innovation and technology management (cnp532) dr keith hampson school of construction management and...

Innovation and Innovation and Technology Technology

ManagementManagement

(CNP532)(CNP532)

Dr Keith Hampson

School of Construction Management and Property

© Hampson, 2000 2 School of Construction School of Construction Management and PropertyManagement and Property

PROJECT MANAGEMENT PROGRAMPROJECT MANAGEMENT PROGRAMInnovation and Technology ManagementInnovation and Technology Management

INTRODUCTION INTRODUCTION

Introductions Personal Group

Background and interests of audience Participant goals



OBJECTIVESOBJECTIVES

To provide overview of key concepts and importance of STM to competitive performance of firms today.

To provide background to the relevant literature. To provide a set of concepts and tools for use in

formulating and implementing technology strategy. To work together to use the strategic technology

frameworks to analyse a case study example. To challenge traditional approaches.



EXPECTED OUTCOMESEXPECTED OUTCOMES

Understand the important effect that technology has on business today.

Discuss current perspectives and better understand the role that management of technology has in building and maintaining a competitive edge in business.

Be able to apply key concepts and tools to enhance the competitive performance of your own organisation.



MY ROLE … MY ROLE …

More the guide on the side, More the guide on the side, rather than the sage on the stagerather than the sage on the stage

TECHNOLOGY TECHNOLOGY AND AND COMPETITIVE COMPETITIVE ADVANTAGEADVANTAGE



TECHNOLOGY AND COMPETITIVE ADVANTAGETECHNOLOGY AND COMPETITIVE ADVANTAGE

INTRODUCTIONINTRODUCTION

Why Study Strategic Technology Management? International Perspectives Basic Concepts and Definitions Technological Change and Economic Growth



WHY STUDY STRATEGIC WHY STUDY STRATEGIC TECHNOLOGY MANAGEMENT?TECHNOLOGY MANAGEMENT?

More effective use of engineering and science skills is essential if Australia is to develop the industrial structure necessary for economic growth. This requires technological and multi-skilling of our engineers and scientists, a balance of skills—technical and managerial—with a finely developed social awareness of the impact of their decisions on industry, community and environment.

(Kim Beazley, 1992- former Minister for Employment, Education and Training)



The industrialist who rejects the aid of science is about to be weighed in the balance.He will then be found wanting, and his business will soon pass to other hands. The wise investor will avoid him and his companies.

(Arthur Dehon Little, The Handwriting on the Wall, 1991)



WHY STUDY STRATEGIC WHY STUDY STRATEGIC TECHNOLOGY MANAGEMENT?TECHNOLOGY MANAGEMENT?

A society that blindly accepts the decisions of experts is a sick society on its way to death. The time has come when we must produce, alongside specialists, another class of scholars and citizens who have broad familiarity with the facts, methods and objectives of science and thus are capable of making judgements about scientific policies. Persons who work at the interface of science and society have become essential simply because almost everything that happens in society is influenced by science. (Dubox, 1970, p227)



APESAAPESA (1992)(1992)

Australia’s engineers are well prepared in engineering technology, but not as well prepared for the full practice of engineering and business dimensions. ... Specialists—like managing engineers and scientists—must also have broader and non-technical skills, and the capability to perceive the wider opportunities provided by technology so that possibilities can be turned into commercial products.



INTERNATIONAL PERSPECTIVESINTERNATIONAL PERSPECTIVESEurope Europe ((Collins et al, 1991)

Perceptions of how management would handle problems in adoption of new technologies.

Training needs for technology - management interface.– More effective management of exploitation of

technology and how to introduce new products and processes.

– Conclusion: technologists, although enthusiastic and dedicated, exhibited naiveté in their approach to work which led to the creation of a new technology rather than the creation of a business opportunity.



THEY PROPOSED A ...THEY PROPOSED A ...

2-phase remedy for shortfall:1. Postgraduate experience and training

designed to produce operational competence at junior to middle management levels in the organisation.

2. Encourage middle level managers to think like top management through Technology Management courses. Emphasis to be on strategic rather than on operating issues.



INTERNATIONAL PERSPECTIVESINTERNATIONAL PERSPECTIVESNew Zealand New Zealand (Kirk, 1994)

Qualifications of senior management. – 6% of board members of top 200 companies were technically trained.

Individual senior management needs and attitudes. – Needs not covered by general management programs

Need for such topics as:– assessing and evaluating technological options– managing technical people and teams– strategic role of technology– technology project management– technology transfer and legal issues– managing change and innovation.



INTERNATIONAL PERSPECTIVESINTERNATIONAL PERSPECTIVESUnited StatesUnited States (Construction Industry Institute, 1992)

Reviewed building construction projects: To remain competitive, creative and innovative ideas to

improve productivity must be explored. Innovation is a key for obtaining a competitive advantage

in any industry. For innovation to take place, an environment that

stimulates or encourages new ideas must be created by management.

Science, Maths & Engineering Degrees as apercentage of Total University degrees

05

1015202530354045

Ca

na

da

US

A

NZ

Au

str

alia

Ja

pa

n

Ire

lan

d

Ge

rma

ny

Fin

lan

d

Fra

nc

e

ScienceMaths & CompEngineeringTOTAL Science & Engineering

Ref: Education at a Glance - OECDIndicators - LB 2846.E247 - 1992

%

CHART 2

Agriculture’s share of exports

0

10

20

30

40

50

60

70

80

Ja

pa

n

Fin

lan

d

U K

U S

A

Ire

lan

d

Au

str

alia N Z

19751980198519901995 est

%

Ref: OECD Economies at a glance - 1996CHART 4



Technology: Artifacts (products &

processes of production) and the

corresponding knowledge bases (ideas,

concepts & modes of inquiry) that firms use

to generate and maintain a particular level of

performance (Layton, 1974)

DEFINITIONDEFINITION



Effectiveness Vs EfficiencyEffectiveness Vs Efficiency



Strategies are both plans for the future and

patterns from the past (Mintzberg, 1987)

Technology Strategy: A pattern of decisions that

sets the technological goals and means for

achieving those technological goals and the

business goals of the organisation (Adler, 1989)

TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY



2 PRINCIPAL ECONOMICS RESEARCHERS 2 PRINCIPAL ECONOMICS RESEARCHERS STUDIED RATE OF ECONOMIC GROWTHSTUDIED RATE OF ECONOMIC GROWTH

1. R.M. SOLOW - 1957 PaperReviewed US economy 1909 -1949

87.5% of growth in output/worker unaccounted for

2. MOSES ABRAMOVITZ - 1956 PaperReviewed US economy 1869 - 1953

85.0% of growth in output/worker unaccounted for

LARGE COMPONENT OF INCREASE IN PRODUCTIVE OUTPUT CANNOT BE ACCOUNTED FOR BY A CORRESPONDING INCREASE IN TANGIBLE INPUTS

"TECHNICAL CHANGE""TECHNICAL CHANGE"



TECHNICAL CHANGE - TECHNICAL CHANGE - ECONOMIC GROWTH ECONOMIC GROWTH

Researcher Average AnnualRate of Change

Schmookler (1869-78 to 1929-38) - GNP per unit of input

1.4%

Mills (1891-1900 to 1941-50) - GNP per manhour

3.6%

Schultz (1910 to 1950) - Agricultural output per unit of input

0.8 - 1.4%

Kendrick (1899 to 1963) - Private domestic output per unit of input

1.7%

Solow (1909 to 1949) - GNP per unit of labour

1.5%

(Source: Link, 1987)

CONSTRUCTION CONSTRUCTION INDUSTRY INDUSTRY PERSPECTIVESPERSPECTIVES



GROSS EXPENDITURE ON R&D/GDP GROSS EXPENDITURE ON R&D/GDP RATIO IN OECD COUNTRIESRATIO IN OECD COUNTRIES

Sweden 3.1% USA 2.8% Japan 2.8% Switzerland 2.7% … Australia 1.6% (15th)



Major Trends Impacting Construction Major Trends Impacting Construction Products and ProcessesProducts and Processes (Tatum, 1988; CII, 1992; Gann, 1993)

Use of advanced IT in construction process and buildings themselves Mechanisation of construction activities Prefabrication and increased off-site fabrication New advanced materials More demanding owners and regulations Global markets for manufactured goods and engineering and

construction services, foreign competition and ownership New project delivery forms, eg. finance, design, build, own, operate,

transfer Resource constraints, eg. construction professionals, skilled trades,

permanent equipment and materials of construction

?



TECHNICAL ATTRIBUTES OF TECHNICAL ATTRIBUTES OF FUTURE FACILITIES:FUTURE FACILITIES:

Decreased project size & greater emphasis on retrofit

Increased concern for employee and public safety Waste minimisation and environmental protection Increased quality and greater production flexibility Increased scope of mechanical & electrical

systems to conserve energy and improve indoor air quality (Source: CII 2000 Task Force, 1992)



TECHNOLOGICAL TRENDSTECHNOLOGICAL TRENDS

Increased benefits from computer applications– simulation, CAD

Increased automation and application of robotics– design for automation, human/machine issues

Advanced construction materials– composites, hi-strength steels and concretes

(Source: Tatum et al, 1992)



CONSTRUCTION INDUSTRYCONSTRUCTION INDUSTRY

A net importer of technology primarily from mining, materials

handling, motor vehicles and equipment sectors

Construction is critical to the economy employment and contribution to GDP

Advance in construction efficiency affects performance of other industries



CONSTRUCTION INDUSTRYCONSTRUCTION INDUSTRY

Typically approximately 0.4% of sales invested as R&D cf. 5 - 10% in electronics

2 - 3%in manufacturing

Japan > 1% in construction Can this continue?

PERCENTAGE GROWTH IN GDP: 1975-1997 in Constant 1989-90 Dollars

429.4

150143.8142.7131.2123.1121.5113.5113.4

94.577.276.8

69.168.859.858.341.3

0

50

100

150

200

250

300

350

400

450

500

Manuf

actu

ring

Who

lesale

trad

e

CONSTRUCTIO

N

Retail

trad

e

Agric/

fore

stry

/fishin

g

Gover

n ad

min

& def

.

Accom

m,c

afes

& re

st.

All ind

ust.

(GDP(P

))

Cult. &

recr

eat.s

ervic

es

Mining

Elect,

gas

& wat

er

Educa

tion

Health

& C

omm

ser

vices

Fin. &

insu

ranc

e

Trans

port

& sto

rage

Prop.

& b

us. s

ervic

es

Comm

un. s

ervic

es

INDEXES OF GROWTH IN GDP AT CONSTANT PRICES

0

100

200

300

400

500

600

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

Worst PerformingIndustry: Manufacturing

Construction

Best PerformingIndustry:Communicationservices

All industries(GDP(P))



CURRENT CONSTRUCTION PRACTICECURRENT CONSTRUCTION PRACTICE

Traditional construction delivery system Segmented industry Conflicting interests Great opportunities for advancement



Long term effect on GDP on reducing costs by Long term effect on GDP on reducing costs by 10% in a range of Australian service industries10% in a range of Australian service industries

Non-residential Construction

0 0.5 1 1.5 2 2.5 3

OTC

Gas

Repairs

Australia Post

Investment

WaterWater Transport

Insurance

Air TransportServices to Transport

Non-bank Finance

Mechanical RepairsTelecom

Defence

Rail TransportPersonal Services

BankingRoad Transport

Welfare

Electricity

Public Administration

HealthEducation

Residential BuildingBusiness Services

Construction is KEYConstruction is KEYto economic growthto economic growth



THE CONSTRUCTION FIRMTHE CONSTRUCTION FIRM

Definition of a Contractor …

A gambler who never gets to shuffle, cut, or deal.

(cf. Bid Opening: A poker game in which the losing hand wins)

or is this another case of the Victim Complex?



POSSIBLE TECHNOLOGY STRATEGIES POSSIBLE TECHNOLOGY STRATEGIES FOR CONSTRUCTION FIRMS FOR CONSTRUCTION FIRMS (Tatum 1988)

Not proud Efficiency expert Construction R&D heresy Work smarter Forward technical integration Backward technical integration

STRATEGIC STRATEGIC TECHNOLOGY TECHNOLOGY FRAMEWORKSFRAMEWORKS



STRATEGIC TECHNOLOGY FRAMEWORKSSTRATEGIC TECHNOLOGY FRAMEWORKS

To focus our understanding of the concepts surrounding strategic technology management.

To use as a future tool for analysis and action.



EVOLUTIONARY PROCESS FRAMEWORK FOR EVOLUTIONARY PROCESS FRAMEWORK FOR TECHNOLOGY STRATEGYTECHNOLOGY STRATEGY

(Burgelman & Rosenbloom, 1989 and adapted by Hampson, 2000)

TECHNOLOGY STRATEGY

EXPERIENCETECHNICAL

CAPABILITIES

INTERNAL ENVIRONMENT

GE

NE

RA

TIV

E M

EC

HA

NIS

MS

INT

EG

RA

TIV

E M

EC

HA

NIS

MS

EXTERNAL ENVIRONMENT

BUSINESSSTRATEGY

TECHNOLOGY EVOLUTION

ORGANISATIONAL CONTEXT

INDUSTRY CONTEXT

Monitor, review and standardise



TECHNOLOGY STRATEGY FRAMEWORK TECHNOLOGY STRATEGY FRAMEWORK (Hampson, 1993)

TS = TECHNOLOGY STRATEGY

COMPETITIVE POSITIONING

SOURCING OF TECHNOLOGY

SCOPE OF TECHNOLOG

Y STRATEGY

DEPTH OF TECHNOLOG

Y STRATEGY

ORGANISATIONAL FIT

TSTS



DIMENSIONS OF DIMENSIONS OF

STRATEGYSTRATEGY

INDICATORS OF INDICATORS OF COMPETITIVECOMPETITIVE

PERFORMANCEPERFORMANCE

Technology Evolution

Industry Context

COMPETITIVE COMPETITIVE PERFORMANCEPERFORMANCEDependent Variable

TECHNOLOGY TECHNOLOGY STRATEGYSTRATEGY

Independent Vble



EXPLORATORY STUDY EXPLORATORY STUDY

RESEARCH MODEL RESEARCH MODEL (Hampson, 1993)



TS MEASUREMENT FRAMEWORKTS MEASUREMENT FRAMEWORK

Scope of Technology Strategy

Competitive Positioning

Sourcing of Technology

Depth of Technology Strategy

Organizational Fit

• Emphasis of tech in overall business strategy• ...

• Acquisition of explicit technology• ...

• Breadth of technological capabilities• ...

• Emphasis on research and development• Depth of technical capabilities

• Rewards systems - Head office• ...

5 DIMENSIONS 29 MEASURES



CP INDICATORSCP INDICATORS

4 CATEGORIES 14 INDICATORS

Contract Award Growth

Market Share Growth

Contract Value

per Employee

Weighted Average

Performance Index

4 Absolute Value - $M/year 2 Proportional Growth - %

4 Absolute Growth - %/year

3 Productivity Indicators - $/person

1 Subjective Self-Assessed Index

1990 1991 1992 1993 1994 1995

30

40

50

60

70

80

90

100

110

120

130

Music Box CustomersPredicted Growth

Years

Customers (in millions)



TOTAL VALUE OF CONTRACTS AWARDED

Year

$0

$20M

$40M

$60M

$80M

$100M

$120M

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

Tota

l Con

trac

t Val

ue (x

1000

)

Typical annual contract award data for bridge construction firm



RESEARCH FOCUSED ON BRIDGE RESEARCH FOCUSED ON BRIDGE CONSTRUCTION IN CALIFORNIACONSTRUCTION IN CALIFORNIA

Large and rapidly growing market Discrete market with highly focused

firms Data available from Caltrans and firms Open competition Differentiation of technologies

A. Minor Modifications and Repair - “Minor Mods” B. Routine New Alignment - “Blow and Go” C. Special Projects - “Heavy Engineering”



Example Use of Technology Strategy MeasureExample Use of Technology Strategy Measure

Dimension (d) Depth of Technology Strategy

Measure (ii) Depth of technical capabilities - Head office technical management team

1 2 3 4 5Low Medium

High



Level of Technical QualificationLevel of Technical Qualification RatingRating

Doctorate 6

Masters Degree 5

Bachelors Degree 4

Diploma - Military or Community College 3

Carpentry trade 2

Labor background 1



TS-CP EXAMPLETS-CP EXAMPLE

DEPTH OF TECHNOLOGY STRATEGY

CO

NT

RA

CT

VA

LU

E P

ER

TE

CH

NIC

AL

EM

PL

OY

EE

($M

/PE

RS

ON

)

0

0.5

1

1.5

2

2.5

3

4 5 6 7 8 9 10 11 12 13 14

RO

CK

GE

CK

O

KR

C

DU

ND

EE

RA

INB

OW

TS

CP

1983-1992



Summary of results - TS-CP relationshipsSummary of results - TS-CP relationships

56 POSSIBLE RELATIONSHIPS0 - VE33 + VE

-6

-4

-2

0

2

4

6

8

10

12

14

# S

TR

ON

G R

EL

AT

ION

SH

IPS

CO

MP.

PO

SIT

ION

ING

SC

OP

E O

F T

S

DE

PT

H O

F T

S

OR

GA

NIZ

AT

ION

AL

FIT

NOTE: Analysis treats Rainbow as outlier



TECHNOLOGY STRATEGY AS A TECHNOLOGY STRATEGY AS A FUNCTIONAL STRATEGY FUNCTIONAL STRATEGY

( Adapted from Glueck, 1980 and Hampson, 1993)LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM

TECHNOLOGY STRATEGY

* Positioning * Sourcing * Depth * Scope * Organisation

CONSTRUCTION BUSINESS STRATEGY

MARKETING STRATEGY

* * *

PRODUCTION STRATEGY

* * *

FINANCE STRATEGY

* * *

HUMAN RESOURCE STRATEGY

* * *

OPERATION AND MAINTENANCE

BUSINESS STRATEGY

FABRICATION BUSINESS STRATEGY

DESIGN BUSINESS STRATEGY

CORPORATE LEVEL STRATEGY



TECHNOLOGY STRATEGY INTEGRAL TECHNOLOGY STRATEGY INTEGRAL WITH FUNCTIONAL STRATEGIESWITH FUNCTIONAL STRATEGIES

LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM

TechnologyStrategy

integratedacross allfunctions


MARKETING STRATEGY

* * *

PRODUCTION STRATEGY

* * *


BUSINESS STRATEGY




FINANCE STRATEGY

* * *

HUMANRESOURCESTRATEGY

* *

INDUSTRY INDUSTRY CONTEXT CONTEXT and and STRATEGIC STRATEGIC BEHAVIOURBEHAVIOUR





TECHNOLOGY STRATEGY

EXPERIENCETECHNICAL

CAPABILITIES


GE

NE

RA

TIV

E M

EC

HA

NIS

MS

INT

EG

RA

TIV

E M

EC

HA

NIS

MS


BUSINESSSTRATEGY



INDUSTRY CONTEXT

Monitor, review, document and standardise



5 FORCES DRIVING INDUSTRY 5 FORCES DRIVING INDUSTRY COMPETITION COMPETITION ( Porter, 1980 )

INDUSTRY

POTENTIAL ENTRANTS

BUYERS

SUBSTITUTES

SUPPLIERS

COMPETITORS

Technology affects Competition!Technology affects Competition!



CLARK CLARK (1989)(1989)

Managers need to link the world of

technology with the world of business.



ABELL ABELL (1980)(1980)

Technology is one of the three basic dimensions of business definition customer groups customer functions, and technologies.

This contrasts to the more traditional two-dimensional concept of product-market business strategy.



BURGELMAN AND ROSENBLOOMBURGELMAN AND ROSENBLOOM (1989)(1989)

Technology, from a competitive point of view, can be used in a defensive role, sustaining achieved advantage in differentiation or cost, or, offensively, as an instrument of expansion, to create new advantage in established lines of business



GENERIC GENERIC STRATEGYSTRATEGY



BUSINESS STRATEGY ALTERNATIVESBUSINESS STRATEGY ALTERNATIVES

3 major generic strategies: Become the cost leader (supply the product

or service at lowest feasible cost) Differentiate on basis important to

customers (who will therefore prefer it to alternatives)

Find a niche in the market and focus activities on the requirements of this niche



GENERIC STRATEGYOverall CostLeadership

Overall Differentiation Focus-SegmentCost Leadership

Focus-SegmentDifferentiation

TECHNOLOGICAL POLICIESProducttechnologicalchange

Product devt to reduceproduct cost bylowering materialscontent, facilitating easeof manufacture,simplifying logisticalrequirements.

Product devt to enhanceproduct quality,features, deliverability,or switching costs.

Product devt todesign in onlyenoughperformance forthe segment’sneeds.

Product design toexactly meet theneeds of theparticular businesssegmentapplication.

Processtechnologicalchange

Learning curve processimprovement.

Process devt to enhanceeconomies of scale.

Process devt to supporthigh tolerances, greaterquality control, morereliable scheduling,faster response time toorders, and otherdimensions thatimprove performance.

Process devt totune productionand deliverysystem to segmentneeds in order tolower cost.

Process devt totune theproduction anddelivery system tosegment need inorder to improveperformance.

(Porter, 1983)

TECHNOLOGICAL POLICIES AND TECHNOLOGICAL POLICIES AND GENERIC COMPETITIVE STRATEGIESGENERIC COMPETITIVE STRATEGIES



MICHAEL PORTER’S MATRIXMICHAEL PORTER’S MATRIX

High

LowDEG

REE O

F M

AR

KETIN

G

DIF

FER

EN

TIA

TIO

N Outstanding success

Disaster Cost leadership

Niche/focus

2 3

4 1

HighRELATIVE COSTS

Low



Market /Technology MatrixMarket /Technology Matrix

MARKETS

TE

CH

NO

LO

GIE

S

Existing Expanded New

Existing

Expanded

New

MARKET/TECHNOLOGY MATRIX

Strategicanalysis

Strategicdirection

Strategychoice

Strategyimplementation

Strategyevaluation& control

Analysis of the external environment

Analysis of internal skills and resources

Analysis of stakeholder needs andexpectations

Formulate strategic objectives

Identify performance measures

Generate strategic options

Choose a preferred strategy

Measure strategic objectives

Take corrective action

Develop appropriate systems

Acquire and utilise skills and resources

Develop appropriate organisationstructure

Manage the culture

ST

RA

TE

GIC

IN

FO

RM

AT

ION

SY

ST

EM

VIS

ION

MIS

SIO

N V

AL

UE

S

The Strategic Management Process(Source: Viljoen and Dann, 2000, p47)



LEADERSHIPLEADERSHIPVSVS

FOLLOWERSHIPFOLLOWERSHIP



TECHNOLOGICAL LEADERSHIPTECHNOLOGICAL LEADERSHIP

High technological opportunity Unique technology skills First mover advantages Relatively continuous

technological change Protection through patents



TECHNOLOGICAL FOLLOWERSHIPTECHNOLOGICAL FOLLOWERSHIP

Rapid changes in process technology or customer purchasing behaviour

Technological discontinuities/uncertainty Irreversibility of investments Leadership externalities Dissemination of technological information

through product inspection, reverse engineering, suppliers, customers, ex-employees.



DETERMINANTS OF THE LEADERSHIP - DETERMINANTS OF THE LEADERSHIP - FOLLOWERSHIP CHOICEFOLLOWERSHIP CHOICE

Industry structural characteristics: opportunity to influence cost or differentiation the uniqueness of the firm’s technological skills first mover advantages the continuity of technological change rate of change in process technology or customer purchasing

behaviour irreversibility of investments uncertainty, and leadership externalities.



LEADERSHIP EXTERNALITIES LEADERSHIP EXTERNALITIES

Gaining regulatory approvals and code compliance Winning customers away from substitutes

(marketing costs, penetration prices) Customer education on product usage Investments in infrastructure such as supply

sources, machinery, training repair and service personnel

Investments to improve the performance price or availability of complementary goods.



Technology Evaluation MatrixTechnology Evaluation Matrix

Imp

o rt a

nc e

of

tech

nol

ogy

in i n

du

str y

Technology leader

Catch up or get out

Technology adopter

De-emphasise technology

Leader Laggard

Technology position of the firm in industry

Op

erat

ion

alS

trat

egic



Paul CookPaul Cook (FORMER FOUNDER AND CEO OF RAYCHEM CORPORATION - (FORMER FOUNDER AND CEO OF RAYCHEM CORPORATION -

Taylor, 1990)Taylor, 1990)

A different, and I think more powerful, way to compete is to avoid competition altogether. The best way to avoid competition is to sell products that rivals can’t touch. No partnership or joint venture can substitute for technology leadership.



TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP AND GENERIC STRATEGIESAND GENERIC STRATEGIES

Technological Leadership Technological FollowershipOverall costleadership

First mover on lowest cost productor process technology.

Lower cost of product or processthrough learning from leader’sexperience.

Overalldifferentiation

First mover on unique product orprocess that enhances productperformance or creates switchingcosts.

Adapt product or delivery systemmore closely to market needs (orraise switching costs) by learningfrom leader’s experience.

Focus—lowestsegment cost

First mover on lowest cost segmenttechnology.

Alter leader’s product or process toserve particular segment moreefficiently.

Focus—segmentdifferentiation

First mover on unique product orprocess tuned to segmentperformance needs, or createssegment switching costs.

Adapt leader’s product or process toperformance needs of particularsegment or create segmentswitching costs.

(Porter, 1983)



Technological Leadership Technological FollowershipOverall costleadership

First mover on lowest cost productor process technology.

Lower cost of product or processthrough learning from leader’sexperience.

Overalldifferentiation

First mover on unique product orprocess that enhances productperformance or creates switchingcosts.

Adapt product or delivery systemmore closely to market needs (orraise switching costs) by learningfrom leader’s experience.

(Porter, 1983)

TECHNOLOGICAL LEADERSHIP-TECHNOLOGICAL LEADERSHIP-FOLLOWERSHIP AND GENERIC STRATEGIESFOLLOWERSHIP AND GENERIC STRATEGIES

TECHNOLOGICAL CHANGE TECHNOLOGICAL CHANGE AND INNOVATIONAND INNOVATION





TECHNOLOGY STRATEGY

EXPERIENCETECHNICAL

CAPABILITIES


GE

NE

RA

TIV

E M

EC

HA

NIS

MS

INT

EG

RA

TIV

E M

EC

HA

NIS

MS


BUSINESSSTRATEGY



INDUSTRY CONTEXT




TECHNOLOGY, INVENTION & INNOVATIONTECHNOLOGY, INVENTION & INNOVATION

Innovation is the first application of the invention (a technology) in production (Link)

3 phases in the process of technological change: invention, innovation, and diffusion (Schumpeter)

Inventive activity a new combination of available knowledge (Kuznets)

Science focusses on: the understanding of knowledge

Technology focusses on: the application of knowledge



INNOVATIONINNOVATION

“Innovation is described as the process of bringing any new problem-solving idea into use. Innovation is the generation, acceptance and implementation of new ideas, processes, products or services.” - Kanter, 1983, p20

Idea - Continuous Aim Firing “What one man could do partially and unconsciously,

perhaps all men could be trained to do consciously and completely.”



TECHNOLOGICAL INNOVATION IS A TECHNOLOGICAL INNOVATION IS A COMPLEX ACTIVITYCOMPLEX ACTIVITY

Technological innovation is a process made up of diverse parts, varied participants, complicated patterns of evolution and information feedback loops.

Research highlights the key role of people, as champions, inventor/entrepreneurs, or technology-familiar managers, in promoting and accelerating the implementation of innovation.



THE PRODUCT OR TECHNICAL THE PRODUCT OR TECHNICAL CHAMPIONCHAMPION

Innovation consists of two parts: new technology and a real or potential market.

The product champion: convinces management that new product or

process is feasible and worthy of significant investment.

conceptualises a technical vehicle so the corporation can develop a new product or service.

Sees relationship between scientific developments and market needs.



THE ORGANISATIONAL OR THE ORGANISATIONAL OR POLITICAL CHAMPIONPOLITICAL CHAMPION

Establishing and maintaining contact with top management, keeping them informed, and developing their enthusiasm for particular new activity

Organisational champion is able to relate parameters and potential of new venture persuasively to ultimate goals of the corporations



TECHNOLOGICAL ADVANCETECHNOLOGICAL ADVANCE

Driven by the combination of chance or random events (variation), the direct social, political action of individuals and organisations in selecting between rival industry standards (selection), and the incremental, competence-enhancing, puzzle-solving actions of many organisations that are learned by doing (retention). (Anderson and Tushman, 1990, p606)



THE TECHNOLOGY CYCLETHE TECHNOLOGY CYCLE

(Source: Anderson and Tushman, 1990, p606)

Era of Ferment•Design competition•Substitution

Era of Incremental Change•Elaboration of dominant

design

TIME

Technological Discontinuity 1

Technological Discontinuity 2

Dominant Design 1



COMMON MISCONCEPTIONS COMMON MISCONCEPTIONS ABOUT TECHNOLOGY ABOUT TECHNOLOGY 1/21/2

Misconception Reality1 “Best possible” determines the

choice of technology.“Good enough” is the basisfor choice.

2 Choice of technology results fromrational analysis.

Choice strongly influenced byconvention and past practice.

3 Technology advances ordiscoveries are usually adopted.

Most don’t succeed - andshouldn’t.

4 The biggest hurdle is making theoriginal discovery - downstreamdevelopment is just a matter ofapplying the necessary effort

Most of what is not yet knowabout a new discovery isprobably bad and requirescreativity to overcome.



MISCONCEPTIONS MISCONCEPTIONS (cont)(cont) 2/22/2

Misconception Reality5 Technological advances have

intrinsic value.The customer determines value.

6 Radically new advances will win. New is not necessarily better.7 The power of a new technology

determines its success.Infrastructure required to supportit is often the determining factor.

8 Progress in technology comesprincipally from continuing toimprove performance.

Progress requires establishingstandards, imposing constraints,and achieving routine.

9 A new technology can be graftedonto an existing business.

The new product and the businesssystem developed to produce itshould be created together.



TECHNOLOGY MATURATION SEQUENCETECHNOLOGY MATURATION SEQUENCE(Arthur D. Little, 1981)

AgeingAgeing

MatureMature

GrowingGrowing

EmbryonicEmbryonic

TEC

HN

ICA

LTEC

HN

ICA

LA

DV

AN

CE

AD

VA

NC

E

TIMETIME



TEC

HN

ICA

LTEC

HN

ICA

LA

DV

AN

CE

AD

VA

NC

E

TIMETIME

Era of Capital IntensityEra of Capital Intensityand Finance Dominationand Finance Domination

Era of Process ImprovementEra of Process Improvementand Manufacturing Dominationand Manufacturing Domination

Era of Product InnovationEra of Product Innovationand Engineering Design Dominationand Engineering Design Domination

Natural Limit of Technology

TECHNOLOGY MATURATION TECHNOLOGY MATURATION (Steele, 1989)



INDUSTRY MATURATION INDUSTRY MATURATION (Utterback, 1987)

NU

MB

ER

AN

D I

MP

AC

TN

UM

BER

AN

D I

MP

AC

TO

F I

MP

RO

VEM

EN

TS

OF I

MP

RO

VEM

EN

TS

Product InnovationProduct Innovation

Process InnovationProcess Innovation

TIMETIME



INNOVATIONS MAPINNOVATIONS MAP(Clark, 1985)

NicheCreation Architectural

Regular Revolutionary

Mar

kets

/Cu

sto

mer

Lin

kag

esM

arke

ts/C

ust

om

er L

inka

ges

Production SystemsProduction Systems

Radical

Conservative

Ra

dic

al

Co

nse

rvat

ive




IMPACT ON CAPABILITIES: PRODUCTION SYSTEMSIMPACT ON CAPABILITIES: PRODUCTION SYSTEMS

Systems/Organisation

Skills

Materials/Suppliers

Capital

Knowledge/Experience

Entrench Neutral Obsolete




IMPACT ON CAPABILITIES: MARKETS/CUSTOMERSIMPACT ON CAPABILITIES: MARKETS/CUSTOMERS

Customer Base

Customer Applications

Channels of Distribution and Service

Customer Knowledge

Modes of Communication

Entrench Neutral Create New




NicheCreation Architectural

Regular Revolutionary

Mar

kets

/Cu

sto

mer

Lin

kag

esM

arke

ts/C

ust

om

er L

inka

ges

Production SystemsProduction Systems

Radical

Conservative

Rad

ical

Con

serv

ativ

e

Plot the locationof the proposedtechnological change

Determine the management implications of the change



INNOVATION AND COMPETITION: INNOVATION AND COMPETITION: IMPLICATIONS FOR MANAGEMENTIMPLICATIONS FOR MANAGEMENT

Revolutionary innovation requires focus on technical excellence disciplined by market realities, a focus on project management and dedication of resources to critical areas.

Niche innovation requires highly responsive manufacturing, an aggressive and creative marketing organisation and high level of integration between them.

Architectural innovation requires synthesis of science-based technical developments with insight into emerging worker needs.

Regular innovation thrives where analysis is thorough and planning rigorous and disciplined.

TECHNOLOGICAL TECHNOLOGICAL TRENDS TRENDS and and FORECASTINGFORECASTING



WHAT IS TECHNOLOGICAL FORECASTING?WHAT IS TECHNOLOGICAL FORECASTING?

A technological forecast is a prediction of the future characteristics of useful machines,

procedures, processes, or techniques.



TECHNOLOGICAL FORECASTINGTECHNOLOGICAL FORECASTING

Man cannot predict the future, but he can invent it. … ?? (Dennis Gabor, 1964)

Technological forecasting aims at predicting long-term technological trends and other important environmental features. The description of prediction of foreseeable

technological innovation, specific scientific refinement, or likely scientific discovery, that promises to serve some useful function, with some indication of the most probable time of occurrence.



the technology being forecast the time of the forecast characteristics of technology concerned

probabilities associated with the forecast.

TECHNOLOGICAL FORECAST TECHNOLOGICAL FORECAST HAS 4 ELEMENTSHAS 4 ELEMENTS:



by identifying limits a technology can go by establishing feasible rates of progress by defining alternatives

FORECASTING IS AIMED AT IMPROVING FORECASTING IS AIMED AT IMPROVING THE QUALITY OF DECISION MAKINGTHE QUALITY OF DECISION MAKING



maximise gain from events external to the organisation minimise loss associated with uncontrollable events

external to the organisation offset the actions of competitive or hostile organisations forecast demand develop infrastructure plans and policies ie, maximise gain and minimise cost

WE MAKE TECHNOLOGICAL WE MAKE TECHNOLOGICAL FORECASTS TO:FORECASTS TO:



INPUTS TO THE FORECASTING SYSTEMINPUTS TO THE FORECASTING SYSTEM

Information from the past.

Knowledge of the present.

The ability of the human intellect:

logical thought process insight, and judgment.

?



The Technology S - CurveThe Technology S - CurveLimit of performance

Time

Par

amet

er o

f P

erfo

rman

ce

1

2

3

1 Period of slow initial growth.2 Rapid exponential growth.3 Growth slows as performance approaches a natural physical limit

asymptotically.



FORECAST FROM HISTORICAL DATAFORECAST FROM HISTORICAL DATA

Ultimate limit of capability

Per

form

ance

Time

Today

ForecastHistory



Lag Times for Automotive InnovationsLag Times for Automotive Innovations

Source: Joseph P. Martino, University of Dayton, OhioCommunicated at PICMET 1999, Portland Oregon:

Workshop on Technology Forecasting

0 2 4 6 8 10 12 14 16

Turbocharger

Plastic Structural Parts

Prestige - massDemo - Prestige

Plastic Body Shell

Fuel Injection

Electronic Ignition

Electronic Engine Ctrl

YEARS

INN

OV

AT

ION



Minimum Risk Policy for Possible Minimum Risk Policy for Possible Alternative FuturesAlternative Futures

Future A Future B

Future C

The Present

R &

D P

olic

y 1

R & D

Poli

cy 2 Time T



Relevance TreeRelevance TreePollution-free road

transport

Electric car Piston-engined petrol car

Wankel-engined petrol car

Possible solutions

Energy Source Motor Transmission

MotorFuel cellEnergised external

source Internal Combustion

A B C D K L P Q R V W X Y Z Projects

Functions to be performed

Possible solutions to functional need

Specific research projects to solve

particular problems

Objective

(Source: Twiss, 1982)

Forecasting the future is risky, butForecasting the future is risky, butcontemplating the future is the contemplating the future is the

first step to progress.first step to progress.

A finished plan is useless, but its A finished plan is useless, but its preparation is essential.preparation is essential.(A slight misquotation of a very successful general)

FO

RE

CA

ST

ING

EX

AM

PL

EF

OR

EC

AS

TIN

G E

XA

MP

LE



FORECASTINGFORECASTING

The question should not be whether or not to forecast, but:

To what extent is it necessary to forecast?

Which are the most appropriate techniques, given the limitations of what can be afforded?



TECHNOLOGICAL FORECASTING ...TECHNOLOGICAL FORECASTING ...

Cannot enable decision maker to predict the future with certainty. But it can assist in refining judgments.

Value of forecasts highly dependent upon quality of information and calibre of minds applied to it.

The brush paints only as well as the painter’s hand can. Sophisticated forecasting techniques can only be aids,

and care should be taken to guard against technological forecasting absorbing greater resources than can be justified in economic terms.

ORGANISATIONAL ORGANISATIONAL CONTEXT: CONTEXT: MANAGING MANAGING THE THE TECHNICAL TECHNICAL FUNCTIONFUNCTION





TECHNOLOGY STRATEGY

EXPERIENCETECHNICAL

CAPABILITIES


GE

NE

RA

TIV

E M

EC

HA

NIS

MS

INT

EG

RA

TIV

E M

EC

HA

NIS

MS


BUSINESSSTRATEGY



INDUSTRY CONTEXT




ORGANISATIONAL CONTEXT OF ORGANISATIONAL CONTEXT OF TECHNOLOGY MANAGEMENTTECHNOLOGY MANAGEMENT

Core Capabilities Staffing the Technical Function

Personal characteristics Management challenges

Organising for Innovation Organisational Learning



TECHNOLOGY AND TECHNOLOGY AND APPROPRIATE MANAGEMENTAPPROPRIATE MANAGEMENT

Often technology is applied at the enterprise level as a productivity driver without attention to the other attendant issues of organisation, competence and work force commitment. Consequently, the benefits of technology are curtailed. (Scott, 1994, p55)



People don’t resist technology - People don’t resist technology - they resist the effects (or they resist the effects (or

perceived effects) of technology perceived effects) of technology



A FIRM'S CORE CAPABILITYA FIRM'S CORE CAPABILITY “The knowledge set that distinguishes and

provides a competitive advantage.” It is the core capabilities that differentiate

a company strategically. 4 dimensions to this knowledge set:

employee knowledge and skills technical systems managerial systems values and norms Leonard-Barton (1992, 113)



ABSORPTIVE CAPACITYABSORPTIVE CAPACITY

The ability of an organisation to recognise the value of new information, assimilate it, and apply it to commercial ends.

Possession of relevant knowledge and skills of individuals gives rise to creativity, problem-solving skills and technological linkages that may have never been considered before. (Cohen and Leventhal, 1990)



Effective Technology MonitoringEffective Technology Monitoring

Effective Technology Effective Technology MonitoringMonitoring

Product and Equipment Vendors

Owners/Clients

Customers/Tenants

Universities

Research Centres

Consultants

(Upstream & Downstream)

Publications (Academic,

Associations, Industry and

Generic)

Conferences/Seminars/EducationInterest Groups



Chance favours the prepared mindChance favours the prepared mind(Steven Seagal in Under Siege II)

… Be prepared!… Be prepared!(Lord Baden Powell)

FIRMS CAN BE MORE PROACTIVEFIRMS CAN BE MORE PROACTIVE

“EXCELLENCE is

NEVER an

ACCIDENT”



EFFECTIVE INITIATORS OF CHANGEEFFECTIVE INITIATORS OF CHANGE((Rosabeth Moss Kanter 1982)Rosabeth Moss Kanter 1982)

Characteristics of Innovative Middle Managers

•Desire for change - tolerance for uncertainty

•Foresight, vision, clarity of direction

•Thoroughness - complete preparation

•Political astuteness

•Participative management style

•Persuasive

•Pushes to the limits of his/her discretion

•Persistence.



3 PHASES OF AN INNOVATION LED BY 3 PHASES OF AN INNOVATION LED BY A CORPORATE ENTREPRENEUR A CORPORATE ENTREPRENEUR (Kanter, 1983)(Kanter, 1983)

1. Problem Definition- Gaining and applying information to shape a feasible project- Listening to managers, staff, suppliers, customers- Seeking political information- Obtaining data to demonstrate need

2. Coalition Building- Clearing the resistance with bosses- Preselling and making “cheer leaders”- Horse Trading with other staff, managers and departments- Securing the blessing of higher level officials- Formalising the coalition.

3. Mobilisation and Completion- Handling opposition and blocking interference- Maintaining momentum with team building- Secondary redesign by bending or breaking rules and systems- External communication - managing the press- Delivering on promises.



ENTREPRENEURIAL ATTRIBUTESENTREPRENEURIAL ATTRIBUTES(Timmons, 1989)

(a) Total commitment, determination and perseverance(b) Drive to achieve and grow(c) Opportunity and goal oriented(d) Taking initiative and personal responsibility(e) Persistent problem solving(f) Veridical (truthful) awareness and a sense of humour(g) Seeking and using feedback(h) Internal locus of control(i) Tolerance for ambiguity(j) Calculated risk-taking and sharing(k) Low need for status and power(l) Integrity and reliability(m) Decisiveness, urgency and patience - in balance(n) Dealing with failure(o) Team builder and hero maker.

If I had thought about it, I wouldn't have If I had thought about it, I wouldn't have done the experiment. The done the experiment. The

literature was full of examples that said literature was full of examples that said

you can't do this.you can't do this.

Spencer Silver The originator of Post-it Notepads



You can train people technically, but you can't teach them curiosity. The desire to

innovate comes partly from the genes you're born with it. It also comes from your early life,

your education, the kind of encouragement you got to be creative and original. Innovative people come in all shapes and sizes and in

all personality typesPaul Cook, founder and former CEO of Raychem

Corporation

INNOVATIVE PEOPLEINNOVATIVE PEOPLE



… people who genuinely want to serve the customer, who want to build products superior to anything that's come before, who are willing to stick their necks out to do new things. That means learning how their minds work, what they think about, what excites them, how they approach problems. The person who can combine deep knowledge of the technology with deep knowledge of the customer is the rarest person of all—and the most important person in the process of innovation

Paul Cook, founder and former CEO of Raychem

Corporation

FINDING THE RIGHT PEOPLEFINDING THE RIGHT PEOPLE



INTRAPRENEUR’S TEN COMMANDMENTS INTRAPRENEUR’S TEN COMMANDMENTS (Pinchot, 1985)

1. Come to work each day willing to be fired2. Circumvent any orders aimed at stopping your dream3. Do any job to make your project work, regardless of your job description4. Find people to help you5. Follow your intuition about the people you choose, work only with the best6. Work underground as long as you can - publicity triggers the corporate

immune mechanism7. Never bet on a race unless you are running in it8. Remember it is easier to ask for forgiveness than for permission9. Be true to your goals, but be realistic about the ways to achieve them 10. Honour your sponsors



MANAGEMENT STYLE FOR INNOVATIONMANAGEMENT STYLE FOR INNOVATION

Strong association between innovation and participative-collaborative management style: Persuading more than ordering, though managers may

use pressure as a last resort. Building a team with frequent staff meetings and

considerable sharing of information. Seeking inputs from others - asking for ideas,

soliciting suggestions, welcoming peer review. Acknowledging others' stake or potential stake in the

project - being politically sensitive. Sharing rewards and recognition willingly.



REMEMBER ‘MACHIAVELLI’S REMEMBER ‘MACHIAVELLI’S ASYMMETRY’ASYMMETRY’

The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new.

‘Burgelman’s Paradox of Corporate Culture’:

Even a corporate culture orientedtoward innovation is somewhatresistant to change.



BUILDING OWNERSHIPBUILDING OWNERSHIP

Having a voice in 5 critical features of the project planning and management process: Providing opportunities to help shape project. Allowing time for team members to build

ownership. Setting acceptable and reasonable priorities. Defining project objectives that continue to be

regarded as attainable as work progresses. Creating appropriate rewards and penalties.



Team DevelopmentTeam Development (Montebello, Work Teams that Work; Skill for Managing Across the Organisation, 1995)

Building Strong Relationships

Managing Productive Meetings

Promoting Open Communication

Making Rational Decisions

Managing Conflict & Disruption

Storming Performing

Forming Norming

High

HighLowGe

ttin

g T

hin

gs

Do

ne

D

irec

tio

n,

Str

uct

ure

an

d

Org

anis

atio

n



MEASUREMENT AND REWARDMEASUREMENT AND REWARD

Systems must reflect the importance associated with technology development

What gets measured, gets done The most important factor is individual recognition - more

important than salaries, bonuses, or promotions. We don’t just reward success; we reward intelligent

effort. We’ve paid sizeable bonuses to people who have worked day and night, with remarkable proficiency, on a year-long project - only to find the market had disappeared. (Cook, in Taylor, 1990)



PROJECT MANAGEMENTPROJECT MANAGEMENT

Functional Project Management (serial) tossing the bear over the wall

Multifunctional Project Management (parallel) identify all of skills and resources required for project

completion. Skills are assembled, or committed, at the outset, and the project manager’s responsibility is to complete all phases of the project—not to hand it off to some other group at some predetermined point.



SEQUENTIAL DEVELOPMENT PROCESSSEQUENTIAL DEVELOPMENT PROCESS

Marketing

Design Engineers

Process Engineers

Manufacturing

Marketing



PARALLEL DEVELOPMENT PROCESSPARALLEL DEVELOPMENT PROCESS

Design Engineers

Process Engineers

Manufacturing

Marketing

ProblemDefinition

ProductHandover



TRADITIONAL BUILDING PROCUREMENTTRADITIONAL BUILDING PROCUREMENTActivity Client Consultant Contractor

Establish needObtain advice

Decision to buildProcurement decision

Consultant(s)selection

Procure DesignServices

Consultant(s) appointed

Procurement/Establish brief Brief agreed Contract

confirmedDesign and costdevelopment

Agreement ofprocurement/contract

Design/costdevelopment

P3 – product,program, priceagreement

P3 - agreed

Tenderdocumentationcontractor(s)selection

Contractor(s)qualification

ProcureConstructionServices

Tendering invitationand acceptance

Bidding

Constructioncontract made

Signing Signing

Construction Interim payments Administration Construction

Completion Occupation Acceptance Completion

(Turner 1990, p49)



IMPORTANCE OF MANAGING EARLY IMPORTANCE OF MANAGING EARLY PROJECT PHASESPROJECT PHASES

TimeTime

Ability to influence Ability to influence Performance/ResultsPerformance/Results Cost to ChangeCost to Change

Initiation & ConceptInitiation & Concept

Project Planning & DesignProject Planning & Design

Procurement & ConstructionProcurement & Construction

Completion & HandoverCompletion & Handover



A RIGHT ROYAL QUOTE!A RIGHT ROYAL QUOTE!

HRH the Duke of Edinburgh:

The first problem is to define the problem

(Turner, 1990, p16).



ORGANISATIONAL LEARNINGORGANISATIONAL LEARNING

Learning and unlearning (Burgelman & Maidique, 1988)

Learning by doing (Arrow, 1962)

Learning by using (Rosenberg, 1982)

Learning by failing (Maidique & Zirger, 1988)

The illiterate of the eighties was the person who could not read or write …

The illiterate of the nineties is the person who cannot learn, unlearn, and relearn.

Alvin Toffler



EVOLUTIONARY PROCESS OF STRATEGY EVOLUTIONARY PROCESS OF STRATEGY MAKING IN ESTABLISHED FIRMSMAKING IN ESTABLISHED FIRMS

Burgelman's (1983) research centred on Internal Corporate Venturing (ICV) process in a major diversified high-technology manufacturing firm.

Examined relationship between project development and business development within the firm.

Found that interaction of entrepreneurial activities of middle managers produced corporate entrepreneurship.

Organisational forces at corporate level also influenced entrepreneurial activities of individuals.



EVOLUTIONARY STRATEGY MAKING EVOLUTIONARY STRATEGY MAKING PROCESS IN ESTABLISHED FIRMSPROCESS IN ESTABLISHED FIRMS

(Source: Burgelman, 1983)

AutonomousStrategicBehaviour

StrategicContext

StructuralContext

InducedStrategicBehaviour

Concept of

Corporate

Strategy



ORGANISATION DESIGNS FOR ORGANISATION DESIGNS FOR CORPORATE ENTREPRENEURSHIPCORPORATE ENTREPRENEURSHIP

(Burgelman, 1984)

OP

ER

ATIO

NA

L R

ELA

TED

NES

S

STRATEGIC IMPORTANCE

VERY IMPORTANT UNCERTAIN NOT IMPORTANT

STRONGLY RELATED

PARTLYRELATED

UNRELATED

Design alternatives

1. Direct Integration

2. New Product/ Business Dept

3. Special Business Units

6. Independent Business Units

5. New Venture Division

4. “Micro” New Ventures Dept

9. Complete Spin-off

8. Contracting

7. Nurturing and Contracting



TECHNOLOGY STRATEGY AS A TECHNOLOGY STRATEGY AS A FUNCTIONAL STRATEGY FUNCTIONAL STRATEGY

( Adapted from Glueck, 1980 and Hampson, 1993)LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM

TECHNOLOGY STRATEGY * Positioning * Sourcing * Depth * Scope * Organisation


MARKETING STRATEGY

* * *

PRODUCTION STRATEGY

* * *

FINANCE STRATEGY

* * *

HUMAN RESOURCE STRATEGY

* * *


BUSINESS STRATEGY






TECHNOLOGY STRATEGY INTEGRAL WITH TECHNOLOGY STRATEGY INTEGRAL WITH FUNCTIONAL STRATEGIESFUNCTIONAL STRATEGIES

TechnologyStrategy

integratedacross allfunctions

LEVELS OF STRATEGY FOR A DIVERSIFIED AEC FIRM


MARKETING STRATEGY

* * *

PRODUCTION STRATEGY

* * *


BUSINESS STRATEGY




FINANCE STRATEGY

* * *

HUMANRESOURCESTRATEGY

* *





TECHNOLOGY STRATEGY

EXPERIENCETECHNICAL

CAPABILITIES


GE

NE

RA

TIV

E M

EC

HA

NIS

MS

INT

EG

RA

TIV

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EC

HA

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MS


BUSINESSSTRATEGY



INDUSTRY CONTEXT

Monitor, review, document and standardise



TECHNOLOGY STRATEGY TECHNOLOGY STRATEGY FORMULATION FORMULATION (Porter, 1985)(Porter, 1985)

1. Identify all distinct technologies and sub-technologies in value chain.

2. Identify potentially relevant technologies in other industries or under scientific development.

3. Determine the likely path of change of key technologies.

4. Determine which technologies and potential technological changes are most significant for competitive advantage and industry structure.

5. Assess a firm's relative capabilities in important technologies and the cost of making improvements.

6. Select a technology strategy, encompassing all important technologies, that reinforces the firm's overall competitive strategy.

7. Reinforce business unit technology strategies at the corporate level.

FUTURE FUTURE TRENDS TRENDS and and CONCLUSIONSCONCLUSIONS



FUTURE TRENDS FUTURE TRENDS (Steele, 1989)(Steele, 1989)

A relentless shift from selling tools, which customers use to solve problems, to selling solutions based on specific knowledge of customers’ needs and customised responses to those needs.

Global markets, global competition, and global operations must become the starting point for all management planning.



FUTURE TRENDS FUTURE TRENDS (Cook in Taylor, 1990)(Cook in Taylor, 1990)

Intellectual property is key Must develop a critical mass of different skills.

For a small company this means focussing on one core technology

For a large company taking advantage of the technology scale and scope to push frontiers of adopted technology.

Innovation is a global game today - both on the supply side and on the demand side. Multi-disciplinary and multi-national teams working

together are seen to produce the best global solutions.

Central to the advancement of Central to the advancement of human civilization is the spirit of human civilization is the spirit of open enquiry. We must learn not open enquiry. We must learn not

only to tolerate our differences, we only to tolerate our differences, we must welcome them as the richness must welcome them as the richness and diversity which can lead to true and diversity which can lead to true

intelligenceintelligence

Albert Einstein



BUSINESS STRATEGIES FOR THE FUTUREBUSINESS STRATEGIES FOR THE FUTURE

((Construction Industry Institute, 1992)Construction Industry Institute, 1992)

Responsibilities of upper management: provide a working environment that stimulates

innovation and caters to needs of employees developing organisationally to allow quick

movements into or out of markets concentrating more on being a salesperson to

clients, with less emphasis on merely managing subordinates and more emphasis on single point responsibility for projects

Managers need to link the world of technology

with the world of business (Clark, 1989)

… And partnerships between participants is likely to provide the

best solutions.



THE R&D EFFORT PORTFOLIOTHE R&D EFFORT PORTFOLIO

TEC

HN

ICA

LTEC

HN

ICA

LO

PP

OR

TU

NIT

YO

PP

OR

TU

NIT

Y

MARKET OPPORTUNITYMARKET OPPORTUNITY

Hig

hM

od

era

teLow

HighModerateLow

SelectiveEmphasis

LimitedSupport

HeavyEmphasis



Dynamics of organisational changeDynamics of organisational change

LEVEL OF LEARNING REQUIREDLEVEL OF LEARNING REQUIRED

TIME TO ADJUSTTIME TO ADJUST MAGNITUDE OF CHANGEMAGNITUDE OF CHANGE

Skills

Procedures

Structure

Strategy

Culture

Small LargeWeeksMonthsYears

(Adler & Shenbar, 1990)

“Change is a whole lot easier to make when

you’re the change artist”

They that will not apply new They that will not apply new remedies must expect new remedies must expect new

evils; for time is the greatest evils; for time is the greatest innovatorinnovator

Francis Bacon from Essay on Innovations (1625)



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One machine can do the work of fifty ordinary men.

No machine can do the work of one extraordinary man.

Elbert Hubbard, author, editor, printer (1856-1915)

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