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7/30/2019 Marketing HighTech

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Chapter 3:

Culture and Climate Considerationsfor High-Tech Companies


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2010 Pearson Education, Inc. publishing as Prentice Hall

What characterizes an innovative

culture in high-tech companies?

How is creativity related toinnovativeness?

What are the facilitators of a cultureof innovativeness?

What are possible barriers to aninnovative culture?


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High-Tech companies can becomecomplacent Need to cultivate a climate/culture of

innovativeness

Culture Set of organizational values and beliefs

that guide behavior Hard to change

Climate Set of expected behaviors Observable manifestation of culture

Culture and Climate in High-Tech Firms


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Success= Culture of Innovativeness Break-through thinking

Risk taking

Assess by percent of revenue derivedfrom recently-released products andbreakthrough innovations


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Obstacles to Innovativeness (see later slides) Core rigidities

Innovators dilemma

Organizational size?

Cyclic nature of business


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Develop/Maintain Innovativeness Steady stream of innovations

Entrepreneurial spirit

Nonlinear process In contrast to stage-gate, step-by-step process

Forward-looking


7/322010 Pearson Education, Inc. publishing as Prentice Hall

Chapter 3: Culture of Innovativeness Chapter 4: Market-oriented culture;culture of collaborative cross-functional interactions



Creativity as a source of competitiveadvantage Must be disciplined creativity guided

and channeled with strategic planning Ideas must be novel AND useful



Top managers have a strong influence ininnovation Set example for values and beliefs

Successful NPD efforts have CEO that isintimately involved with every aspect ofthe process

Completely back the project

Exhibit a future focus Exhibit an external (market/customer)

focus



Process of developing/commercializingbreakthrough product, service, or modelthat obsolete or cannibalize existing

products Current technology made obsolete

by proactively developing next-generation technology

May be the antidote to the InnovatorsDilemmaif it overcomes internal rigidity



Use fear of obsolescence as motivationto engage in creative destruction

Drivers: SBUs compete internally for resources

Product champions carry strong role Focus on future markets more than current

markets



People who assume significant risks tosee their innovative ideas succeed Tireless crusaders

Product champions are characterized by: Rule-breaking and risk-taking

Political astuteness Technical competency

Aggressiveness



Product champions in more innovative firmswield more influence than those in lessinnovative firms They have power to make ideas happen

Reward system and top management support them

Product champions in less innovativefirmswield less influence Are frustrated and demoralized



Isolate new venture groups outside thenormal organizational hierarchy

Pros:

-More creativity, unfettered by existingcorporate protocols

Cons:

-Signals impediments to innovation

-Isolates the creative process



Actively facilitating the development of newknowledge and insights that influence thecompanys strategy

Facilitated by: Top management support

Decentralized/market-based approach to planning

Market orientation firms ability to actively

monitor customer/ competitor trends A competency-based source of competitive

advantage



Learning may be the only source of sustainablecompetitive advantage

Ray Stata, CEOAnalog Devices

In an economy where the only certainty is uncertainty,the one sure source of lasting competitive advantage isknowledge Ikujiro Nonaka,

The Knowledge Creating Company

A unique characteristic of knowledge is that it is one ofthe few assets that grows most usually exponentially -when shared James Brian Quinn,

Intelligent Enterprise



Abandon conventional wisdom

Unlearn traditional butdetrimental practices



Create a vision of the future based on marketsthat do not yet exist and unconfined by existingindustry boundaries

Challenge the status quo Overturn price/performance assumptions

Escape the tyranny of the served market

Use new sources of ideas for innovation

Get out in front of customers Engage in creativity exercises



Frequent fast-paced market incursions (see nextslide)

Based on times at bat rather than one home run

Requires: Accurate learning of customer needs Recalibration of market offerings

Light and fast

Shorten time between market learning and product launch

Implication: Accumulatemarket experience, andquickly adapt market offerings

Enlightened experimentation


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Model 1

Model 2

Model 3

Time

Development

Overall Revenue

Incr. Revenue

New Models

Relationship between Entr ies in the Market and Quality

Model 1

Model 2

Model 3

Time

Development

Overall Revenue

Incr. Revenue

New Models

Relationship between Entr ies in the Market and Quality


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Tolerate mistakes

Learn from mistakes

Mistake may prove to be next success

Reward risk taking


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Appropriate reward system

Long term perspective


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Emphasize the importance of diversity

Maintain close relationships with themost innovative customers

Frequently evaluate project progress

Build innovation into performance reviewprocess

*see table 3-1 for a complete listing


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Provide considerable freedom of action

Educate employees about emergingtechnologies

Use teams of employees

Rapidly communicate new ideas acrossthe company.

*see table 3-1 for a complete listing


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Well-established routines that preventa firm from taking a fresh perspective Bound by existing rules of the game Ingrained routines, knowledge, and skills

become strait-jackets

Inhibit a firms ability to develop unfamiliarskills, routines, and new knowledge


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In high-tech firms, core rigidities might bebased on cultural norms that include: Status hierarchies that give preference to technical

personnel over marketing personnel

Preferences for existing technologies and products Focus on technologies/products rather than

customers/markets


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Core rigidities can be overcome by: Unlearning

Learning orientation


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Difficulty in innovating and responding todisruptive innovations Due to need to divert resources from pursuing

incremental innovations that addressed known

customer needs in established markets To new markets and customers that may seem

insignificant Arises from sunk costs in old technology;

bias in managerial decision making, and

reliance on existing customers

To succeed: Engage in creative destruction


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Life is pretty simple: you do some stuff. Most fails. Some works. You domore of what works. If it works big, others quickly copy it. Then you do

something else. The trick is in the doing something else. You must take pot

shots at todays starbeforeyou are mimicked. Todays radiantly blooming

flowers are tomorrows mulch. Dont forget that for a moment. But dont

think about it too long either.

Tom Peters


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Opening Vignette: Google Technology Expert: ESRI (GIS software)

Technology Tidbit: Star Sight

End-of-Book Case: ESRI


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