Strategic Management of Technology and Innovations in Radical Innovation Ventures - Literature review Example

Strategic management of technology and innovation Name Institution Introduction Radical innovation ventures (RIVs) are essentially innovative business undertakings that have risks of loss yet promise profits. They create entirely new lines of businesses for companies (O'Connor & McDermott, 2004). This paper presents a case analysis. It discusses a critical factor in improving the effectiveness of a RIV, the meaning of a "killer-approach" within the context of RIV and collaborative capacity, who is more likely to perform better in innovation strategies, and lastly the characteristics of a "winner.” A critical factor in improving the effectiveness of a RIV Developing networks of innovation partners is central to improving the effectiveness of a RIV. In fact, Bauwen (2011) suggests that due to the chronic volatile markets and the complexities RIVs face, a critical factor for improving the effectiveness of RIV should entail developing networks of innovation partners. This will enable organisations to transform the manner in which they co-innovate, co-create, collaborate, and communicate with their diverse network of stakeholders. Still, selecting the right strategic partner is critical. In this respect, organisations should engage ‘outsiders’ to add complementary capabilities to the RIV and to stretch its scope. Bauwen (2011) suggests that winning organisations in the 21st century are those that set up a global ecosystem of partners, stress on flexibility in accessing expertise, talents and products rather than leadership. However, it is critical that the partnerships must have complementary contributions and mutual trust. Otherwise, the RIV partnerships will fail to deliver value. This will enable the RIVs to benefit from critical capabilities in order to balance their business models, achieve synergies, shift their web relationships, and co-evolve, and exploit fresh opportunities. At the same time, Bauwen (2011) also suggests that marketing and sales need to be aligned in order to improve the effectiveness of RIV. This will improve the efficiency of the sales and marketing models, such as coherent and consistent positioning, synchronised go-to-market, more focused sales efforts, and improved satisfaction levels of the venture. In sum, organisations with a diverse network of partners within their innovation framework strategies are likely to perform better. 2. What does he describe as a "killer-approach"? Bauwen (2011) describes ‘going too broad too fast” as a ‘killer approach’ for RIVs. Based on analysis of his viewpoint, it could be reasoned that he seeks to point out that when a firm launches a new product, the firms may be tempted to instantly strengthen the capacity of their sales force in order to acquire customers as rapidly as possible. The approach is however, a killer since processes, such as hiring a full-fledged sales force rapidly may lead the firm to burn through cash (Leslie & Holloway, 2006). Consequently, the firm may not meet its revenue expectations. In which case, before the firm gets to sell its innovative products effectively, it first needs to study how the customers acquire and utilise it. As Bauwen (2011) opines, the relationship between marketing and sales cannot necessarily operate efficiently. At the same time, the actions of these firms tend not to be collaborative or co-ordinated. This is since the decision to rapidly strengthen its sales force may lack collaboration due to lack of understanding of the cultural barriers, ambiguity of roles and poor communication. Bauwen (2011) warns against this approach. Indeed, it is reasoned that the ‘killer approach’ may interfere with the gradual process of learning and collaboration in the organisation. Such companies using the approach may tend to pressurise their sales workforce to shift from new employees into full productive sales force, while in their first month into the job, before even they learn about the RIV, its products, the innovations and stakeholders. In terms of broadness of the approach, firms need to take part in a range of inter-organisational collaborations in order to develop new products that can achieve commercial success. In which case, firms with a diverse network of collaborative partners in their framework of innovation strategies are likely to be successful. 3. Who is more likely to perform better in their innovation strategies? Firms that transform their approach from ‘know-how’ to ‘know-who’ are likely to perform better in their innovation strategies by promoting speed of innovation and risk sharing. These firms also need to form partnerships to ensure marketing and business success of their innovations. Therefore, firms that form collaborative partnerships have a high likelihood of performing better in their innovation strategies. Bauwen (2011) suggests that effective collaborative between these firms leads to sustainable competitive advantage. Additionally, the innovation strategies remain operational even during short-term lapse. Despite getting into strategic partnerships, RIVs will still require collaborative approach that is consistent with the overall strategy and centred on the longer-term. In the event of a tactful relationship, the short-term gaps may drive down cost for unnecessary critical activities. In respect to forming partnerships, firms that perform effectively in their innovation strategies are also those that select the right strategic partner. Rather than jump into a relationship with information on the capability of the partnering firm, taking time to assess the right partner can lead to cohesiveness, mutual trust, and shared interest. The wrong partner can lead to a failure of innovation strategies, since some strategic partners may be opportunistic, or have predatory motives. For the RIV to be successful, between the partnering firms, there has to be a strategic fit, which has to be balanced off with a cultural fit. For a partnership to be successful, both partnering firms have to made investments to ensure that mutual benefits are realised. Bauwen (2011) suggests that failure to get the right strategic fit may be anchored in poor communication, lack of understanding of each partner’s roles, divergent interests and expectations and incompatible chemistry. Hence, when there is a strong motivation for the innovators to work collaboratively, and when the partners have stake in the partnership, they are likely to have a strong incentive to succeed in working together to promote their RIVs. 4. Characteristics of a "winner"? Bauwen (2011) describes a winner as one that is ‘alert, agile and dynamically adapting his portfolio of collaboration.” Three characteristics can be drawn from Bauwen’s (2011) statement: agility, alertness and dynamically adapting. When it comes to alertness, organizations have to be vigilant, or pay continuous and close attention to the trends in the industry. Within the context of RIV, Bauwen (2011) comments that several firms are shifting into “know who” from “know how” approach to promote speed and risk sharing. Hence, alertness would involve capitalizing on the trend to transform the manner in which they co-create, connect, communicate, co-develop and co-innovate. RIV also need to be alert in order to collaborate with the outsiders and insiders. The alertness also comprises being alert on what to prioritise or address. Bauwen (2011) explains that in many cases, firms tend to jump into strategic relationships without being alert to the complex trade-offs and array of choices that they should make. Hence, before they engage partners, winners need to be alert to the goals, complexities and types of collaboration. Agility would involve moving quickly to embrace opportunities that lead RIV to perform better in their innovation strategies. Within the context of RIV and the need to embrace collaborative capabilities, it involves being agile enough to seek strategic partnerships with the right partners and working collaboratively with these partners. They should also be agile in terms of screening capabilities of the existing partners continuously on an on-going basis. As Bauwen (2011) outlines, the biggest winners in the Twenty-first century as those that are agile enough to pull together global ecosystem of partners and to stress flexibility in terms of accessing talents, products and expertise. However, getting the right partner is not enough. The partners have to be agile enough to work collaboratively to realize sustainable competitive advantage. The partners also need to be agile enough allow the collaboration to remain operational. Dynamically adaptability involves being forcefully flexible or capable of adapting to varied situations. This is critical due to the advantages of diversity in innovation. Indeed, Bauwen (2011) explains that firms that are flexible enough to engage in a range of inter-organisational collaborations are more likely to create diverse products that have greater potential for commercial success. Additionally, companies with heterogeneous network of collaborative partners in their realm of their innovation strategies are more likely to perform better. Conclusion Developing networks of innovation partners is central to improving the effectiveness of a RIV. In sum, organisations with a diverse network of partners within their innovation framework strategies are likely to perform better. The “killer-approach" entails the ‘going too broad too fast” approach where a firm that has launched a new product becomes tempted to instantly strengthen the capacity of their sales force in order to acquire customers as rapidly as possible. Firms that transform their approach from ‘know-how’ to ‘know-who’ are likely to perform better in their innovation strategies by promoting speed of innovation and risk sharing. Lastly, a winner in this regard has three basic characteristics: agility, alertness and dynamically adapting. To conclude, RIVs with a diverse network of partners within their innovation framework strategies are more likely to perform better. References Bauwen, G. (2011). Radical Innovation Ventures and Collaborating Capabilities. University of Strathclyde Leslie, M. and C. A. Holloway (2006). The sales learning curve. Harvard Business Review, 1-10 O'Connor, G. & McDermott, C. (2004). The human side of radical innovation. Journal of ENgineering Technology 21(1), 11-30 Read More