The Office of the Future

Xerox produced a video of their view of the office of the future in the 1970s:

The impact of information technology on the office has been a topic of interest for many years. Vannevar Bush first wrote about it in 1945 when he argued that machines could function as an extension to human memory and he proposed a machine that he called a Memex. The following animation describes Bush’s ideas, which he had illustrated with his own drawings:

Bush’s ideas were implemented at Stanford in 1967 with the creation of the “Augmented Human Intellect System” – probably the first attempt to create a personal computer. Work occurred in other areas too. Xerox created a machine that they called a Dynabook (an early version of a tablet) that was intended to be used for personal writing and other creativity.

In 1994 Sun Microsystems produced a video that anticipated the role that information technology would play in the future workspace. They called that technology “Starfire”:

Finally, IBM created a model of the modern office space that they called Bluespace in 2002.

These early attempts to imagine the future use of information technology in the modern office were often accurate and we can see many of the tools that were imagined in the past existing in today’s offices. Discussion today on the office of the future considers many areas. Some look at building construction and how information and other technologies can make buildings more environmentally suitable. Others argue that modern office buildings will disappear as technology allows more people to work from home or other locations. Mobile office locations currently exist that allow people to work in a variety of locations around the world. Flexible offices allow adaptation for different requirements, ranging from meeting spaces to cubicles. New material technologies allow information technology to be used in new ways, especially in collaboration which is becoming an increasingly important part of the modern organisation.

The impact that inofrmation technology will have on organisational productivity is also being considered as is its potential impact on the wellness of employees. Expectations of the millennial generation and the needs of the aging boomers are also influencing the use of information technology in offices. Examples are provided at the end of this blog post.

Siemens have created videos of their approach to modern office buildings. They especially focus on the opportunities for energy management, using technology to manage energy consumption to take into account electricity tarriffs that vary throughout the day. They illustrate how technology can be used in building security, flexibility, efficiency and comfort and argue that there will be additional benefits from the synergy of these factors.

The first video from Siemens focuses on smart use of energy while the second takes a broader view:

Some argue that we are likely to see alot less office buildings in the future due to the growth of teleworking. Many benefits are argued to result including the elimination of commuting time, increased flexibility of working hours, a better work life balance and a positive impact on the environment. Some also express concerns about the ability to effectively manage people at a distance, the use of personal employee resources when working at home that are not reimbursed by the employer and the difficulties in switching off from work when the office is in the home. Cisco supply technologies to support teleworking:

Mobile space, or office space that can be used on a temporary basis, is also facilitated by information technology. The following example is from a company called Intelligent Office that has a network of temporary offices in many cities globally:

Flexible offices enable office space configurations to be easily changed as organisational needs change. The following video, from Carnegie Mellon illustrates how this can work:

New material technologies are also being used. The following video from Corning Glass shows how new touch sensitive surfaces may be used:

Collaboration is now recogniksed as being an increasingly important part of modern business, partly as a result of globalisation that requires people to work closely with each other around the world. More people are working in teams and the pace of change is faster than ever before. Information technology enables people to collaborate more effectively within offices and remotely. Microsoft illustrate this:

Productivity is impacted by information technology in many ways. Two thirds of people beleive that conventional office environments stifle creativity and many organisations are looking at ways that technology can support a more positive workplace. The following video illustrates some areas that technology will influence productivity:

Offices have a direct impact on the health of employees. Information technology allows the office environment to be better managed with control of lighting, heating and cooling, air quality, noise etc, being possible.

The workplace is also being impacted by generational change. Generation Y is entering the workplace with expectations of flexibility and better working conditions. The boomers are getting older and looking for work on a part-time, more flexible basis. As the boomers age, organisations are competing with each other to recruit a shrinking population of working age. These pressures are changing the workplace and information technology is enabling that. The following video describes the workforce of tomorrow:

While this video discusses the impact of the Millennials or Generation Y:

Finally, here are three examples of organisations that have adopted elements of the office building of the future. Accenture have a very flexible office space in Houston:

Manitoba Hydro have built a world leading energy efficient building:

Glumac are a Californian engineering company that specialises in environmentally friendly offices:

Finally, the office of the future was researched as part of the Living Tomorrow project in Belgium – these were their conclusions:

Marketing and Social Media

Social media is transforming marketing in most organisations. Philip Kotler is respected as one of the leaders in thinking about marketing today and he provides an introduction to marketing strategy in this video:

This week we consider the impact of information technology on marketing and in particular the impact of social media. We look at how social media is transforming influence, how that has progressed over time. Statistics from com.score.com provide details on what is happening with social media today. Canada are among the heaviest users of social media in the world. The Social Media Marketing Report is examined which reports the attitudes of organisations to social media. Mobile and video are growing rapidly at present and these are discussed. Finally, social media disasters are used to illustrate the potential negative impact of social media if it is managed badly.

The following chart, from trendstream and Universal McCann, describes the transformation that social media has brought to the business world. It describes three media ages. In the pre media age consumer influence could be through face to face discussions or through talking to a seller. In the mass media age, people could talk face to face, through phone calls, they could talk with a shop worker, consult professionals, write letters to the media or phone in to TV and radio.

In the social media age, the range of opportunities for influence by the individual consumer is extensive and is listed in the chart. This has created a radically different environment than has existed in the past and companies are considering how they should deal with this. The following video introduces social media:

comScore.com reports on global trends in internet usage. Its reports are based on the analysis of real internet traffic and they show changes in the use of social media over time, in reports produced annually. Recently they have reported that the use of video is increasing quickly:

In their 2013 report on Canadian activity comScore say that Canada continues to lead the world in online engagement with visitors spending an average of 41 hours per month online, creating opportunities for digital marketers.

Facebook appears to be reaching saturation point in Canada, while other social media tools, such as Twitter and LinkedIn, are growing strongly. In Canada, as elsewhere, online video is growing rapidly. Entertainment is the fastest growing content category..

Display advertising is more social through advertising on social media sites and the increase in use of socially enabled ads that allow users to click through to a social media tool. 45 percent of people in Canada have a smartphone and mobile content usage is growing quickly. The impact of social media on marketing globally is revolutionary:

The Social Media Marketing Report reports on the views of social media marketers and has been conducted annually for the past four years. It’s 2014 report highlights the following

  • Marketers place very high value on social media: A significant 92% of marketers indicate that social media is important for their business, up from 86% in 2013.
  • Tactics and engagement are top areas marketers want to master: At least 89% of marketers want to know the most effective social tactics and the best ways to engage their audience with social media.
  • Blogging holds the top spot for future plans: A significant 68% of marketers plan on increasing their use of blogging, making it the top area marketers will invest in for 2014.
  • Marketers want to learn most about Google+: While 54% of marketers are using Google+, 65% want to learn more about it and 61% plan on increasing Google+ activities in 2014.
  • odcasting on growth trajectory: Only 6% of marketers are involved with podcasting, yet 21% plan on increasing their podcasting activities in 2014—a more than three-fold increase—and 28% of marketers want to learn more about it
  • Facebook and LinkedIn are the two most important social networks for marketers. When forced to only select one platform, 54% of marketers selected Facebook, followed by LinkedIn at 17%.
  • Most marketers aren’t sure their Facebook marketing is effective: Only 34% of marketers (slightly more than one in three) think that their Facebook efforts are effective.
  • Original written content is most important for social media marketing: A significant 58% of marketers stated that original written content is the single most important form of content, followed by original visual assets (19%).

Growth is also taking place in mobile technology, with increasingly advanced devices and more and more apps available. Tablets are growing in the market and there is increasing use of mobile broadband, enabled by unlimited data usage plans.

The following video from Rogers takes a look at information technology usage in Canada:

Social Media Disasters

As social media usage in marketing has grown, knowledge of its effective use has been imperfect and this has resulted in some embarrassing and sometimes humourous episodes.

Price Chopper, a US supermarket, tried to silence one of their critics with negative results:

A number of celebrities supported a campaign based on their fans paying money to charity to resurrect them from “digital death” which embarrassingly failed to attract significant interest:

Groupon’s Superbowl ads were widely recognised as being in bad taste and quickly withdrawn:

Groupon Rainforest:

Groupon Tibet:

Groupon Whales

Meanwhile Kenneth Cole’s tweet about the demonstrations in Cairo was widely criticised:

This week we have looked at how social media is transforming marketing. We looked at the statistics on changing tends in social media usage. Canada’s leading role in this area was identified and the Social Media Marketing report looked at how marketers view social media today. We considered video and mobile social media, areas of rapid growth today. Finally, we looked at social media disasters.

Further content on the use of Social Media in Business Performance is available on the website that supports my course on this topic:

SMBP

Information Technology and the Supply Chain

This week we look at how information technology is impacting the supply chain:

We will first discuss what supply chain management is and then consider two approaches to supply chain strategy. We will look at the impact of supply chain information technology and in particular the value of and issues with supply chain collaboration. Finally we look at supply chain and trust. Supply chain focuses on how organisations (suppliers, manufacturers, distributors and customers are linked together. The following graphic illustrates:

Martin Christopher of the Cranfield School of Management defines supply chain management as:

“planning and coordinating the materials flow from source to user as an integrated system rather than, as was so often the case in the past, managing the goods flow as a series of independent activities… the goal is to link the marketplace, the distribution network, the manufacturing process and the procurement activity in such a way that customers are serviced at higher levels and yet at lower cost. In other words to achieve the goal of competitive advantage through both cost reduction and service enhancement.”

Modern supply chain strategies arise from study of the Japanese approach to supply chain. This features close relationships across the supply chain and collaboration to maximise supply chain performance. This is in contrast with previous approaches that sought simply to minimise cost. Now it is recognised that cooperation that focuses on the overall performance of the whole supply chain enables higher levels of performance to be achieved.

The new approach requires a willingnes to share supply chain information between organisations and is often facilitated by internet based technologies.

The Hitachi Consulting company states that the following tends are evident in supply chain managementy today:

Demand planning: Working to influence demand so that it aligns with productive capacity.

Globalisation: Increasingly global supply chains with emphasis on the issues involved with working on a global level.

Increased competition and price pressures: Brought about by global competition and economic recession.

Outsourcing: Sourcing of products and services from outside the firm, often in lower wage economies.

Shortened and more complex product life cycles: Increased competition is leading to products with shorter life cycles and this increase supply chain complexity.

Closer integration and collaboration with suppliers: Necessary in this faster moving, global environment.

The Bullwhip Effect

The Bullwhip effect theory is another argument for supply chain collaboration. It is based on the amplification of the impact of a changes in customer buying behaviour as it moves up the supply chain, as suppliers attempt to respond to the changes in customer orders. The following graphic illustrates the bullwhip effect:

While the following video, with Professor Hau Lee, explains it further:

IT and the Supply Chain

In 1990 Michael Hammer wrote about the transformative role that IT would have in organisations through the use of Business Process Engineering. The following video introduces IT and supply chain:

According to Hammer, only 10 % of all major corporations have used IT to transform their value creation process. He says that their IT efforts had a focus on the technology and not on its impact on business processes. Information technology allows information to be shared across the supply chain and for activity to be coordinated. Today, many companies do this, with frequently used examples including Amazon, Dell, Honda, Procter and Gamble and Walmart.

Supply chain technologies focus on a number of areas including:

Network and inventory optimisation

Product life cycle management

Sales and operations planning

Manufacturing optimisation

Logistics optimisation

RFID (Radio frequency identity devices)

Procurement

Business intelligence

The following video describes RFID and raises some, at times irrational, concerns:

Supply Chain Collaboration

Supply chain collaboration involves a number of elements. It requires sharing of information between supply chain partners, congruence of goals across the supply chain, synchronisation of decision making, alignment of incentives and sharing of resources. Collaborative communication is required to facilitate this along with the creation of joint knowledge. Professor Richard Wilding discusses supply chain collaboration:

The sharing of supply chain information can lead to stronger supplier performance, better supply chain relationships and new forms of collaboration. Performance improvements are seen in lower costs, faster new product development, shorter order fulfillment lead times and greater flexibility and agility in the supply chain.

Thus far collaboration has proved difficult for many organisations. In the following video Mark Williams talks to Supply Chain Brain about the current state of supply chain collaboration:

Many companies have struggled with the application of information technology to supply chain. It is argued that this is due to their focus on the technology and not its operational impact. It is not simply the application of technology that is important but rather, how it is used. So, investment in technology is not enough. The following chart illustrates a process for exploiting IT investments for collaborative advantage:

Supply chain collaboration faces many barriers. Organisations have traditionally operated in separate organisational functional silos with turf guarded carefully – collaboration breaks this down and creates insecurity. Poorly aligned goals and measures discourage cooperation and a general lack of trust between supply chain partners based on past traditional relationships is often evident. Managerial support for collaboration can be weak for these reasons.

Trust

Trust is critical to supply chain collaboration. There are two types of trust. Affective trust is based on emotion and on the personality of the person being trusted. Trust in competency is based on competence and rationality. Both of these types of trust are important in benefit / risk sharing. More trust will mean more sharing.

Affective trust is more important in information sharing – do you believe that the other person will respect the confidentiality of the information?

Competency is more important in joint decision making which is important in developing the effiiciency of the supply chain. Do you beleive that sharing your information in joint decision making will actually result in improvement? So, organisations need to ensure that people in joint decision making roles are competent. The following video argues for the importance of trust:

Conclusion

This week we have looked at the application of information technology to the supply chain. It has been argued that supply chain performance can be improved with technology if its use is consistent with a modern supply chain approach. Collaboration is critical to achieving performce improvement and it requires trust to work.

Operations and Technology

Over the past 30 years information technology has had an increasing presence in the operational side of most businesses. At the same time, approaches to the organisation of work and the management of people have changed and developed. Debate exists today around the role that information should play in operations. Some argue that IT can have a significant impact on operations while others argue that IT is being over used and that the focus should be on simplification.

This post traces the history of approaches to operations management and the role that information technology might play in these. Scientific management, human relations and socio technical systems are outlined. More recent approaches in lean operations and enterprise resources planning are considered, particularly the debate over the pursuance of a lean strategy and the role (if any) for ERP within this. The role that information technology takes in operations will depend on the overall operations strategy adopted. This will be influenced by beliefs about the motivation of people at work.

Scientific management and the human relations school were explained in the previous post.  In 1979 the United Nations’ International Labour Organisation described scientific management as:

“Under this system the operative is regarded as a person of a very low intellectual and educational level, a waster with an innate tendency towards low output, needing regular pacing to overcome habitual apathy, and requiring close supervision, but capable of positive motivation through payment by results.”

The human relations school was critical of scientific management and McGregor’s theory X and theory Y questioned the model of employee motivation that scientific management was based on:

Socio technical systems also emerged as an approach to operations in the 1950s. They expanded on human relations theory, arguing that it was too narrow. They argued that the human relations school assumed that the use of technology in operations was fixed and that activity to improve worker motivation could not change this. The socio technical school argued that work is a combination of social and technical systems and that both had to be optimised together to create a work environment that would maximise employee motivation and operational performance. The design of manufacturing environments should take both into account.

Many companies adopted a socio technical systems approach. Volvo, in their plants in Kalmar and Uddevalla in Sweden and, more recently, General Motors’ Saturn plant in the US were examples of this. Research evidence of the performance of socio technical systems vs. other manufacturing approaches is inconclusive – we don’t know if the socio technical approach produces better performing operations. The following video describes the use of socio technical systems by Volvo:

By the mid 1980’s there was a recognition that North American and European manufacturing performance was falling significantly behind that in Japan. Womack, Jones and Roos researched this and in 1990 published their very influential book, The Machine That Changed the World. Their research quantified the gap: 

Study of Japanese manufacturing identified a new approach to operations – Lean Manufacturing which was argued to be the reason for the gap. North American and European companies were urged to adopt this lean approach.

Writing in 1987, Voss described lean manufacturing as:

    “a disciplined approach to improving overall productivity and eliminating waste. It provides for the cost effective production and delivery of only the necessary quantity of parts at the right quality, at the right time and place, while using a minimum amount of facilities, equipment, materials and human resources.”

and argued that it required:

“total employee involvement and teamwork”

The main elements of a lean approach were described by Bhasin and Burcher in 2006 who argued that a lean approach was a new philosophy of operations management that had the following elements:

•Decisions at the lowest level
•Clarity of lean vision
•Strategy of change
•Clear responsibilities
•Supplier relationships based on trust and commitment
•Learning environment
•Focus on customer
•Lean leadership and metrics
•Maintain challenge of existing processes
•Maximise stability
•Assess fraction of employees operating under lean conditions
•Long term commitment

The following video provides a good introduction to lean operations:

Toyota are seen as one of the leaders in lean:

Lean has now been applied beyond the manufacturing environment, in most other parts of the economy. In service industries it has featured the introduction of problem solving groups, upgrades to housekeeping and quality, clarification of process flows, changes to equipment and process technologies etc. The following video looks at lean in an office environment:

The Lean Enterprise Research Centre at the University of Cardiff in Wales looks at how lean is applied in a variety of sectors:

Information technology has been applied in operations increasingly over the past thirty years. It has been applied in operational equipment and in more recent years information technology has been used to integrate operations. Computer integrated manufacturing focused particularly on the application of information technology to processing equipment:

Enterprise resources planning is described by PC World as:

“An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ERP modules may be able to interface with an organization’s own software with varying degrees of effort, and, depending on the software, ERP modules may be alterable via the vendor’s proprietary tools as well as proprietary or standard programming languages.

“An ERP system can include software for manufacturing, order entry, accounts receivable and payable, general ledger, purchasing, warehousing, transportation and human resources. The major ERP vendors are SAP, Oracle (PeopleSoft and J.D. Edwards), SSA Global (Baan) and Microsoft.”

The following video describes ERP:

The following grahic illustrates the latest generation of ERP that focuses on total integration of business processes:

There is debate about enterprise resources planning technology and lean operations. Some argue that a lean approach is not compatible with ERP. Lean focuses on simplifying processes and using shopfloor level visibility to control process flow.  ERP is based on using information technology to manage shopfloor activity and a wide range of other functions which is argued to work against the lean approach. They point especially to the use of pull systems of process flow in lean and push systems in ERP, as the following graphic illustrates:

Others argue that ERP is more appropriate than lean in managing operations. They accept that the approaches are incompatible and assert that ERP will produce better results.

A third group argue that a blended approach is possible with lean being used to control shopfloor operations and ERP being used to manage areas and activities beyond the shopfloor. The following graphic illustrates this:

The following video discusses the relationship between ERP and Lean:

This post has discussed the development of approaches to operations in organisations. A historical view is taken of this so that the progression of approaches that has led to current practices can be understood. Debate continues today on the approach that should be taken – that debate implies beliefs in human motivation.

People and Technological Change

People in organisations today often experience efforts to achieve change:

Today’s managers are usually expected to achieve change that will improve the performance of their organisations but this has not always been the case:

The following video provides a short introduction to change management:

In this week of the course we look at people’s motivation at work and the different approaches that might be taken to their management based on beliefs about their motivation. We will look at the two major theories of the management of change: organisational development and emergent theory. Leadership is often argued to be a critical element in successful change management and we will explore the concept of transformational leadership. Finally we will examine how people’s working lives are impacted by information technology with an interview with Caroline Axtell from the University of Sheffield.

Theory X and Theory Y

Douglas McGregor developed Theory X and Theory Y in 1960. It is a theory of approaches to managing people.

In the early 20th century the theory of scientific management was developed. Henry Ford and Frederick Taylor were key exponents of the theory which emphasised the division of planning and execution of work and the specialisation of jobs. In this model organisations featured a small number of people with a high level of skill and a large number of people with a small amount of skill. The role of managers was more clearly defined in this model and work methods were carefully studied and developed to maximise their effieciency. The following video explains scientific management:

By the second half of the 20th century scientific management was being questioned. Hackman and Lawler, writing in 1971, described it as:

“The general expectation of the scientific management approach was that by simplifying jobs, work could be carried out more efficiently, less skilled employees would be required; the control of management over production would be increased; and, ultimately, organisational profits would be increased.”

The Human Relations school argued that scientific management led to sub optimal performance, that it was not the best way to organise work. They argued that jobs should be designed to improve employee motivation, satisfaction and performance. McGregor’s Theory X and Theory Y is part of that approach. Now often seen as overly simplified, its value is in questioning the beleifs about human motivation that lie behind different approaches to work organisation and management. Theory X managers beleive that most people are lazy while Theory Y managers take a more positive view:

Why Does Change Fail and What Can We Do About It?

Statistics suggest that change fails on a regular basis – some studies suggest that as many as 90 % of change initiatives fail. Studies of reasons for change failure are weak and generally say that failure is due to weaknesses in planning or execution or due to lack of competence or commitment.

A recent study by the McKinsey consulting organisation of 3199 global executives found that only one third had achieved a significant improvement in their corporate performance. Those that did set high and clear expectations for their subordinates, engaged the company as whole in the change activity. were highly visible and involved their Chief Executive Officer, engaged in more communication and had good accountability methods. They built on success rather than focused on problems. The following video looks at why change often failes:

Many authors have written about approaches that might be taken to successful change – arguing that they have the one best way. Kanter et al (2009) described 10 commandments for successful change, Pugh (1993) proposed four principles of change while Kotter developed an eight step model in 1996. Many organisations have adopted one of these approaches.

Theory of change has two main themes, organisation development and emergent change. Organisation development approaches seek to carefully plan change in an organisation. They view organisations as integrated systems and plan to change in the system as a whole. They see change as being managed by senior management and requiring support throughout the organisation and being designed to impact organisational performance by aligning organisational systems and people. Organisational development is based on behavioural science knowledge – research that seeks to understand the behaviour of people and organisations.

The following video describes the problems with old approaches to change management:

While this video describes the benefits of a new participative approach:

Emergent theories of change argue that change in organisations does not usually happen in an organised way – it is often less formally controlled, It argues that everyone in the organisation can potentially cause change and good communications can make change easier. Change, it argues, is based on interactions inside the organisation. While leadership still exists in organisations it does not control everything. McGill University’s Henry Mintzberg is strongly identified with this approach:

Types of Change

Three types of organisational change are usually discussed: developmental, transitional and transformational.

Developmental change is focused on the improvement of existing aspects of an organisation. It is typically smaller scale change.

Transitional change  is designed to move the organisation from on state to another. It is usually planned and large scale and most organisational change literature is focused on this type of change.

Transformational change is fundamental – it transforms the organisation so that processes, culture, strategy etc. may be radically different from what they were before the change.

Transformational Leadership

Transformational leadership that can have a radical impact on an organisation is said to require four elements from leaders:

1. Be a role model and respected in the organisation.

2. Inspire and motivate others

3. Have genuine concern for the needs and feelings of followers

4. Challenge followers to be innovative and creative

The literature argues that transformational leadership results in organisations with higher levels of performance and employee satisfaction than other groups. They hold positive expectations of their followers and inspire and empower people to perform at a higher level.

This article further explains transformational leadership and provides a test to assess your transformational leadership capabilities.

Interview With Caroline Axtell

The following interview is with Dr. Caroline Axtell, who researches the impact of technology on people at work.

Part One:

Part Two

Part Three

This post has looked at people and change in organisations.. It considered the approach that managers take to thepeople they manage ith McGregor’s theory X and theory Y. It looked at approaches to managing change and how change happens in organisations with organisation development and emergent theory. We discussed transformational leadership and looked at people and information technology with Caroline Axtell.

Technology Strategy and Innovation

3M is seen as one of the world’s most innovative companies:

Innovation is defined in the following video by participants in the 2010 Lisbon Council:

One of the main theories of innovation is Diffusion of Innovations Theory. It argues that innovations are communicated through channels over time and within a particular social system. People have varying degrees of willingness to adopt innovations – the theory categorises people as follows:

–innovators – venturesome, educated, multiple info sources
–early adopters – social leaders, popular, educated
–early majority – deliberate, many informal social contacts
–late majority – skeptical, traditional, lower socio-economic status
–laggards – neighbours and friends are main info sources, fear of debt
 
The following video explains Roger’s Diffusion of Innovation theory:
 
 
This is also illustrated in the following chart – over time adoption of technology moves from the early adopters to the wider population:
 
Some innovations will be more successful than others and the next chart illustrates the Information Systems Diffusion Variance model. It argies that IS implementation success is as a result of three factors; technical compatibility, ease of use and how much people perceive that they need the product:
 
Disruptive innovation is innovation that helps create a new market and value network. It will disrupt existing markets and displace earlier technology.
 
 
Typically disruptive innovations are not expected by the market. Clayton Christiansen describes disruptive innovation:
 
“Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put together in a product architecture that was often simpler than prior approaches. They offered less of what customers in established markets wanted and so could rarely be initially employed there. They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream”
 
 
The next chart shows the impact of disruptive innovation – first appearing in low quality use areas and accelerating upwards.

The second type of innovation is known as sustaining innovation, It does not create new markets or value networks, evolving existing markets with better value. Typically, companies compete with each others sustaining improvements. Sustaining improvements can be discontinuous or continuous. Christiansen and Raynor describe sustaining innovation in their book “The Innovators Solution”:
 

“A sustaining innovation targets demanding high-end customers with better performance than was previously available… The established competitors almost always win the battles of sustaining technology. Because this strategy entails making a better product that they can sell for higher profit margins to their best customers, the established competitors have powerful motivations to fight sustaining battles. And they have the resources to win.”

The next video discusses the distinction between sustaining and disruptive innovation:

Many people are critical of our innovation record in Canada. They note that Canada has only 1.36 % of global patents while the US has 30 %. In 2009 the Conference Board of Canada gave Canada a “D” for innovation. It is argued that we are bad at turning science into products and that we have a low appetite for risk and that this pervades our culture, private sector, government, financial institutions and education. It impacts our standard of living. Successive governments have sought to encourage companies to invest in innovation but private sector research and development has declined in the recession. Universities are criticised too though the University of Waterloo is lauded for its policy that allows researchers to own the products that they create.

Michael Bloom from the Conference Board discusses the contribution that education and skills development can make to innovation:

Various studies illustrate Canada’s innovation record and rank us versus other nations. The following study from INSEAD, the Global Innovation Index rankings places Canada in 8th place:

PWC argue that government in Canada needs to do more to encourage innovation:

The Coalition for Action on Innovation in Canada, chaired by John Manley, a former government minister, presents a ten point point plan for innovation in Canada:

1. Make R&D tax credits open to public companies and businesses that lose money.

2. Create government-sponsored “co-investment funds” with private investors to finance emerging companies.

3. Adopt the world’s strongest intellectual property regime.

4. Launch pilot partnerships between retired entrepreneur coaches and startups.

5. Enlist more retired executives to help the government dole out R&D funds.

6. Use the federal government’s buying power to spur adoption of new products and services.

7. Set a national target of a 90-per-cent high-school graduation rate and boost master’s and doctoral graduates.

8. Help foreign graduate students gain permanent immigration status.

9. Form a national network to share know-how among existing clusters of innovative companies and industries.

10. Create an independent advocacy group to push innovation by Canadian companies.

Charles Leadbetter has advised the UK government on innovation policy and argues that the internet has changed how innovation will happen – he calls it “We think”:

In a recent TED talk, Leadbetter expands on this theory:

Work has also been undertaken by the Conference Board on the skills that are thought to be required for innovation. They say that we need research that generates new ways of thinking and new knowledge, the ability to apply knowledge and skills, adopt new technologies and processes and adapt to change. The literature is relatively weak in this area and some argue that it is likely to depend on specific industries. The Conference Board’s Innovation Skills Profile details their thoughts on the skills needed for innovation:

The following video asks the question “Where do good ideas come from?” and explores how new ideas develop:

One Million Acts of Innovation is a Canadian organisation that seeks to encourage Canadian organisations to innovate. The following video is an interview with one of their founders, Taimour Zaman:

Finally, Charles Leadbetter undertook a global project to examine innovation in education. The following video provides examples of what we might see in the future:

Putting Technology Into Corporate Planning

Corporate planning allows organisations to review and analyse their current position, examining their internal activities and their external environment. It allows them to create a Strategic Plan which outlines their key business objectives and goals over time and their actions to achieve them. In this video Erica Olsen describes what Strategic Planning is:

Information technology has been increasing in its importance in corporate strategy in many organisations. John Pickett, Principal with the IT Media Group and an experienced and respected IT community advocate, was interviewed for students of the University of Waterloo’s course in the Strategic Management of Technology. John spoke about the relationship between information technology and the business:

This article discusses strategic analysis and strategic planning, highlighting the importance of the careful development of corporate strategy for business success. Strategic analysis develops understanding of where the business is now. Most large businesses frequently evaluate their position and strategic analysis has many methods to assess their current position.  Erica Olsen provides an overview of the typical strategic planning process. A version of this is used by most successful organisations:

There are two types of strategic analysis, external and internal. Audits are used to establish where the business is now. Internal audits use data and information from within the business. Often an outside consultant will be used for this to gain an independent view. External audits use data and information from outside the business analysing areas that will sometimes be outside of the control of the business. The analysis undertaken will influence business decision making.

Internal audits may consider many factors. Productivity of human resources and capital, efficiency using ratio analysis, investment data etc, costs, looking at wastage of resources and opportunities for cost cutting may all be examined, Internal data such as labour turnover, absenteeism, customer satisfaction surveys, quality statisitics, financial data, sales trends and skills audits can all be used. SWOT (Strengths Weaknesses Opportunities and Threats) analysis is used by many organisations. Core competencies are considered to determine what the business is good at. The following video explains the conduct of SWOT analysis:

The following video emphasises the need for consistency in pursuit of a coherent strategic direction and argues that there are only three strategic options for organisations and that a failure to select and focus on one will cause organisations to be “mediocre”:

External audits consider the environment that the business operates in. They might look at inflation, competitiveness, unemployment, growth and consumer spending. They will usually look at competitors with the business, what they are doing and what threats they may provide.

Analysis of PEST factors (Political, Economic, Social and Technological) can feature in external audits and is explained in the following video:

and this is an example of PEST analysis as applied to the music industry:

Exdternal audits will also consider changes in the market for the products or services that the business produces. Is the market growing, stagnant or declining. Is the market share of the business changing? Is future growth possible or is the business at the mature stage. What are the market trends – are there new fashions or potential new market opportunities that the business needs to be aware of? The Boston Matrix is often used to analyse products:

Gaps may exist where there is a market that is not being served.

Strategic planning considers where the business will go in the future, often over a ten year period. Some businesses look further than ten years. Some Japanese companies have strategic plans that look at a one hundred year period. However, not all businesses have strategic plans. Some do not beleive that strategic planning is a worthwhile use of time, but these are a minority. Most businesses executives understand that having a clear strategy that is understood throughout the organisation will guide basic principles for working and making operational day to day decisions.

Strategic planning seeks to identify areas of competitive advantage. It looks at ways to add value to an organisation, considering whether businesses should focus on mass or niche markets, whether a cost based strategy should be used, reducing costs to compete and grow and / or a market based strategy, focused on satisfying consumer needs to create increased demand for the business’ products or services.

Strategic planning will often also include contingency planning – strategies in case things don’t go as planned and growth plans that will look at how the business will grow in the future.

Blackberry are currently enduring difficult times and provide a useful example of the application and importance of strategic decisions. Blackberry was once valued more than the Royal Bank of Canada but it has declined rapidly over the past few years:

BB Share Price

The reasons for Blackberry’s difficulties are outlined in this interview with a journalist from the Wall Street Journal:

The Globe and Mail suggested a couple of years ago that Blackberry had five possible options:

1. Sell the company

2. Break it up

3. Find a partner

4. Become a niche company

5. Stay the course

and their possible options today are summarised in this news item from Global News:

Recently, John Chen, the Blackberry CEO, was interviewed about their turnaround strategy. The interview provided details of elements of their strategic plan and is a good example of strategic plan implementation in practice:

This article has described the strategic planning process that most organisations use today. It has introduced some of the common tools that are used as part of that process and an example of strategic plan implementation in the strategy for the turnaround of Blackberry. It should provide engineers and technologists with awareness of the processes that will be used in the organisations in which they work and help them to participate to ensure that technology plays a valued role in corporate strategy.

 

 

Introduction

This blog supports the course MSci 421 at the University of Waterloo in Ontario, Canada. The official description of the course is:

A critical examination of the conceptual foundation of the strategic management of technology and innovation in established firms. Foundations in strategic management, economics, and organization theory. Contents: technology strategy, technology evolution, standards, learning curve, technology races, first-mover advantages, technology sourcing.

As students complete the course they work on real world projects that apply information technology to business issues. In the 2012 edition of the course the students worked on the design of an information technology enabled condo for a condominium development company, the use of social media by an organisation that encourages innovation in Canadian business, use of social media in the relationship between students and landlords in Waterloo, the information technology strategy for a globally recognised film festival, the use of technology by one of Canada’s largest law firms and the application of social media to help deal with global pharmaceutical shortages.

Information technology is used in the course delivery. Videos were produced with project sponsors to brief the students about their projects and technology, partiularly Skype, is used in communication between the students and the sponsors. Project presentations are delivered online live to the sponsor and recordings provided to them for later viewing.

 This blog is one of a series that supports the author’s courses at the University of Waterloo. The rest are:
 
–Social Media For Business Performance: http://smbp.uwaterloo.ca/
–Impact of Information Systems on Society: http://impactofinformationsystemsonsociety.wordpress.com/
–Operations and Supply Chain Management: http://operationsandsupplychain.wordpress.com/
 
 Topics covered in the course include:
 
Putting technology into corporate planning
Technology strategy and innovation
People and technological change
Information technology and operations
Information technology and supply chain
Information technology and marketing
Information technology and new product development
The learning organisation
Integration
 
The assessment of the course involves the grading of the work that the students do on their projects (60 % of their grade), a mid term essay (20 % of the grade) and four team feedback assignments (5 percent each).
 
The group project is graded individually and the following items are taken into account. A group peer evaluation is undertaken after six weeks of the course and at the end of the course, the project presentations are rated by the whole class and project clients are asked for feedback on the students’ project performance.
 
The mid term assignment requires the students to write an essay on the issues in the involvement of people in technology related change and action that might be taken to improve it.
 
The team feedback assignment is based on presentations that the students make to the class on their projects as they proceed. In the assignment the students are asked to provide feedback to the presenting team on their project and advice on its conduct. Each team will recieve substantial feedback on their project.
 
Communications between the students and their project sponsor will be critical to the project success. Most teams meet weekly with their sponsor and a weekly written progress report is provided to the sponsor andf the course professor. At the end of the project the sponsor receives a wrtitten report and the online presentation, plus any other deliverables that have been agreed with the sponsor.
 
 
 
 
 

The Impact of Technology on Business Blog

This blog has been written for the students of the MSci 421 Strategic Management of Technology and Innovation course at the University of Waterloo. Each posting reflects the content of a lecture for the course  and is intended to allow students to review and digest presented course content more easily and conveniently than a classroom and powerpoint will traditionally allow.

The course also involves the students working on real world projects that involve the use of information technology to drive better business performance. If you are interested in proposing a project for the students please contact me.

The blog is also intended to allow people who are not in the class to access the course content, making the knowledge that exists in the university more accessible to the world. If you are reading the blog and find it interesting or useful or if you wish to take issue with anything that I have said, please post a comment or let me know by sending me an email at pdcarr@uwaterloo.ca

If you found this blog interesting, you might like to take a look at my others:

Social Media For Business Performance: http://smbp.uwaterloo.ca/

Impact of Information Systems on Society: http://impactofinformationsystemsonsociety.wordpress.com/

Project Leadership: http://projectleadershipwaterloo.wordpress.com/

Operations and Supply Chain Management: http://operationsandsupplychain.wordpress.com/

You can also follow me on Twitter: @impactofinfo

Peter Carr, Department of Management Sciences, University of Waterloo, Canada