Intrapreneurial Transformation – Making digitalization work

Prof. Dr.-Ing. Guido Baltes

Corporate Startup Summit, Zurich, 28/04/2016

Intrapreneurial Transformation - Making digitalization work

Page 1 © Prof. Dr.-Ing. Guido Baltes

Prof. Dr.Ing. Guido Baltes - Professor for Strategy & Management, Director Institute for Strategic innovation & Technology management

Current Professor for Strategy & Management

Lake Constance University (Hochschule Konstanz) Director Institute for Strategic innovation & Technology management

(IST), head of eArchitecture Innovation Lab & CoPS industry research group*

Research focus: Strategic Innovation based on Dynamic Capabilities & Corporate Entrepreneurship, supporting companies in strategic transition and strategic re-newal to implement innovation-driven growth strategies

Industry background Management board member as Head of Strategy & Marketing, Siemens Business Services Germany Project management for strategic transition & turn-around projects (Corporate Strategy, Siemens AG) Project manager Strategic Management Consulting, project management aerospace PhD in Aeronautical Engineering & Master in Business Administration

* CoPS : Community of Practice for Strategic Management Architectures – CeTIM : Centre for Technology & Innovation Management

inno-ist.org


IST focusses on technology-oriented companies and their challenge in dynamic markets: Implementing Strategic responsiveness

Firm 1: not successful Firm 2: missing chances Firm 3: Sustained success with strategic responsiveness

Market parameters

time Market

Source: IST / CoPS, Walter Isaacson “Steve Jobs”

© Prof. Dr.-Ing. Guido Baltes

... creating an

“entrepreneurial

and

agile

organization” …

(Steve Jobs)


Digitalization drives companies out of business because the world around starts changing faster than the clock-speed of their business

Digital Darwinism … … describes an era where technology and society are evolving faster than businesses can naturally adapt.

Source: wired.com, IBM CxO Study 2015


Challenge of market entry in Digital Transformation: You have to be there when the market is not yet there – when it is there, it is too late!

Digital markets Market shares, index, market leader = 100%

Platform as-a Service

Infrastructure. as-a Service

Traditional markets Market shares, index, market leader = 100%

Automotive OEM

Electrical equipment

Internet media

Auto parts

Software

Telecom carriers

Digital markets

= winner-

takes-it-all- markets

0%

100%

Microsoft IBM Oracle SAP Symatec EMC HP VMware CA Inc AdobeSystems

0%

100%

Google TencentHoldings

Facebook Baidu Yahoo SoftBank Groupon AOL KingDigtialEnter-

tainment

0%

100%

Amazon Microsoft IBM Google Oracle Rack-space

0%

100%

Sales-force

Amazon Microsoft IBM ServiceNow

Netsuite Oracle Google

0%

100%

AT&T Verizon NTT ChinaMobile

DeutscheTelekom

Tele-fonica

SoftBank Voda-fone

Orange ChinaTelcom

0%

100%

Toyota VW GM Ford Honda Fiat Nissan Daimler BMW SAIC

0%

100%

Siemens Hitachi GE Schneider UnitedTech.

ABB Mitsubishi Emerson Thoshiba Alstom

0%

100%

Denso Conti-nental

Magna Hyun-dai

Bridge-stone

Aisin JohnsonControls

CieGenerale

desEtablis-sement

Faurecia Toyota

Source: market data as of 2014 @ Bloomberg Visual Data, for PaaS/IaaS Visual Data, Ralph Finos @ wikibon


Consequence: “Software eats the world” and sets out a new paradigm:


... “DISRUPTION is the

new NORMAL” …

(Wall Street Journal)

Source: Wall Street Journal, Jan 2014

Effects … Volatility Variability Timliness Chaos Randomness Uncertainty


To address digital transformation, firms need to master core business efficiently and at the same time drive digital innovation: Ambidexterity

Source: IST / CoPS – Gard, Baltes, Katzy “Managing autonomy of teams in Corporate Entrepreneurship”, IAMOT 2013, Porto Alegre, Brazzil

Exploitation • Advantages from stability,

standardization, repetition • Focus on planning, quality,

processes, specialization • Incentives for risk averseness,

cost reduction, documentation • Mass-produced physical-goods

scaling by smarter automation & logistics

EFFICIENCY INNOVATION

Exploration • Advantages from agility

based on flexibility & passion • Focus on investment in strategic

options, with risk & failure tolerance

• Incentives for experimental learning: „try early & fail cheap“

• Scaling based on intangible assets & technology capabilities

The “both-handed” ambidextrous organization

Efficient Hierarchy Entrepreneurial Teams


Embedded Entrepreneurial team

In start-ups, team configuration seems crucial – in contrast, for embedded teams the entrepreneurial team manager is key to success

Source: Brown/Eisenhardt “Product Development: Past Research, Present Findings, and Future Directions”, IST / CoPS

Quality team of over-average people, hungry & personally committed lead by an entrepreneurial team manager Complementing skills & cross-functional

competences, moderate tenure Uneven number of team members,

clear roles, focus on core business only

High level of concurrency Structuring complex problems into solving tasks Foster frequent iteration and design-based testing

Working mode

Inspire and instill trust

Provide guidance and get-out of the way (subtle control & monitoring)

Skip the word talent, focus on performance

Stretch people to get out-of-their comfort zone

Business management


The corporate entrepreneur differs significantly from entrepreneurs and corporate managers – but lends from both

Risk-averse, seeking stability Team orientation Leadership role Need for power Stakeholder management &

communication focus Analytical decision making, Efficiency & execution driven …

Risk-taking, tolerance for ambiguity Extrinsic motivation, egoistic Innovative, creative, visionary Need for achievement Full autonomy Intuitive decision making Effective & outcome driven …

Entrepreneur Manager

Source: Brandstätter, Hermann (2011): Personality aspects of entrepreneurship. A look at five meta-analyses // Zhao, Hao; Seibert, Scott E. and Lumbkin, G. T.; (2010): The Relationship of Personality to Entrepreneurial Intentions // Ciavarella, M. A.; et al. (2004): The Big Five and venture survival // Rauch, A., & Frese, M. (2007). Let's put the person back into entrepreneurship research: A meta-analysis on the relationship between business owners' personality traits, business creation, and success // Busenitz, L. W., & Barney, J. B. (1997). Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. // Dyer, J. H., Gregersen, H. B., and Christensen, C. (2008). Entrepreneur behaviors, opportunity recognition, and the origins of innovative ventures // Fagiano, D. (1997). Managers vs. leaders: A corporate fable.

Analytical risk-taking, reproducible problem solving

Intrinsic motivation (achievement) Entrepreneurial leader Need for autonomy Stakeholder management Transparent decision making Innovative initiator …


With that, entrepreneurial teams aim at integral innovation emerging from iterations between technology, product and business model

Source: IST / CoPS; Chesbrough “The role of the business model in capturing value from innovation”

Uncertainty:

Technology

Market

Environment

Time EXPLORATION Ideation (prefield-) Research Feasibility

INKUBATION Research Development Prototype

DEVELOPMENT Design Product Business model

COMMERCIALISATION Go to market Roll-Out Scaling

$ Pivoting

Business model

Customer

Markets



Wanting to climb the highest mountain in the world may not be regarded as particularly original idea Being the first one to IMPLEMENT this idea certainly is!

Top management role: Skip talent, idea, … focus and push the entrepreneurial team on performance & speed in implementation

“The brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.” Randy Pausch

Professor for information technology Carnegie Mellon University

The Last Lecture

Picture-Source: tenzing-norgay-trekking.de


Prof. Dr.-Ing. Guido Baltes Institute for Strategic innovation & Technology management Hochschule Konstanz Brauneggerstraße 55 78405 Konstanz, [email protected] Tel +49 7531 206 310

Contact details


innovationsinstitut.org

Leadership & Management

Intrapreneurial Transformation – Making digitalization work