Managing in Information Intensive Companies Brief Summary of Some Key Themes Dec. 3 2010 Prof. Morten Hansen (Class notes provide all the detail; This summary is just a few highlights)

Approach in the course Process lens As a manager, how do you organize a sequence of activities that guide how people carry out work within established organizations? 3 processes (modules) Managing innovation Managing collaboration Managing team decision making

1) Managing Innovation How can established companies overcome their innovation problem? Existing business Mechanistic, exploitative: set up to execute on existing operations New businesses are different Exploratory, organic Different markets, business models/economics Different people and skills required Different metrics needed

Innovation Value Chain View View innovation process as one whole process Idea generation => conversion => diffusion Need to be good in all links Concentrate on improving the weakest link Understand that skills and tasks differ as move along the chain Idea generation: creativity, dreaming, seeing opportunities Conversion: project management, manage organization Diffusion: “Show me the money!” E.g., RR Donnelley case exemplifies this

Hybrid structure that separates and integrates Fully integrated (in units) Hybrid (linked to units +separate operations) Stand-alone Benefits of integration Access to resources (money, people, expertise, customers, distribution), commitment from line, eventual transfer to line Benefits of separation Venture unit/corporate incubator (e.g., IBM) or separate division (RR Donnelley) Entrepreneurial freedom, entrepreneurial people, higher risk-reward incentives, different metrics (e.g., IBM)

New business champions need political skills Innovation is a messy process, requiring project champions to navigate the social and political landscape in a company (e.g., Dow Chemical case) Manage up, down, across Manage larger organization Do not only use rational arguments i.e., do not only argue that “it’s a good project”, but understand the motives of other people and units Use influence tactics: Build internal coalitions, build momentum, “sell” to others in the organization, enlist supporters, trade favors with others (norms of reciprocity), ingratiate, etc.

Solutions encompass several “levers”: they need to be aligned “Hard” “Soft” Culture: Risk/Failure + Implementation Structure: Separate + Integrated Aligned Skills: Ambidextrous Process: Innovation Value Chain Politics/Social: Use influence tactics Metrics: Hitting milestones, Not strict financials

2) Managing collaboration How can managers install effective collaboration in organizations? Problem: Silos, independent units make it hard to collaborate Collaboration is often difficult Inefficient, overdone, conflict Bad collaboration is worse than no collaboration

Disciplined Collaboration Summary Select Opportunities Spot Barriers Tailor Levers Innovation Cross-selling Best practices 4 Barriers Unifying Goal T-shaped Networks => Lower costs, better efficiency, more sales

Cross unit collaboration T-shaped management Collaborate: Ask for help Give help Connect Joint work Cross unit collaboration Own/ unit focus T-shaped professionals have a high ability to simultaneously deliver strong results for their own area and contribute across the organization

3) Managing team decision making How can teams make good decisions? (in situations of ambiguity and incomplete information) Problems Fragmented organizational context Different viewpoints, different agendas Need for buy-in once decisions are made

Be aware of organizational complexity Complex organizations, complex processes Multiple units Hierarchical levels Pressures Information and activity overload Different people hold different information Different people hold different views (Columbia Shuttle case)

Increase cognitive and decrease affective conflicts Devil’s advocacy + Cognitive conflict + Debate alternatives, Deep analysis, New ideas + Better decisions + Stimulate conflict and debate + Affective Conflict Personal animosity, Less group harmony, Poor decision acceptance Poor implementation + + + Dialectical inquiry Key is to break this path

Orchestrate process up front Manager’s Role Factors Creating The Context Quality of Problem Solving Processes Quality of Outcomes Approaches Structure Membership Setting Leadership Experience Style Situational Factors Level of urgency Time available Roles Assigned Conflict Mgmt. Norms Openness to data Underlying agenda Power balancing Size of Group Means of dialogue Multiple alternatives Testing of assumptions Clear criteria Dissent & debate Perceived fairness Quality of decision Implementation effectiveness Timeliness

Change theme running through all three modules Process lens: See the problem/situation as a process with a sequence of activities Not an event, or a static problem Analyze whole process, then change Processes get stuck, cemented. Needs active management to be re-engineered.

Change theme running through all three modules Process lens: See the problem/situation as a process with a sequence of activities Not an event, or a static problem Analyze whole process, then change Processes get stuck, cemented. Needs active management to be re-engineered. You improve performance as a manager by improving processes, not just individual work