MGMT 460

How does the cause of success in successful companies evolve over time?

As successful companies grow, the cause of that success evolves from resources to processes to business model to culture

How should a company best manage disruptive technologies?

Give responsibility for disruptive technologies to organizations whose customers need them so that resources will flow to them -Set up a separate organization small enough to get excited by small gains -Plan for failure. Make revisions as you gather data -Don't count on breakthroughs. Find the market for the current attributes of the technology. This will be outside the mainstream. What makes the technology unattractive will be what the new market is built upon.

Soft S

Staffing, Skills, Style, shared values

Hard S

Strategy, structure, System

What is the definition and meaning of the 7-S model and each of the 7-S's?

The 7-S model is a framework that is useful in efforts to design organizations and diagnose Organizational problems -A tool for analysis and action -An Organization is effective to the extent that it is well aligned.

Strategy

The actions that an organization takes to gain a sustainable advantage over the competition. How an organization intends to create unique value

Shared values

The core or fundamental set of values that are widely shared in the organization and serve as guiding principles of what is important. These values help focus attention and provide broader sense of purpose

Skills

The distinctive competencies that reside in the organization. Distinctive competencies can be of people, management practices, systems, and/or technology. Skills can be both opportunities and constraints.

Sustaining technologies

improve the performance of their products in the ways that matter to their customers. These well managed companies, listen to customers, invest aggressively in technologies that give those customers what they say they want, seek higher margins, target larger markets rather than smaller ones.

Is size of a company an asset or a liability/disability?

-It depends on the company, could be yes or no. The big could become a disadvantage because it could become slow. -Small markets don't solve the growth needs of large companies. -To maintain share prices and create opportunities for their employees, successful companies need to grow. -Maintaining a particular growth rate requires increasing amounts of new revenue as the company get larger -Becomes difficult to enter the new, smaller markets that are destined to be the large markets of the future -To maintain growth rates, companies focus on large markets

What is the RPP framework?

A planning tool whose purpose is to ensure that all relevant research is taken into account and allied to appropriate tips and tools of influence.

Disruptive Technologies:

Change the value proposition in a market Lower margins, not high profit Initially, offer lower performance in attributes that mainstream customers care about Most profitable customers can't use and don't want them Have other attributes that a few fringe (new) customers value Typically, cheaper, smaller, simpler, and more convenient to use Open new, smaller markets Eventually, disruptive technologies' performance improves until it is "good enough" to take over older, larger, mainstream markets

What is the difference between the "hard S's" and the "soft S's"?

Hard S's" (strategy, structure, systems) may be easier to change than "Soft S's" (staffing, skills, style, shared values)

Example of disruptive technologies:

Honda disrupting the US motorcycle market Bell telephone disrupting Western Union telegraphs Black & Decker disrupted professional tool manufacturers Boxed beef from IBP disrupted butcher shops Canon and Ricoh photocopiers disrupted Xerox professional copiers Sears and Montgomery Ward catalogs disrupted full-service department stores Walmart disrupted Sears and Montgomery Ward Cell phones disrupting wirelines

What is the relationship between incumbent leaders in an industry and success with sustaining and disruptive technologies?

Incumbent always win battle with sustaining technologies and lose battle with disruptive technologies.

System

The formal processes and procedures used to manage the organization, including the management control systems, performance measurement systems, reward systems, planning, budgeting, resource allocation, distribution, and information systems.

-Style

The leadership style of top management and the overall operating style of the organization Style impacts the norms people follow and how they work and interact with each other and with customers. Style captures how work actually gets done in the organization (meetings vs. walking around, analytic decisions vs. armchair, etc.)

Staffing

The people, their backgrounds, and competencies. The organization's approaches to recruitment, selection, socialization. The way that people are developed, trained, socialized, integrated, and their careers managed.

Structure

The way in which tasks and people are specialized and divided, and authority is distributed. The key purpose of structure is to focus people's attention on what needs to get done.

What is the "best" way to organize?

There is no single BEST way to organize

Heavyweight team

o Addresses changes required in "architecture" or processes o Creates new processes o Best when there are unpredictable interdependencies o Members of team are generally co-located o Team members bring functional expertise but loyalty lies with team rather than function o Team members report FIRST to "heavyweight" project manager

Functional team

o Addresses changes required in "resources" o Uses existing processes o Best when there are no group interdependencies (the work can be completely specified in advance)

Lightweight team

o Addresses changes required in "resources" o Uses existing processes o Best when there is predictable interdependence o Because what one person does affects another's work, a project manager usually coordinates o Primary work and responsibility remains within functional unit

autonomous business units

o Best when tackling a disruptive business model innovation o Existing business units will never prioritize a "disruptive" project/product o Creates a new business model for a new targeted market o Do NOT need to be geographically separate or have different ownership o Must have freedom to create new processes and priorities (models) o Must have freedom to compete with and cannibalize sister divisions

-Processes

▫ Inputs of resources are transformed into products and services of greater worth through processes ▫ Patterns of interaction, coordination, communication, and decision making ▫ Formal and informal processes ▫ Processes emerge as a response to specific recurrent tasks ▫ If task changes, the process may change from a capability to a disability ▫ Processes are generally NOT flexible ▫ Background processes may be most important when dealing with disruptive-growth businesses

-Priorities

▫ Making decisions that are consistent with the business or profit model of the company ▫ Priorities often are determined by "constraints" • Acceptable gross margins • Acceptable size of new market opportunities ▫ Huge size of company may become disability in creating new-growth businesses

-Resources

▫ Things that can be hired and fired, bought and sold, depreciated or built such as people, equipment, technology, designs, brands, information, cash, and relationships with customers and suppliers ▫ Most resources are visible and can be measured ▫ Resources tend to be "flexible" and can be transported across organizational boundaries