Monday, July 26, 2010

SDM broadens thinking on technology strategy

By John Helferich, SDM ’10

Several years ago, I tried to put together a global technology strategy for Mars Inc. I hired a consultant and held numerous meetings and conference calls across the corporation. It all culminated in a meeting in a Munich hotel room that ended with nods and yesses. Unfortunately things fell apart after that and we never did finalize a strategy. What went wrong? Why couldn’t we create a strategy that could get global buy-in?

This nagged at me until I took Professor James Utterback’s technology strategy class this spring as a student in MIT’s System Design and Management Program (SDM). I expected to be assigned to write a technology strategy, and I planned to use the class to revisit my failed Mars’ strategy. To my surprise, Utterback argued that there is no prescriptive way to develop a technology strategy—each firm must find its own way. In other words, there is no one way for a firm to develop its approach to create and capture value.

Utterback divided the course into three parts, beginning with lectures based on his 1994 book, Mastering the Dynamics of Innovation. The book was founded on the ground-breaking work on the dynamics of innovation by Utterback and his colleague Professor Bill Abernathy of Harvard. Beginning with the now-famous history of ice harvesting (a successful innovation snuffed out by the advent of refrigeration), Professor Utterback led us through the ins and outs of the dynamics of innovation.

In the second part of the course, teams addressed key issues of strategy and innovation by developing a presentation based on a literature search of the topic. Topics ranged from innovation in services to dynamic capabilities. The teamwork, which involved conducting a thorough literature search and then agreeing on what it all meant, was good preparation for the back and forth needed to achieve a solid technology strategy.

The third part of the course was the highlight for most of us. Utterback and his teaching assistant, Yukari Kuramoto (a graduate student at MIT Sloan School of Management), selected 12 books about innovation, strategy, and design. Each of eight teams then selected one of the books to read, review, and critique. Utterback put the icing on the cake by inviting the authors to appear in person or on video to answer questions posed by the team and the class. This was an excellent opportunity to see beyond the book and understand the thinking of the author first-hand.

Besides the elements of technology strategy, we learned two important lessons. The first was always to consider the dynamics of strategy; a static analysis that ignores the changing nature of the corporation over time is never enough. Secondly, the only books worth considering are those based on significant research and not just conjecture.

In his other class, Disruptive Technologies—Predator or Prey, Utterback took a similar approach with lectures, case discussions, guest lectures and, most importantly, student projects.

The class, as the name suggests, is about helping students understand disruptive technologies, the effect of disruptive innovations on existing technologies, and how to identify and analyze new technologies that might prove to be disruptive.

We studied how disruptive innovations have caused large companies and major industries to fail in the past—by looking at the invention of electricity and mechanized icemaking disrupting the gas lighting and natural ice industry as examples. We also learned about the differences between the effects of disruptive technologies in assembled products industries (like computers) vs. homogenous industries (like glass manufacturing) as well as the factors to take into account while trying to analyze the disruption potential of a new technology.

During the term, we heard from fascinating guest speakers such as Joel Schindall, who explained his research breakthroughs storing energy in carbon nanotube ultracapacitors, and Irving Wladawsky-Berger, who talked about cloud computing and the growing importance of services in all industries. We also had the opportunity to discuss current innovations that might prove to be innovative with Harvard Business School Professor Clay Christensen, author of The Innovator’s Dilemma, as well as current mobile software platforms with Boston University Associate Professor Fernando Suarez, using the cases he has written.

Finally, to put all the learning into practice, the students were asked to choose any technology they find interesting and explore it—in terms of current technology, research investment, patents, paper publications, and technology trajectories—and determine possible implications to the market dynamics that the particular technology might have. We looked at and heard about such technologies as cloud computing and thirdgeneration solar cells (which are well-known but perhaps not as well understood), as well as such radical technologies as hybrid aircraft, saltwater desalinization technology, and privatization of commercial space travel.

Thanks to the group projects, we all appreciated the difficulties and work involved in analyzing the business implications of new technologies/innovations and learned that there certain indicators that might help in identifying the potential disruptors. But in the end, we all found that it is still very difficult to predict the future with any certainty!

To close I would like to note the eye-opening impact that members of the SDM cohort had in each class on our collective knowledge development. Cohort members hailed from approximately 15 different countries and had an average of eight to nine years of experience in a range of firms, from startups to global operations. The collective wisdom they brought to class had an enormous impact on the range of insights we all made into the various problems addressed. Each of us benefited not only from our teammates’ experience but also from the knowledge other teams shared with the class. I think the SDM community really provides a one-of-a-kind opportunity for such dynamic knowledge development.

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