www.FITT-for-Innovation.eu

1. How to manage uncertainty in
business strategy?
Dominique VIAN
Research Professor
SKEMA Business School
FITT
– Fostering Interregional Exchange in ICT Technology Transfer –
www.FITT-for-Innovation.eu
Except where otherwise noted, this work is licensed under a Creative Commons Attribution 3.0 License.

2. Summary
Some Preminary definitions
Managerial Thinking – Causal Reasoning
Entrepreneurial Thinking - Effectual Reasoning
ISMA360®: The process
Using of ISMA360® for a ICT cluster
2 | 03/2011 How to manage uncertainty in business strategy?

3. Some preliminary definitions
Innovate: to introduce a newness (the invention) into
a social environment (the market is a social milieu)
Schumpeter (1942)
« Innovation is to be disobedient to the past »
Boris Cyrulnik (2002)
3 | 03/2011 How to manage uncertainty in business strategy?

4. Some preliminary definitions
“To be overly preoccupied with the future is to be
inattentive toward the present where learning and
growth take place.”
Karl Weick
"How Projects Lose Meaning: The Dynamics of Renewal" in Renewing Research Practice by R. Stablein and P. Frost
(Eds.). Stanford, CA: Stanford. 2004
4 | 03/2011 How to manage uncertainty in business strategy?

5. Risk management and control under
uncertainty is also two philosophical positions
The predictions in economics are not as exact as …
… the complexity of our human organizations creates
uncertainty
… risk Management : the exceptional situations are not
considered
.. in a certain world, there is no room for breakthrough
innovation
Causal Reasoning ↔ Effectual Reasoning
5 | 03/2011 How to manage uncertainty in business strategy?

6. Managerial Thinking – Causal Reasoning
The means are
causes to achieve the Simple projection of
intended goal the future
Given Goal
« To the extent that we can predict the future, we can control it. »
(Sarasvathy et Simon, 2000)
6 | 03/2011 How to manage uncertainty in business strategy?

7. The Predictive Process
Extract from Read et al. (2009)
7 | 03/2011 How to manage uncertainty in business strategy?

8. Entrepreneurial Thinking - Effectual Reasoning
What are my What are the effects I
given means? can reach with given
means?
Sense making
« To the extent that we can control the future, we do not
need to predict it»
(Sarasvathy et Simon, 2000)
8 | 03/2011 How to manage uncertainty in business strategy?

9. The Effectual Process
Extract from Sarasvathy and Dew (2005)
9 | 03/2011 How to manage uncertainty in business strategy?

10. Difference between Predictive & Effectual
Thought
From Sarasvathy et Dew, 2005
10 | 03/2011 How to manage uncertainty in business strategy?

11. The information system that mobilizes the
predictive logic…
• Begins by defining the specific objective to achieve
• Organizes the resources in backward chaining from the goal
• Reorganizes possibly the means to achieve the predefined goal
• Seeks to maximize the achievement of the objective (critical path)
Eg : MS Project ®, Project Management Tool
11 | 03/2011 How to manage uncertainty in business strategy?

12. The information system that mobilizes the
Effectual logic…
• Does not define a specific goal but an overall goal that makes sense
• Picks up cues that are potentially means and effects (weak signal)
• Permanently re-processes cues according to the direction that continuously
develops
• Coupling means and effects is what provides product design and market
forward chaining
• Result is achieved is outside the process (it is a consequence)
Eg : ISMA360 ®, an effectual method to design
innovation
ISMA60 is a Trademark of SKEMA BS – Author Dominique Vian
12 | 03/2011 How to manage uncertainty in business strategy?

13. ISMA360®: The process
13 | 03/2011 How to manage uncertainty in business strategy?

14. Using of ISMA360®
for a cluster
The case of French Competitiveness Cluster SCS
(Secured Communicating Solutions)

15. The problem of the cluster, as it has been
exposed
The Cluster SCS, focused on ICT technology and skills, has
one mission: Boosting the emergence of innovative and
collaborative projects on priority focuses - identity, connectivity,
mobility, tracking.
The problems they have faced:
• Is it appropriate or not to invest in technology because of its
feasibility and its potential market
• Verify that skills are present within the cluster
• If yes, find collaborative projects
15 | 03/2011 How to manage uncertainty in business strategy?

16. Questions to answer?
• What are the potential applications of the new technology
NFC (Near field communication) today?
• Among these applications, the use of NFC for the distribution
sector is an key application?
• Applications around the payment, can they grow?
• On which applications could be mobilized members of the
cluster to build a relevant collaborative project?
16 | 03/2011 How to manage uncertainty in business strategy?

17. The results found through the application of
the method (1 / 3)
The role of innovation:
In the field of wireless communication, NFC enables
information exchange between a transmitter and intended
receiver
Unique character of the role: this is what
differentiates NFC technology from any other
technologies
17 | 03/2011 How to manage uncertainty in business strategy?

18. The results found through the application of
the method (2 / 3)
• Relevant applications of NFC (to date):
• Promotion of a site or museum
• Retail (supermarkets only) with the support of advertisers for the promotion,
information about a product and its location in the store
• Applications not relevant to the NFC or impossible to operate under
current conditions of the market
• Management of infrastructure building
• Payment outside of a solution integrating other features of the Retail
• E-ticketing
18 | 03/2011 How to manage uncertainty in business strategy?

19. The results found through the application of
the method (3 / 3)
• Current conditions allow an “NFC Retail“solution
• The only partner who can implement it today is an integrated information
system like Schlumberger or Cap Gemini, which may contract directly
with WalMart or Carrefour.
• Collaborative projects for “NFC Retail” are not possible
• Collaborative projects are possible for tourism sector
19 | 03/2011 How to manage uncertainty in business strategy?

20. Conclusion
• Both rationalities can be used. It is possible to take one or the other
depending on the situation.
• The Effectual reasoning corresponds to situations of innovation (high
uncertainty).
• Apple who is taking place in the market of mobile telephony (I-Phone)
or creates a new market (I-Pad) demonstrates its ability to mobilize
the two rationalities.
20 | 03/2011 How to manage uncertainty in business strategy?

21. Training offer - SKEMA Exe
SKEMA Business School has developed a new training module
“Strategic Marketing for Innovation”, 100% effectual and includes an
introduction to the ISMA360 ® method .
21 | 03/2011 How to manage uncertainty in business strategy?

22. Exclusive partner of SKEMA BS for the
commercialisation of ISMA360®
One Method One tool
2 certifications The collaborative software
22 | 03/2011 How to manage uncertainty in business strategy?