Blog #3 Developing Strategic Options

The Innovator’s Dilemma is an important and fascinating study on the relationship between organizational culture and the ability to innovate. Customers don’t always know what they need, and it is important to consider that market progress is different from technology progress. In order to be able to innovate, resource allocation is needed, but that is very difficult for disruptive technologies to do. Disruptive technologies have a marketing problem, not a technological one; old customers are most likely not relevant and or are not interested in any change. What also needs to be measured is that disruptive technology requires different and more capabilities than organizations have so far. New organizations can innovate easier with disruptive technologies because they are not tied to outdated values or organizational norms. Since the required information does not exist in the innovator’s case, trial and failure are required.

While reading ‘Cisco’s CEO on Staying Ahead of Technology Shifts’, more of the above points were touched. More specifically, John Chambers mentioned that one of the key things he attributes his success to is staying ahead of technology shifts and having a strategy for them. Chambers also said that if the shift was seen early enough, Cisco develops the technology in-house, and sometimes they have a group of engineers and developers assemble to work on a specific project and operate outside of the company, replicating a start-up environment. Alternatively, if the shift was not seen early enough, then they looked to acquire other companies which had expertise on the matter. Another issue that was revealed to play a role in spotting a market shift that I had not considered before, is geography. An example was given with Microsoft and its slow adaptation to the internet because their headquarters were in Seattle and not Silicon Valley. There is also a luck factor when it comes to spotting the right market and the right solution. In some cases, the market might be wrong, or too early to invest and on the other hand, it might be the right market with wrong execution.

Taking the above knowledge into account I did 2 runs of the Backbay battery simulation. During my first run, I got fired with loss and during my second run, I was able to make a profit. During the first run, I was testing out the whole process trying to understand how everything works, I didn’t have a solid strategy and I also did not pay much attention to what the news was saying. After understanding what I did wrong and what to improve on in the second try, I focused the majority of the rnd in process improvements, listening to the suggestions of the news, and when I noticed a breakthrough in certain developments I put more money into those fields the next month. There was a lot of uncertainty, and I found that it was good if I maintained a steady strategy, even if things started to go wrong. Being cognizant of forecasting and also knowing the price consumers are willing to pay was extremely helpful for my strategy development, so the news helped me figure out what the new price should be for the product and also if my forecasting was too high or low.