Innovation Activities – Research Activities – Development Activities – Product/Service Development Activities – Administrative Capabilities – Tinkering/Experimenting Results – Inventions – Innovations Are they usable? Who needs them? Innovation for whom or what? – Incremental – Radical Robert Moussetis

Innovation Sensing the Urgency to Innovate – Urgency – Impact Challenges of Finding New Markets for New Technologies – Where do we sell our new products? How and Why Innovation must remain connected with Strategy Resources and Innovation – Managerial Capability – Financial Commitment – Cultivating the Innovation bug Robert Moussetis

History of a Strategic Change LIFETIME ROI = + AREA - AREA NET CASH FLOW Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000

Innovation is Change Departure from – An established Practice – A method to do things – An approach to solve problems – Established Convictions – Existing products – Existing Services Arrival at – Uncharted territory – New Methods – New Parameters – New Boundaries – New Services and Products – New beliefs Robert Moussetis Is the departure sudden or was it planned?

Change Change is Adaptation to – Environment – Culture -Society – Economies-Politics Change could be – Fast, rendering stakeholders incapable of adapting – Slow, rendering stakeholders time to adapt – Complex - Novel – Unpredictable Organizational Boundaries Basic System Function Input x Output y y=f(x) Adaptation Process Robert Moussetis

Paradigm What is a Paradigm? Why do we use paradigms? What is a Paradigmic Shift? What is a Paradigmic Effect? What is a Paradigmic Filter? Robert Moussetis Death in the Drawer Paralysis by Analysis Explore the Boundaries Change before you have to Lead, do not manage Control your destiny or someone else will

Paradigm Robert Moussetis Accepted Paradigm New Paradigm Radical New Paradigm Incremental Paradigm How do we get here? Radical Shift Incremental Shift

Change Incremental Change – Incubation Period » Religion » History » Technology Discontinuous Change – Surprises - Sudden Shifts -Unforeseen Events » Religion » History » Technology Robert Moussetis Is Change Constant? Rate of change Complexity of Change Predictability of Change Novelty of Change

Paradigm Robert Moussetis Accepted Paradigm New Paradigm Radical New Paradigm Incremental Paradigm How do we get here? Radical Shift Incremental Shift

Environment Complexity of Firm’s Environment – Repetitive to Surprising Relative Novelty of the Successive Challenges – Familiar to Discontinuous and Novel Rate of change – Slower to faster than capability to respond Visibility of upcoming changes – Recurring to Unpredictable Robert Moussetis

Organizational Change Behavioral Orientation of Organization – Does the leadership like stability? – Does the leadership avoid change? – Does the leadership like to react to change? – Does the leadership anticipates changes? – Does the leadership engages in changes before they have to? – Does the leadership creates/dictates the rules of change? Strategic Behavior - Strategic Aggressiveness – stable-reactive-Anticipatory-Entrepreneurial-Creative Robert Moussetis

Organizational Change – Environment brings change And forces organizational change – Organizations are composed of people with: Different Behaviors and Capabilities Different Cultures, Mentality and Systems Different Perceptions about: – change-leadership-risk propensity-power structure – problem solving-attitude towards change- – time perspective-action perspective-change triggers Contingency Change Appropriate to the Organization Robert Moussetis Is Change Constant?

Evolution of Management Systems Strategic Planning –Analysis of Firm’s Prospects –Competitive Analysis –Strategic Portfolio Analysis Closes the Competitive Gap –Diversification Analysis Long Range Planning –Action Programs, Budgets, and Implementation Strategic Planning –Balances Prospects against Objectives to produce a strategy Strategic Posture Management Strategic Work Environment Strategy Capability Environment Strategy Capability S1 S2 E1 E2 C1 C2 Capability is introduced into Strategic Management Mentality-Culture-Power Structure Systems-Organizational Structure Capacity

Strategic Diagnosis: Background Evolution of change Agenda makes it dangerous to base future plans on successful responses to historical challenges There is no single prescription for future success which will apply to all firms Management confronts two Key Problems – Each Organization needs to diagnose its unique future challenges, threat and opportunities – Each firm must design and implement its unique response to these challenges

Strategic Diagnosis: Definition A systematic approach to determining the changes that have to be made to a firm’s strategy and its internal capability in order to assure the firm’s success in its future environment Environmental Turbulence is a combined measure of the changeability and predictability of the firm’s environment – Complexity – Novelty – Rate of Change – Visibility

Strategic Diagnosis: Example Environmental Turbulence Strategic Aggressiveness Responsiveness of Capability Repetitive Slow Incremental Fast Incremental PredictableUnpredictable RepetitiveExpandingChangingDiscontinuousSurprising Custodial Adapts to Change Seeks Familiar Change StrategicFlexible Stable Reactive AnticipatoryEntrepreneurialCreative

Strategic Segmentation Strategic Information Model Competitive Positioning Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000 How can we systematically “divide” our environment into “workable areas”? How do we make sure that the information we received from the environment involves legitimate (perceived) information? How do we systematically design a competitive organization? How do we interpret qualitative data? Perception vs. Reality for Organizational Leaders

SBA:A Strategic Business Area which is a distinct segment of the environment in which a firm does (or may want to do) business In which SBAs will the firm do business in the future? What competitive position will the firm occupy in each SBA What competitive strategy will the firm pursue to gain this position SBA Segmentation Dimensions: Need, Customer type, Technology and Geography Characteristics: Growth, Performance (Profitability), Turbulence and Success factors Strategic Resource Area: In the resource based postindustrial universe, managers have to balance what they want to do against what they can do Strategic Influence Groups: Firms increasingly legal and societal pressures - Stakeholder Management Firm Environment SBA SBU SBASBA 1 SBA 2 Ansoff and McDonnell, 1990 Created by Robert Moussetis, 2000