- 01 Feb 2022
- Book
Innovation Isn’t Just for Startups: How Big Companies Can Succeed
Innovation doesn't have to be limited to the Teslas and Amazons of the world. In a new book, Michael Tushman and Andrew Binns share how explorers lead change and help incumbent companies strike gold. Open for comment; 0 Comments.
- 26 Mar 2019
- Working Paper Summaries
Managed Ecosystems and Translucent Institutional Logics: Engaging Communities
Organizations increasingly rely on engagement with external communities of contributors. This paper explores transitions to a managed-ecosystem governance mode and its implications for strategy and innovation. To be successful, firms must develop the capabilities to shepherd communities, leverage without exploiting them, and share intellectual property rights.
- 15 May 2017
- Working Paper Summaries
Flexing the Frame: TMT Framing and the Adoption of Non-Incremental Innovations in Incumbent Firms
Organizations continuously face decisions about whether or not to adopt innovations. Often, however, senior teams do not adopt an innovation even when the organization has the resources to do so. Using real examples, this paper theorizes how the processes of cognitive and emotional framing inform managerial choices about whether or not to adopt innovations.
- 22 Feb 2017
- Working Paper Summaries
Platforms, Open/User Innovation, and Ecosystems: A Strategic Leadership Perspective
Focusing on incumbent organizations transitioning to platform, open/user innovation, and ecosystem strategies, this analysis looks at institutional logic shifts associated with transitions to these strategies, and leadership considerations related to them. Leaders should consider how contrasting institutional logics co-exist and manage this duality including potential organizational identity challenges.
- 26 Sep 2016
- Book
Is Company Failure Inevitable?
Companies don’t generally fail because of competition; it’s out-of-touch leadership that kills them. Lead and Disrupt coauthor Michael L. Tushman discusses how companies must continue to invest in their core products while innovating in new areas. Open for comment; 0 Comments.
- 19 Dec 2013
- Working Paper Summaries
Innovating Without Information Constraints: Organizations, Communities, and Innovation When Information Costs Approach Zero
Information is expensive to process, store, and communicate. At least, this has been the prevailing assumption upon which most of our organizational theories rely. Yet we now live in a world where information is no longer prohibitively expensive. Thus there is tension between logics focused on hierarchy and control and more open and community-centric logics. This calls into question many of the assumptions underlying the strategic and organizational research that has been treated as foundational wisdom in management scholarship. In this paper, the authors explore the implications for managing innovation as information processing, storage, and communication costs approach zero. Overall, they argue that when information constraints drop dramatically and the locus of innovation shifts from residing solely within the hierarchical firm to also encompassing the larger community, there are profound challenges to the received theory of the firm and to theories of organizations and innovation. The authors conclude with thoughts for how these changes present opportunities for research on innovation and organizations. Key concepts include: The decrease in information processing costs is having a decentralizing impact on the locus of innovation and, in turn, on how organizations manage their innovation processes. The locus of innovation for incumbent firms has begun to move from residing solely within the firm to also encompassing communities beyond their full control. From a theoretical standpoint, the existing assumptions that many fundamental organizational theories are built upon may no longer be accurate portrayals of a world without information constraints. Mature organizations are struggling with new levels of interdependency and complexity as they share and engage more broadly, and struggle to manage multiple logics simultaneously. Entrepreneurial organizations are emerging with entirely new approaches to managing innovation in response to information costs approaching zero. Closed for comment; 0 Comments.
- 27 Jan 2012
- Working Paper Summaries
Discretion Within the Constraints of Opportunity: Gender Homophily and Structure in a Formal Organization
Research has demonstrated that people associate most with others who are similar to themselves, including others of the same sex. What are the implications of such patterns for organizations? This study, written by Adam M. Kleinbaum, Toby E. Stuart, and Michael L. Tushman, offers evidence of how and by whom formal lateral structures serve to link together an otherwise siloed organization. Analyzing millions of e-mail interactions among tens of thousands of employees of a single large firm, the researchers find that it is women more than men who tend to bridge formal structural boundaries in organizations. Thus women play a potentially valuable role in creating ties throughout an otherwise siloed multidivisional corporation. Despite the influence of a firm's formal organizational structure, people often have plenty of discretion to exercise choice. Same-sex interaction results from discretionary choice within the boundaries of the firm's opportunity structure. These results suggest (but do not prove) that same-sex interaction especially by woman can help to span formal organizational boundaries that are otherwise difficult to traverse. The findings raise questions for future research about whether conventional wisdoms regarding gender differences in social network structure remain accurate in current-day organizations. Key concepts include: There are significant differences in how gender interacts with organizational and geographic boundaries to influence individuals' tendency to communicate with members of their same sex. In the large company under study, men engage in same-sex interaction within the opportunity structure created by organizational structure, while women tend to connect with other women who are outside their business units and offices. It is business unit and office boundaries that most strongly influence the opportunity set of potential interaction partners for organizational actors. One of the conventional wisdoms is that same-sex interaction among marginalized people tends to reinforce the stratification of power in organizations. But these findings suggest that communication among women could serve to reinforce, not undermine, their positions in the organization. Closed for comment; 0 Comments.
- 04 Aug 2011
- Working Paper Summaries
A Dynamic Perspective on Ambidexterity: Structural Differentiation and Boundary Activities
Firms renew themselves by exploring new business models even as they exploit existing ones. But to conduct "explore and exploit" simultaneously, organizations must reconcile associated internal tensions and conflicting demands. Sebastian Raisch and Michael L. Tushman explore the shifting nature of differentiation and integration in organizations attempting to explore and exploit. Key concepts include: Whereas exploration is related to flexibility, decentralization, and loose cultures, exploitation is associated with efficiency, centralization, and tight cultures. Organizational ambidexterity is a firm's ability to simultaneously exploit and explore with equal dexterity. The paper updates the organizational ambidexterity concept by considering the underexplored roles of time, paradox, and locus. Based on a longitudinal data set of six business initiatives, the researchers find that organizations engage in a dynamic process of managing antagonistic boundary activities in order to explore and exploit. The locus of integration shifts from the corporate team to the business unit level when the new initiative gains economic and cognitive legitimacy. Closed for comment; 0 Comments.
- 18 May 2011
- Working Paper Summaries
Embracing Paradox
CEOs are often innovation cheerleaders, hoping that new ventures will eventually help reshape the industry for the better. But in tough economic times, the other senior company executives often choose to ignore innovative ventures and focus instead on the traditional core business, which reliably generate cash flow. This leads to a situation in which the CEO turns into more of a broker than a leader—trying to negotiate deals between the heads of the core units and the new units. That's a recipe for failure, according to Michael L. Tushman, Wendy K. Smith, and Andy Binns, who argue that firms can thrive only if the whole senior management team can embrace the tensions between the new and the old. In this paper, they introduce three guiding principles to help executives grow their core businesses while still nurturing their new ones. Key concepts include: Principle 1: Develop an overarching identity. The corporate identity should be broad enough to inspire both the core as well as the nascent business. Principle 2: Hold tension at the top. Innovation business units should report to the top management team. The strategic battles about old versus new businesses should be fought at the top of the corporate food chain. Principle 3: Embrace inconsistency. The senior management team needs to recognize that innovative and core businesses require very different, often inconsistent operating modes and measures of success. Still, the company must make a point of leveraging resources that are common between the new and older businesses. Closed for comment; 0 Comments.
- 22 Sep 2008
- Research & Ideas
The Silo Lives! Analyzing Coordination and Communication in Multiunit Companies
A new Harvard Business School working paper looks inside the communications "black box" of a large company to understand who talks to whom, and finds the corporate silo as impenetrable as ever. Q&A with professor Toby E. Stuart. Key concepts include: Inside the studied company, practically speaking, little interaction occurred across three major corporate boundaries: business units, organizational functions, and office locations. Communication patterns were extremely hierarchical: Executives, middle managers, and rank-and-file employees communicated extensively within their own levels, but there were far fewer cross-pay-grade interactions in the firm. Junior executives, women, and members of the salesforce were the key actors in bridging the silos. Relative to men, women participate in a greater volume of electronic and face-to-face interactions and do so with a larger and more diverse set of communication partners. Server logs can provide valuable information to managers on communication flows within their own organizations. Closed for comment; 0 Comments.
- 04 Sep 2008
- Working Paper Summaries
Wellsprings of Creation: Perturbation and the Paradox of the Highly Disciplined Organization
Many organizations struggle to balance the conflicting demands of efficiency and innovation. Organizations can become more efficient in the short run by replacing costly, unpredictable problem solving activity with consistent, streamlined routines. However, this efficiency often comes at the cost of long-run adaptability. The more organizational activity is dominated by stable routines, the less the organization learns, and the more rigid and inflexible it becomes. To escape this fate, the authors of this working paper theorize that highly disciplined organizations must actively engage in strategic and selective perturbation of established routines. A perturbation interrupts an established routine and creates an opportunity to innovate and learn. Using illustrations from Toyota, the authors investigate the conditions under which perturbations can sustain exploration in highly disciplined organizations. Key concepts include: To sustain adaptability in the long term, perturbations must occur throughout the organization. In highly disciplined organizations, adaptability depends on the active participation of organization members in inducing and interpreting perturbations. Management must trust employees to perturb processes, teach them to detect and interpret perturbations, and motivate them to do so. In the long term, business success depends as much on the commitment and knowledge of frontline employees as on strategic decision-making by senior management. Closed for comment; 0 Comments.
- 31 Jul 2008
- Working Paper Summaries
Communication (and Coordination?) in a Modern, Complex Organization
Coordination, and the communication it implies, is central to the very existence of organizations. Despite their fundamental role in the purpose of organizations, scholars have little understanding of actual interaction patterns in modern, complex, multiunit firms. To open the proverbial "black box" and begin to reveal the internal wiring of the firm, this paper presents a detailed, descriptive analysis of the network of communications among members of a large, structurally, functionally, geographically, and strategically diverse firm. The full data set comprises more than 100 million electronic mail messages and over 60 million electronic calendar entries for a sample of more 30,000 employees over a three-month period in 2006. Key concepts include: Communication is heavily constrained by formal organizational structure: the vast majority of communication occurs within business unit and functional boundaries, not across them. This points to the importance of drawing the right organizational boundaries. Women, mid- to high-level executives, and members of the executive management, sales, and marketing functions are most likely to participate in cross-group communications. These individuals provide a bridge for distant groups in a company's social structure. Closed for comment; 0 Comments.
- 31 May 2007
- Working Paper Summaries
Organizational Designs and Innovation Streams
Ambidextrous organizational designs are those that sustain current success while simultaneously building new products, services, or processes. This research looks at a sample of 13 business units and describes the relations between alternative organizational designs and innovation streams. These business units used 4 distinct organizational designs in service of innovating and improving existing products: functional, cross-functional, spinouts, and ambidextrous. The researchers also used longitudinal data in order to explore how designs evolve over time and how design transitions affect innovation success. Key concepts include: Ambidextrous organizational designs are composed of an interrelated set of competencies, cultures, incentives, and senior team roles. These designs are significantly more effective for serving innovation than are functional, cross-functional, and spinout designs. Business units that switched to an ambidextrous design improved their innovation outcomes while transitions to cross-functional or spinout designs did not. Ambidextrous designs for carrying out innovations helped the performance of existing products. Closed for comment; 0 Comments.
- 30 May 2007
- Working Paper Summaries
Ambidexterity as a Dynamic Capability: Resolving the Innovator’s Dilemma
Can organizations adapt and change—and if so, how does this occur? There are two major camps in the research on organizational change: those that argue for adaptation, and those that argue that as environments shift, inert organizations are replaced by new forms that better fit the changed context. There are data to support both arguments. This paper discusses the idea and practicality of ambidexterity and shows how the ability to simultaneously pursue emerging and mature strategies is a key element of long-term success. Key concepts include: Ambidexterity, the ability of a firm to simultaneously explore and exploit, is one solution to the innovator's dilemma as outlined by HBS professor Clayton Christensen. Under the appropriate conditions, organizations may be able to explore new avenues as well as exploit their existing capabilities. Strategic contradictions can be resolved by senior leaders who design and manage their own processes and, in turn, ambidextrous organizations. Leadership is therefore key. Closed for comment; 0 Comments.
- 22 Aug 2005
- Research & Ideas
Balancing the Future Against Today’s Needs
It's hard to dream five years out when your organization is doing all it can to take care of the here and now. This article from Harvard Management Update offers a new lens for positioning growth efforts within your company while staying focused on your core strengths today. Closed for comment; 0 Comments.
- 26 Apr 2004
- Research & Ideas
A Clear Eye for Innovation
How did a weakening contact-lens company set its sights on a series of breakthroughs? A Harvard Business Review excerpt by Charles A. O’Reilly III and HBS professor Michael L. Tushman. Closed for comment; 0 Comments.
- 16 Nov 1999
- Lessons from the Classroom
Leading Change and Organizational Renewal
A critical question confronting organizations today is not whether to change in response to their swiftly changing environment, but precisely how to manage that change. In this interview, HBS Professors Michael Tushman and Charles O'Reilly, developers of the Executive Education program Leading Change and Organizational Renewal, describe their thinking about the impact of rapid-fire change on contemporary organizations, and what managers must do to effectively lead the change process. Closed for comment; 0 Comments.
Transforming Deloitte’s Approach to Consulting
Pixel helps facilitate open talent and crowdsourcing for Deloitte Consulting client engagements. But while some of Deloitte’s principals are avid users of Pixel’s services, uptake across the organization has been slow, and in some pockets has met with deep resistance. Balaji Bondili, head of Pixel, must decide how best to grow Deloitte Consulting’s use of on-demand talent, as consulting companies and their clients face transformative change. Professor Mike Tushman discusses Deloitte’s challenges in pursuing this new approach to consulting, and what it takes to be a “corporate explorer” like Bondili in his case, “Deloitte’s Pixel: Consulting with Open Talent.” Open for comment; 0 Comments.