QWERTY," AEA, 1985.
Oct. 8, Tues.: "Market Research" for New Technologies
Readings:
Leonard-Barton, "Learning from the Market," chapter 7 of Wellsprings of Knowledge. 1995
von Hippel, "Users as Innovators," chapter 2 of The Sources of Innovation, esp. pages 11-19.
Rosenberg, "Neglected Uncertainties in the Economics of Technological Change"
How can innovators take user needs and preferences into account, given that traditional "market
research" approaches often do not apply to technological innovation? In what situations are
different techniques most applicable?
V. WRAP-UP OF FIRST HALF OF THE COURSE
Oct. 10, Thurs.: Putting Concepts to Work: The Case of the HardCard
Case:
Plus Development (A), HBS case 9-687-001.
This case presents a highly complex, real-world example of an innovating firm facing many of the
problems and decisions common to innovators. Use the concepts learned in class to analyze Plus'
situation and to recommend next steps. At the beginning of class, one student will be asked to
make a presentation (approximately 10 minutes) of her or his analysis and ideas.
Oct. 15, Tues: Columbus Day, no class.
Oct. 17, Thurs.: The Case of the HardCard, continued.
Case:
Plus Development (B), HBS case 9-688-066 (to be distributed in class).
Oct. 22, Tues.: In-Class Midterm Exam
VI. CREATING ORGANIZATIONAL CAPABILITIES FOR INNOVATION
Oct. 24, Thurs.: Improving Team Processes for Innovation
Case:
Quantum Corporation- Business and Product Teams, HBS case 9-692-023.
Oct. 29, Tues.: Innovation Across Firm Boundaries
Case:
Molding the Impossible: The NYPRO/Vistakon Disposable Contact Lens Project, HBS case
694-062.
VII. MANAGING INNOVATION OVER MULTIPLE PROJECTS
Oct. 31, Thurs.: Building (on) Technology Platforms
Readings:
Wheelwright and Clark, "Creating Project Plans to Focus Product Development," Harvard
Business Review, 1992.
Nov. 5, Thurs.: The Firm's Evolution Over Time
Reading:
Burgelman, "Fading Memories: A Process Theory of Strategic Business Exit in Dynamic
Environments," Administrative Science Quarterly, 1994.
VIII. FUNDING, CONTROLLING, AND KILLING PROJECTS
Nov. 7, Thurs.:
Case:
Corning Glass Works: Tom MacAvoy, HBS case 179-074.
Earlier in the term we studied a method for rational project planning (see October 20). However,
decisions about funding projects and killing projects are not so easy when organizational factors,
emotional issues, and long-term repercussions need to be taken into account. What approach for
making these decisions do you support in the Corning case? What problems is Corning
management now making? What changes should be made in the way that funding decisions are
made?
Nov. 12, Tues.:
Case:
Materials Technology Corporation, HBS case 9-694-075.
Nov. 14, Thurs.:
Guest speakers: Stanley Lapidus, entrepreneur and Edwin Kania, venture capitalist.
Nov. 19, Tues.: Summary Lecture on Selecting Funding Projects.
Reading:
Nichols: "Scientific Management at Merck: An Interview with CFO Judy Lewent," Harvard
Business Review, January-February 1994.
IX. IMPLEMENTATION, USE, AND ADAPTATION OF NEW TECHNOLOGIES
Nov. 21, Thurs.: Resistance to Innovation
Case:
Solagen: Process Improvement in the Manufacture of Gelatin, HBS case 9-687-020.
Readings:
Bohn, "Measuring and Managing Technological Knowledge", Sloan Management Review, 1994.
The readings provide some insight into the problems of gaining acceptance of a new technology by
potential users. Use these insights to analyze the problems that Kodak in facing in introducing
Solagen. What should be done next?
Nov. 26, Tues.: Implementation and the Role of Problem Solving
Cases:
Owens-Illinois: 10 Quad, HBS case 9-688-108. (pages to be assigned)
Owens-Illinois: Atlanta 10 Quad, HBS case 9-688-109. (pages to be assigned)
Owens-Illinois: Streator 10 Quad, HBS case 9-688-110. (pages to be assigned)
Reading:
David Garvin, "Building a Learning Organization," Harvard Business Review, July-August 1993.
Different organizations often achieve radically different results from introducing a given innovation.
In this case series, try to figure out why one plant is able to push the new technology further than a
sister plant can do. What lessons does this teach to managers and R&D personnel? To users of
new technologies?
Nov. 28 - no class - Thanksgiving
Dec. 3, Tues.: Creating Opportunities for Ongoing Improvement
Reading:
Tyre and Orlikowski, "Exploiting Opportunities for Technological Improvement," Sloan
Management Review, 1993.
Research shows that the economic benefits of a new technology often depends more on small
improvements over time than on the initial innovation. But we do not pay much attention to the
management of such small improvements. This paper focuses on this issue. Do you agree with its
conclusions? What are the implications or other aspects of technology management?
** Note: Papers Due!!!
IX. COURSE WRAP-UP
Dec. 5, Thurs. Summary and Conclusions Review your notes and your thoughts. What are the most important lessons about managing innovation that you will carry to your next assignment?
Dec. 10, Tues. Wrap-up Case: To be distributed.