| Course: 17.50s | Date: July 12-15, 2004 | Tuition: $3,000* |
Both public and private organizations are concerned about keeping pace with
a fast shifting environment. While this requires constant efforts at innovation,
the failure rate of these innovations is high. Many innovations fail to take
root at all. Others are not sustained over the long term. Why are some successful
and others not? What are the strategies employed by the success stories? Are
they primarily an exploitation of a comparative technological advantage, superior
economic resources, or organizational adaptability?
Even the most technology driven innovations require organizational change. Successful organizational change, in turn, requires both technical vision and political coalition-building strategies. This course will describe how successful organizational entrepreneurs build teams that balance technical and political competence. We will examine in detail cases of successful innovations, and those where the innovation failed or was not sustained.
How do successful entrepreneurs guide their organizations through the process of innovation? What are the motivations for innovation? What are the barriers? Are the incentives and barriers primarily: (1) internal to the or arising from external sources; (2) economic or technological in origin; (3) a function of competitive pressures or of technological imperatives?
Alternatively, is success or failure due to the characteristics, structures, internal incentives and processes of the organization that must implement the innovation? What are the strategies available for coalition building within organizations? How do individual incentives mesh with reframing, goal enlargement, and group solidarity?
In evaluating organizational innovation strategies, there are obvious differences between public and private sector organizations. Yet while the incentives are often very different, the underlying processes of innovation are very similar in the two sectors. We are particularly interested in public - private interactions. Successful innovation strategies in the private sector often involve effective exploitation of public organizations, while public innovation requires mobilization of support from the private sector.
OUTLINE OF THE PROGRAM
MONDAY AM:
The Innovation Process: Alternative Conceptions/Introductory Case
There are at least three competing concepts of the organizational requirements
for effective innovation. One stresses role of senior executives who grasp the
need for change, discover an innovation to meet the need, and motivate organization
to follow their lead. A second conception focuses on the evolutionary development
of new technologies at the lower levels of the organization, with the struggle
being to capture the support of the senior executives. A third conception stresses
the role of competition within the organization, between divisions or bureaus,
to provide the necessary incentives for innovation to take place. Are these
theories mutually exclusive? Do they depend on a particular bureaucratic context?
What are they leaving out?
MONDAY PM:
Innovation in the Private Sector
What is distinctive about innovation in the private sector? Why are some firms
more innovative than others? How should we distinguish between invention, innovation,
and transformation? What do economic and industrial organization theories tell
us about these processes, and what don't they explain?
TUESDAY AM:
S(t)imulating Innovation
As digital technologies for modeling and simulation offer more value for
less money, they provoke fundamental challenges to organizational culture and
design. Increasingly, digital models and prototypes are key platforms for managing
risk and creating value. They allow for cost-effective creativity, encourage
profitable improvisation, and inspire organizations to collaborate in unexpected
ways. Thus innovative prototyping styles help generate innovative teams. What
is the relationship between how leading innovators model reality and how they
actually manage it? How do we explain prototyping failures compared with prototyping
successes?
TUESDAY PM:
Lean Design as an Innovation
Lean design evolved at Toyota as a new set arrangements for managing technical
change. It now includes a complex web of organizational interrelationships.
Why did this system evolve at Toyota instead of GM? Can it be transplanted effectively
to other organizations? What happens when it meets a strong existing organizational
culture (e.g. Pratt and Whitney)? If only part of the new system is accepted,
will any of it be effective?
WEDNESDAY AM:
Corporate Strategies for Reshaping Their Environment
Sophisticated entrepreneurs find that changing public regulatory policy is the
key to getting new technology accepted. DuPont had substitutes for CFC's which
were too expensive to market until CFC's were phased out. Makowski and Company
foresaw natural gas-fired power plants in New England if Canadian and U.S. regulations
were reshaped. How did these companies envision the new opportunities? How did
they form coalitions to public policy?
WEDNESDAY PM:
Public Strategies for Reshaping Markets
In the last decade regulators have also tried to influence the performance of
corporations by reshaping markets. Has public policy in telecommunications been
leading technology or following it? Is telecommunications an appropriate model
for the electric power industry? Are the economics and technology really parallel?
How will shareholders and consumers share the gains? Will the pace of technical
change rise or fall?
THURSDAY AM:
The Politics of Innovation: Creating HDTV
The development path for High Definition Television has been extremely complex.
A vigorous competition among the companies produced far more advanced system
designs than anyone expected at the start. Yet this competition created and
managed by Federal regulators. In the next phase though, the regulators forced
a Grand Alliance among all the competitors. Formal cooperation however did not
end their rivalries. Throughout this process, technical choices and successes
depended on the shifting private and public coalitions. Does this case represent
the future for high technology innovations?
THURSDAY AM:
Innovation in Financial Services
The financial services sector has been one of the most consistently innovative
industries over the last two decades. What accounts for this record? How effective
have regulators been in coping with all this institutional change? What are
the implications for international public policy?
THURSDAY PM:
Political Strategies for Organizational Change
What strategies do successful innovators use to build coalitions within and
across organizations? How are individual incentives offered and exploited? How
are the issues framed? How are goals defined, enlarged or altered over time?
How is coalition solidarity maintained?
Please apply early. Prior sessions of the course were oversubscribed. Typical participants came from Exxon, 3M, Amgen, Lockheed Martin, Kodak, Motorola, the Office of the Secretary of Defense and other federal agencies, Pratt and Whitney, Honda, Michelin, and firms and universities in Europe, Korea, and Japan.
ABOUT THE PROGRAM FACULTY
All of the seminar leaders are MIT faculty or research associates. Several have also had extensive experience in government and the corporate sector, and all have published extensively on the topics of organizational change and innovation.
James L. Foster is a Research Associate at the Center for International Studies. He was previously a senior defense and intelligence analyst at RAND, an investment advisor for Dean Witter and for Shearson, and a mutual fund manager.
Paul F. Levy is President of Beth Israel Deaconess Medical Center. Previously he was Professor of Urban Studies at MIT, where he was actively involved in the restructuring of the electric power and telecommunications industries. Levy has also been Chairman of the Massachusetts Public Utilities Commission and Executive Director of the Massachusetts Water Resources Authority, where he managed the $4 billion cleanup of Boston Harbor.
Lee McKnight is Director of the Edward R. Murrow Center at the Fletcher School of Law and Diplomacy, Tufts University; Visiting Scholar at the MIT Center for Technology, Policy and Industrial Development; and founder of the Internet Telephone Consortium. He is co-editor of Internet Economics (1997), and co-author of The Gordian Knot: Political Gridlock on the Information Highway (1997).
Harvey M. Sapolsky is Professor of Public Policy and Organization, and Director of the Security Studies Program. He is a long-time specialist on innovation in the defense and health and communications sectors, and is now studying the restructuring of the defense industry.
Michael Schrage is co-director of the MIT Media Lab's E-Markets Initiative, and a Merrill Lynch Forum Innovation Fellow. His ongoing work explores the cultures of modeling and simulation in innovation management. Serious Play, his book about the economics and ethnology of prototyping, was recently published by the Harvard Business School Press. He writes the fortnightly "Brave New Work" column for Fortune magazine and is on the editorial board of the Sloan Management Review.
Sanford L. Weiner, a Research Associate at the Center for International Studies, is a policy analyst who has focused on technology and organizational change in the chemical, health and defense industries. He is now working on public and private responses to environmental concerns with the Center's Program on Regulation and The Environment.
James P. Womack is co-author of the best selling The Machine That Changed The World, which examined Toyota's lean design system. His Lean Enterprise Institute now works with a wide range of other corporations seeking to implement these ideas.
To apply on-line, go to the MIT Professional
Institute