Collaborative Architectures for Innovation
|Authors:||Gary P. Pisano and Roberto Verganti|
Collaborative innovation has become a hot topic in innovation today. Scholars, consultants, and the business press all urge companies seeking to boost innovative performance to become more "collaborative." Too often, however, companies fail to distinguish among the various choices they face with respect to alternative modes of collaboration. Collaborative innovation can take a wide variety of forms, each with profound implications for innovative performance and the value a firm can capture from innovation. Building on a number of case studies, this paper presents a simple framework for categorizing different collaborative modes. The framework is based on the notion that there are two critical dimensions along which collaborative efforts can be characterized. The first dimension relates to the degree to which the collaborative network is "open" verses "closed." The second dimension relates to the degree to which the governance structure for collaboration is "hierarchical" verses "flat." While discussions of collaborative innovation often take the position that "open" networks are superior to "closed" networks, and that "flat" governance structures are superior to "hierarchical" structures, our framework provides a more nuanced view of the trade-offs. The choice among alternative collaborative modes should be driven by a number of factors including characteristics of the technology, the capabilities of the firm, and the distribution of competences in the environment. We develop a set of guidelines for helping firms choose among collaborative models and discuss critical enabling conditions required for each to work in practice. In the final section of the paper, we discuss how firms can "mix and match" multiple modes of collaboration into coherent "architectures" that lie at the heart of innovation strategy.
The Future of Social Enterprise
|Authors:||V. Kasturi Rangan, Herman B. Leonard, and Susan McDonald|
The Future of Social Enterprise considers the confluence of forces that is shaping the field of social enterprise, changing the way that funders, practitioners, scholars, and organizations measure performance. We trace a growing pool of potential funding sources to solve social problems, much of it stemming from an intergenerational transfer of wealth and new wealth from financial and high-tech entrepreneurs.
Download the paper: http://www.hbs.edu/research/pdf/08-103.pdf
A Replication Study of Alan Blinder's "How Many U.S. Jobs Might Be Offshorable?"
|Authors:||Troy Smith and Jan W. Rivkin|
In a 2007 working paper, Alan Blinder assessed the "offshorability" of hundreds of U.S. occupations and estimated that between 22% and 29% of all U.S. jobs were potentially offshorable. This note reports the results of an exercise in which members of Harvard Business School's MBA Class of 2009 collectively attempted to replicate Blinder's study. Overall, the MBA students' assessments of offshorability matched Blinder's well. Across occupations, the correlation between Blinder's offshorability rating and the students' was 0.60. The students estimated that between 21% and 42% of U.S. jobs are potentially offshorable. Echoing Blinder, the student data suggested a positive correlation between offshorability and education. The student data also revealed a positive or inverted-U relationship between offshorability and wage level, where Blinder found no correlation. While Blinder found a slight wage penalty for the most offshorable jobs, the student data exhibited no evidence of wage depreciation from job contestability due to offshoring.
Download the paper: http://www.hbs.edu/research/pdf/08-104.pdf
Cases & Course Materials
Advanced Energy: Programs for Energy Conservation
Harvard Business School Case 508-003
Describes the dilemma facing Advanced Energy (AE), a $6 million nonprofit engaged in energy conservation in North Carolina. Most of the money for its programs comes from a Public Benefits Fund (PBF) enacted by the state legislature. With renewed effort by activists in 2006 to expand AE's role, there was a possibility of the PBF swelling to $50 to $80 million. Naturally, this put AE at conflict with electric utilities wanting to engage in efficiency programs as part of their overall business offering.
The Allstate Corporation
Harvard Business School Case 708-485
In 2007, Allstate was the number two property and casualty insurer in the USA and had enjoyed five years of rapid profit improvement. The question facing CEO Thomas J. Wilson was how to maintain the momentum. This case tracks the evolution of Allstate's strategy over 20 years, examining the logic behind the strategic changes, and the challenges of implementing them. It identifies sources of inertia from within the organization and from without and summarizes the strategic issues facing Allstate in early 2007.
ATH MicroTechnologies, Inc. (A): Making the Numbers
Harvard Business School Case 108-092
An exercise that takes students through five stages of growth in an entrepreneurial start-up in the medical devices industry: 1) founding, 2) growth, 3) push to profitability, 4) refocusing process, and 5) takeover by new management. At each stage, students must confront tensions in balancing profit, growth and control. Difficulties encountered in the business are due to management's attempts to design and use formal control systems to achieve profit and performance goals.
Purchase Supplement (B):
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ATH MicroTechnologies: Making the Numbers
Harvard Business School Case 108-091
An exercise that takes students through five stages of growth in an entrepreneurial start-up in the medical devices industry: 1) founding, 2) growth, 3) push to profitability, 4) relocation process, and 5) takeover by new management. At each stage, students must confront tensions in balancing profit, growth and control. Difficulties encountered in the business are due to management's attempts to design and use formal control systems to achieve profit and performance goals.
Purchase this exercise:
Marketing Input and Innovation Strategy
Harvard Business School Note 508-090
This note develops a framework for considering the challenges of incorporating marketing input when setting innovation strategy. The framework lays out the possible innovation opportunities a firm can entertain and describes how the customer knowledge gained from conducting market research at the front end of NPD affects which of these opportunities the firm should pursue. Pitfalls in analyzing the customer data are described, along with guidelines on how to overcome them. The impact of competition in the context of setting innovation strategy under market uncertainty is also addressed.
Myths and Lessons of Modern Chinese History
Harvard Business School Case 308-065
China is an ancient civilization, but it is really a very young country. How we understand modern China is rooted in our understanding of history. Thus, the authors examine several myths surrounding important historical themes, including unity, economic and political isolation, the growth and development of capitalism, internationalization, and governance. Following the dispelling of these myths, the authors then examine several lessons of more recent Chinese history, exploring where this young country has been in its first century.
ScriptLogic®: Point, Click, Done!™
Harvard Business School Case 508-114
ScriptLogic is a software company that has built a product portfolio that fits under a 'Point, Click, Done!' umbrella; its products are easy to download, easy to install, and easy to use. The company's online marketing program and inside sales force have been very successful in finding and bringing in new customers, in part because of a laser-like focus on increasing its marketing ROI. As ScriptLogic looks towards its next phase of growth, however, it is becoming clear that some changes need to be made in order to take full advantage of its growing product portfolio. Students debate the merits of going after new customers by building an enterprise sales force or mining the existing customer base with an inside sales force that already has a lot on its plate.
Sirtris Pharmaceuticals: Living Healthier, Longer
Harvard Business School Case 808-112
Describes a set of key strategic decisions facing the scientific founder and CEO of a promising, early stage bio-pharmaceuticals company. Should the company establish a proposed alliance with a pharmaceutical firm? Should it create a nutraceuticals business in parallel to its effort to develop anti-aging therapeutics? And, should it in-license a second drug development candidate?
Harvard Business School Case 208-137
Vikram Akula, CEO of SKS Microfinance, seeks a venture capital investment to fund his firm. SKS, one of the largest and fastest growing microfinance institutions in India, is a profitable, for-profit institution with a social mission. In what is one of the first commercial financing deals in the world, Akula must decide at what value to sell equity in SKS, and to whom to sell it. The case focuses on valuation, which is difficult because at the time there are no publicly traded comparable companies, and the strategic aspects of raising money.
Suncor in the Oil Sands Industry
Harvard Business School Case 708-023
Describes the economics, technology, and politics of the oil sands industry, focusing on one of the industry's leading firms. Oil sands deposits in Alberta represent a potentially vast reserve of hydrocarbons, but the extraction, refining, and transportation challenges are formidable, and the environmental consequences of large-scare oil sands development potentially severe. Encourages students to examine Suncor's strategic positioning and cost structure, and the challenges that the firm's leaders confront as of 2007.
Taiwan Semiconductor Manufacturing Company Limited: A Global Company's China Strategy
Harvard Business School Case 308-057
After fifty-five years in the semiconductor industry, Morris Chang, founder and Chairman of Taiwan Semiconductor Manufacturing Company (TSMC), was seeing a change. After four decades of regular double-digit growth the industry was still growing-but now at a much slower pace. In 2004, TSMC entered the China market, the world's second largest for semiconductors, by building a fabrication plant in Shanghai. Was China the market opportunity in which TSMC could bet on for expansion, or should its strategy be to focus on new product development and innovation?
TD Canada Trust (A): The Green and the Red
Harvard Business School Case 108-005
The case series illustrates the role of performance measurement and analytics in translating TD-Canada Trust's service model of "comfortable banking" into operational terms. In 2000, in a banking market where consumers and regulators were typically hostile to mergers and acquisitions, Canada's fifth largest commercial bank, Toronto-Dominion Bank (TD Bank), undertook a merger with a relatively small trust company, Canada Trust, which was known for exceptional customer service. To assuage the concerns of regulators, consumer groups, and newly acquired customers, TD Bank made several public pronouncements promising to maintain Canada Trust's high customer service standards and to deliver a "comfortable banking" experience. Chris Armstrong, executive vice president and chief marketing officer, was now faced with the task of defining the comfortable banking model and consistently delivering on these promises. Armstrong and his team undertake a systematic analysis of the drivers of customer satisfaction and branch network profitability and, based on the results, must decide how to change TD-Canada Trust's branch compensation and performance reporting systems to consistently, and profitably, deliver a "comfortable banking" experience.
Purchase Supplement (B):
Purchase Supplement (C):
U.S. Subprime Mortgage Crisis: Policy Reactions
Harvard Business School Case 708-036
By March 2008, the U.S. Government and the U.S. Federal Reserve Board had taken various policy measures over the last few months to tackle the subprime mortgage crisis that threatened to drag the economy into a recession. The Bush administration approved a fiscal stimulus package exceeding $150 billion. Interest rates had been repeatedly cut at the fastest pace in decades, to 2.25% as of March 2008. The Fed, in an unprecedented move, helped JPMorgan Chase to take over Bear Stearns, which was on the brink of collapse. Yet as the global economy faced slower growth stemming from the U.S. mortgage crisis, policy makers were caught in an intense debate over what the 'right' solution would be, and the implication of these policies on global imbalances.
Where Oil-Rich Nations Are Placing Their Global Bets
|Authors:||Rawi Abdelal, Ayesha Khan, and Tarun Khanna|
|Publication:||Harvard Business Review (forthcoming)|
The combination of the gigantic American trade deficit and the price of oil at more than $130 per barrel (at press time) have created an inevitable pool of financial liquidity among oil exporters in the Arabian Gulf. But this era of petrodollar surpluses is markedly different from the last one. In the 1970s, the member states of the Gulf Cooperation Council—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—outsourced the management of their petrodollars to American and U.K. bankers. This time around, they have adopted active investment and development strategies: They are investing heavily in large Western organizations as well as in emerging markets in Africa and India. They are spending lavishly at home to establish institutional infrastructures, create free-trade zones for manufacturing and services, and build recreational facilities that will attract businesses, skilled knowledge workers, and tourists. All of this is destined to have long-run effects not just on their local economies but also on regional and international trading, argue the authors. In fact, the authors say, the actions of the GCC states are pulling the Gulf closer than it has ever been to the center of the international financial system. In this article, the authors consider how the economic landscape in the West will be affected by oil exporters' new investment strategies and interests over the next decades, how proximate emerging markets will be reshaped, and finally, how the GCC home environment itself will be dramatically reconfigured.
The Uncompromising Leader
|Authors:||Russell A. Eisenstat, Michael Beer, Nathaniel Foote, Tobias Fredberg, and Flemming Norrgren|
|Publication:||HBS Centennial Issue. Harvard Business Review 86, nos. 7/8 (July - August 2008)|
Managing the tension between performance and people is at the heart of the CEOs job. The firms they lead are at once economic organizations whose survival and prosperity depends on delivering superior value in an unforgiving global market place and social institutions that profoundly shape the lives and prospects of their employees. All too many leaders view their role through one or the other lenses, though in the strong market for corporate control that has emerged in the last twenty years shareholder value dominates. A study of CEOs in Americas and Europe selected because their companies are outperforming their competitors and also achieving commitment reveals a mindset and managerial practices discussed in this article that they employ to simultaneously solve for performance and commitment.
Interorganizational Trust, Governance Choice, and Exchange Performance
|Authors:||Ranjay Gulati and Jackson Nickerson|
|Publication:||Organization Science 19, no. 2 (March - April 2008): 1-21|
This paper looks at when and how preexisting interorganizational trust influences the choice of governance and in turn the performance of exchange relationships. We theorize that preexisting interorganizational trust complements the choice of governance mode (make, ally, or buy) and also promotes substitution effects on governance mode choice while impacting exchange performance. We evaluate hypotheses using a novel three-stage switching regression model and a sample of 222 component-sourcing arrangements of two assemblers in the automobile industry. Analysis of our data broadly supports our hypotheses. High levels of preexisting interorganizational trust increased the probability that a less formal, and thus less costly, mode of governance was chosen over a more formal one. This finding suggests a substitution effect of interorganizational trust on governance mode choice that in turn shapes exchange performance. We also found a complementary effect of trust on performance: Regardless of the governance mode chosen for an exchange, trust enhanced exchange performance. Additional evidence of the complementary effect of trust on performance was that trust somewhat reduced interorganizational conflict.
An Indian FOPSE: Innovations Case Discussion on Keggfarms
|Authors:||Daniel J. Isenberg|
|Publication:||Innovations: Technology, Governance, Globalization 3, no. 1 (winter 2008)|
I first met Vinod Kapur in the summer of 2006 when I was conducting research in India on a case for my Harvard Business School class on international entrepreneurship. A friend of mine had invited me to attend the ceremony for the first Innovations for India Awards in Mumbai. Several Indian businesspeople received the award, but I was particularly struck by a dignified silver-haired gentleman who took the stage to receive the award for social innovation. He then proceeded to eloquently describe the development of a business concept centered on the rural poor of India, which was based on a specially bred "superchicken" that was twice as big and five times as productive as the typical backyard chicken. The incongruity of Vinod Kapur's elegant appearance and his subject matter struck me as fascinating, but the most intriguing element of the presentation was how he arranged an entire system of distribution to deliver the hatched chicks to these remote villagers and did so in a way that enabled everyone to profit in concrete financial terms, from Keggfarms itself to the rural villagers. Almost a million households are today affected by Keggfarms, and the numbers are constantly rising.
Download the paper: http://www.mitpressjournals.org/doi/abs/10.1162/itgg.2008.3.1.52