Managing Innovation

MBAA 609MBAA 609R. NakatsuR. Nakatsu

Is Innovation a Black Box?

Reasons why successful innovation is so hard to create:

Poor management New and emerging technologies are so

unpredictable

Key question: Can we pry open the black box to better understand the process by which new growth businesses are created?

Three Factors that Shape Organizational Capabilities

Resources Processes Values

Sustaining vs. Disruptive Innovation

What is the difference between sustaining and disruptive innovation?

What are examples of each? How can we determine whether an

innovation is sustaining or disruptive ? (Is there a “litmus test”?)

Case Study: Digital Equipment Corp.

Digital provides us with a cautionary tale of what could go wrong.

What was its business model? What competitive threat did it face? Why did it fail?

Managing Disruptive Innovation:Good Practices

Question for DiscussionWhat would you do to manage a disruptive

innovation?

Assessing Disruption

Not all disruptive innovations are threatening; some are offset by significant disadvantages.

Some disruptive innovations will not hit immediately.

You need to assess both the advantages and disadvantages of the disruption.

Some Examples:Online Education and Online Grocers

Main Takeaways

Understand that innovation is a process that can be managed and understood: it is not entirely a black box.

Know the difference between sustaining and disruptive innovations.

Understand why Digital Equipment Corporation failed. Recognize the role that organizational processes and

values can play in thwarting disruptive innovations. Identify the actions that companies can take to better

manage disruptive innovations. Understand that disruptive innovations are not

necessarily threatening to a company’s business.