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7/30/2019 Marketing HighTech
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Chapter 3:
Culture and Climate Considerationsfor High-Tech Companies
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2010 Pearson Education, Inc. publishing as Prentice Hall
What characterizes an innovative
culture in high-tech companies?
How is creativity related toinnovativeness?
What are the facilitators of a cultureof innovativeness?
What are possible barriers to aninnovative culture?
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2010 Pearson Education, Inc. publishing as Prentice Hall
High-Tech companies can becomecomplacent Need to cultivate a climate/culture of
innovativeness
Culture Set of organizational values and beliefs
that guide behavior Hard to change
Climate Set of expected behaviors Observable manifestation of culture
Culture and Climate in High-Tech Firms
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2010 Pearson Education, Inc. publishing as Prentice Hall
Success= Culture of Innovativeness Break-through thinking
Risk taking
Assess by percent of revenue derivedfrom recently-released products andbreakthrough innovations
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Obstacles to Innovativeness (see later slides) Core rigidities
Innovators dilemma
Organizational size?
Cyclic nature of business
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2010 Pearson Education, Inc. publishing as Prentice Hall
Develop/Maintain Innovativeness Steady stream of innovations
Entrepreneurial spirit
Nonlinear process In contrast to stage-gate, step-by-step process
Forward-looking
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Chapter 3: Culture of Innovativeness Chapter 4: Market-oriented culture;culture of collaborative cross-functional interactions
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Creativity as a source of competitiveadvantage Must be disciplined creativity guided
and channeled with strategic planning Ideas must be novel AND useful
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Top managers have a strong influence ininnovation Set example for values and beliefs
Successful NPD efforts have CEO that isintimately involved with every aspect ofthe process
Completely back the project
Exhibit a future focus Exhibit an external (market/customer)
focus
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Process of developing/commercializingbreakthrough product, service, or modelthat obsolete or cannibalize existing
products Current technology made obsolete
by proactively developing next-generation technology
May be the antidote to the InnovatorsDilemmaif it overcomes internal rigidity
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Use fear of obsolescence as motivationto engage in creative destruction
Drivers: SBUs compete internally for resources
Product champions carry strong role Focus on future markets more than current
markets
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People who assume significant risks tosee their innovative ideas succeed Tireless crusaders
Product champions are characterized by: Rule-breaking and risk-taking
Political astuteness Technical competency
Aggressiveness
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Product champions in more innovative firmswield more influence than those in lessinnovative firms They have power to make ideas happen
Reward system and top management support them
Product champions in less innovativefirmswield less influence Are frustrated and demoralized
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Isolate new venture groups outside thenormal organizational hierarchy
Pros:
-More creativity, unfettered by existingcorporate protocols
Cons:
-Signals impediments to innovation
-Isolates the creative process
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Actively facilitating the development of newknowledge and insights that influence thecompanys strategy
Facilitated by: Top management support
Decentralized/market-based approach to planning
Market orientation firms ability to actively
monitor customer/ competitor trends A competency-based source of competitive
advantage
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Learning may be the only source of sustainablecompetitive advantage
Ray Stata, CEOAnalog Devices
In an economy where the only certainty is uncertainty,the one sure source of lasting competitive advantage isknowledge Ikujiro Nonaka,
The Knowledge Creating Company
A unique characteristic of knowledge is that it is one ofthe few assets that grows most usually exponentially -when shared James Brian Quinn,
Intelligent Enterprise
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Abandon conventional wisdom
Unlearn traditional butdetrimental practices
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Create a vision of the future based on marketsthat do not yet exist and unconfined by existingindustry boundaries
Challenge the status quo Overturn price/performance assumptions
Escape the tyranny of the served market
Use new sources of ideas for innovation
Get out in front of customers Engage in creativity exercises
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Frequent fast-paced market incursions (see nextslide)
Based on times at bat rather than one home run
Requires: Accurate learning of customer needs Recalibration of market offerings
Light and fast
Shorten time between market learning and product launch
Implication: Accumulatemarket experience, andquickly adapt market offerings
Enlightened experimentation
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Model 1
Model 2
Model 3
Time
Development
Overall Revenue
Incr. Revenue
New Models
Relationship between Entr ies in the Market and Quality
Model 1
Model 2
Model 3
Time
Development
Overall Revenue
Incr. Revenue
New Models
Relationship between Entr ies in the Market and Quality
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Tolerate mistakes
Learn from mistakes
Mistake may prove to be next success
Reward risk taking
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Appropriate reward system
Long term perspective
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Emphasize the importance of diversity
Maintain close relationships with themost innovative customers
Frequently evaluate project progress
Build innovation into performance reviewprocess
*see table 3-1 for a complete listing
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Provide considerable freedom of action
Educate employees about emergingtechnologies
Use teams of employees
Rapidly communicate new ideas acrossthe company.
*see table 3-1 for a complete listing
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Well-established routines that preventa firm from taking a fresh perspective Bound by existing rules of the game Ingrained routines, knowledge, and skills
become strait-jackets
Inhibit a firms ability to develop unfamiliarskills, routines, and new knowledge
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In high-tech firms, core rigidities might bebased on cultural norms that include: Status hierarchies that give preference to technical
personnel over marketing personnel
Preferences for existing technologies and products Focus on technologies/products rather than
customers/markets
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Core rigidities can be overcome by: Unlearning
Learning orientation
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Difficulty in innovating and responding todisruptive innovations Due to need to divert resources from pursuing
incremental innovations that addressed known
customer needs in established markets To new markets and customers that may seem
insignificant Arises from sunk costs in old technology;
bias in managerial decision making, and
reliance on existing customers
To succeed: Engage in creative destruction
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Life is pretty simple: you do some stuff. Most fails. Some works. You domore of what works. If it works big, others quickly copy it. Then you do
something else. The trick is in the doing something else. You must take pot
shots at todays starbeforeyou are mimicked. Todays radiantly blooming
flowers are tomorrows mulch. Dont forget that for a moment. But dont
think about it too long either.
Tom Peters
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2010 Pearson Education, Inc. publishing as Prentice Hall
Opening Vignette: Google Technology Expert: ESRI (GIS software)
Technology Tidbit: Star Sight
End-of-Book Case: ESRI
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All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.