Dr. Iris BerdrowDr. Iris BerdrowBentley College, Harvard Summer SchoolBentley College, Harvard Summer School

Student: Where is my Lincoln Student: Where is my Lincoln brief??brief?? Professor: Would you believe Professor: Would you believe my puppy ate my homework?my puppy ate my homework?

The next Dilbert cartoon:

Tonight’s class:Tonight’s class:

Readings Networks Learning, communication and innovation Controlled versus open learning Communication, organization structure and

innovation Wrap Up

“Linking Knowledge & Innovation for Competitive Advantage”

Learning Knowledge Innovating InnovationCompetitive advantage

• Divergent

• Exploration focus

• Cost = cost to get and stay smart

• Need to know how to explore

• Need infrastructure to facilitate exploration

• Convergent

• Exploitation focus

• Cost = cost to apply knowledge in the marketplace, i.e., commercialize the innovation

• Need to know how to exploit

• Need infrastructure to facilitate exploitation

Return via the market

Strategic alignmentPhase 1 Phase 2

Strategic alignment between P1 & P2 leads to competitive advantage. C.A. leads to higher returns. Thus how well we do P1 & P2 and the alignment will lead to higher returns.

Source: Global Innovation Assessment Project, McDonough, Berdrow & Zack, 2007. ©

Do not copy without permission.

Learning within organizationsLearning within organizations

What are the internal processes by which new knowledge is created, integrated and institutionalized into products, services and processes?

Source: M.M.Crossan & I.Berdrow. 2003. Organizational Learning and Strategic Renewal. Strategic Management Journal, V.24(11), p.1087.

Learning across organizationsLearning across organizations

What are the processes by which new knowledge is created, integrated and institutionalized across organizational boundaries?

Source: Berdrow, Iris. 2003. “Complex Learning Partnerships: Creating the Connections In International Alliances.” A.F. Buono, editor Enhancing Inter-Firm Networks and Interorganizational Strategies (Volume 3), Research in Management Consulting: Information Age Publishing, Greenwich, Ct: pp 117-136.

INDIVIDUAL

IND

IVID

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GROUP

GR

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ORGANIZATION

OR

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DEVELOPING LEARNING CAPABILITIES

ASSIMILATION

OF LEARNING

IMPACT ON

CONTINUED

LEARNING

Organization A

Organization B

Partnership

Learn

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with

in O

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s

Learn

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with

in O

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Learn

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Learning Target

Figure 1: Learning Matrix

Controlled versus Open LearningControlled versus Open Learning

Organizations choose between make, co-create or buy strategies of innovation.

What are the pros and cons of creating innovations in-house versus through an open peer development system?

The Lone Wizard or the MassesWhat is the contribution of Open Source?

On May 22, 1997, a little-known software programmer from Pennsylvania named Eric Raymond presented a

paper at a technology conference in Würzburg,

Germany. Titled “The Cathedral and the Bazaar.”

Traditionally, sophisticated programs had always been “built like cathedrals, carefully crafted by individual wizards or small bands of mages working in splendid isolation.”

An open source project, in contrast, was the product of a large and informal community

of volunteers who in aggregate “seemed to resemble a great

babbling bazaar of differing agendas and approaches.”

Raymond coins Linus’s Law, after Linus Torvalds,

Linux’s founder and presiding genius.

“Given enough eyeballs, all bugs are shallow.”

The Ignorance of Crowds by Nicholas G. Carr 05/31/07, enews Strategy+Business.

Benefits & Limitations of Open Benefits & Limitations of Open Source SystemsSource Systems1. Diversity of skills and experience

2. Diversity of agendas and perspectives

3. Requires little coordination among workers

4. Works best when labor is donated or partially subsidized

Cathedral versus BazaarCathedral versus Bazaar

CATHEDRALA MODEL OF INVENTION

BAZAARA MODEL OF OPTIMIZATION

• Find and fix problems• Collect and categorize information• Engaging customers to harness

insights and increasing loyalty

• Origination of ideas that lead to products

• Perfecting the fit and finish of products

Effective use of peer Effective use of peer development systemsdevelopment systems

IDEA GENERATION

PEER DEVELOPMENT EXPERT TEAMTorvalds’ hierarchy of talented software programmers to help

manage the contributions.

Linus Torvald, founder and presiding genius of Linux

Public contributions to the refinement of Linux

SOURCES OF INNOVATIVE SOURCES OF INNOVATIVE IDEASIDEAS Within organizations

Visionaries, Wizards R&D Labs New Leadership

Across organizations Networks Alliances

Outside organizations Peers Customers Competitors Industry

Organization & Architecture of Innovation: Managing the Flow of Technology by Allen & Henn, 2006: Butterworth-Heinemann.

What is the relationship between innovation, communication and organization structure?

ArgumentsArguments

Managers should realize that they have both organizational structure and physical space available to them when planning the innovation process.

Most frequently, the best source of new technical ideas for product development engineers is a colleague in the same organization.

Innovation ProcessInnovation Process

CONCEPT DEVELOPMENT ENGINEERING

Stages of Innovation

Num

ber

of P

eopl

e In

volv

ed

CommunicationCommunication

Distance between people

Pro

babi

lity

of

Com

mun

icat

ion

CommunicationCommunication

Probability of Face-toFace Communication

Pro

babi

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of

Tel

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omm

unic

atio

n

What have we learned?What have we learned?

Innovating requires learning Learning requires communication Organization structure and physical space

can impact learning, communication and hence, innovation.

TomorrowTomorrow

Mr. Christopher LaFarge Bank of America