In this presentation we will explore the successes and failures of established and emerging companies across multiple disciplines and how they organize for innovation. I believe that innovation occurs when you foster ingenuity by enabling employees and develop opportunities with strategic management.

1. ORGANIZING INNOVATION
USING STRUCTURE TO FOSTER INGENUITY

2. INNOVATE
VERB / MAKE CHANGES IN SOMETHING ESTABLISHED,
ESP. BY INTRODUCING NEW METHODS, IDEAS OR
PRODUCTS

3. HOW DO WE CREATE INNOVATION?

4. INGENUITY
NOUN / THE QUALITY OF BEING CLEVER, ORIGINAL AND
INVENTIVE

5. OPPORTUNITY
NOUN / A SET OF CIRCUMSTANCES THAT MAKES IT
POSSIBLE TO DO SOMETHING

6. INGENUITY + OPPORTUNITY = INNOVATION

7. UNDERSTANDING STRUCTURAL INGENUITY
• Existing Companies
• Emerging Companies
• Types of Structure
• Knowledge
• Investment
Apple Mac Pro Assembly Line / Austin, Texas

8. THE OLD GUARD
THE SUCCESS AND FAILURES
OF A “TRADITIONAL CORPORATION”

12. CAR MANUFACTURING
• Mature market
• Process Innovation
• VW Works Council*
• Product Innovation
• Honda City**
*Bernie Woodall. 2014. After rejecting UAW, VW workers may still get work council. Reuters, February 16.
**Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

13. MARKET S-CURVE
Time
Growth

14. UTTERBACK-ABERNATHY MODEL
Product Innovation
Process Innovation

15. NEED FOR ORGANIZATION
Gaps in R&D
• Safety / Seat Belts
• Comfort / Air Conditioning
• Technology / Electric Car
• New Markets / Small City Cars

16. FOSTERING INGENUITY + FINDING OPPORTUNITY
• “Let’s Gamble”*
• Middle - Up - Down**
• Job Rotation*
Product Innovation Process Innovation
• Works Council
• R&D
• Internal Competition*
*Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p
**Numagami, T., Karube, M., & Kato, T. 2010. Organizational Deadweight: Learning From Japan. Academy of Management Perspectives, 24(4), 25-37.

17. NEW KIDS ON THE BLOCK
CREATING INNOVATION FROM SCRATCH

19. Steve Jobs John LasseterEd Catmull

20. ORGANIZING WITH A CLEAN SLATE
• Flexible
• Communication
• Teams

21. THE CROWD TECHNICAL TEAM
PIXAR’S DEVELOPMENT OF ANIMATED AUTONOMOUS
ANTS
The Pixar Story. Dir. Leslie Iwerks. Disney, 2007. Film
A Bug’s Life, 1998

22. INDICATORS TO A NEW STRATEGY*
• Manifesto
• Anthology
• Infrastructure to Replicate
• Congenial Technology
• Market
• Organization
*Roy Peter Clark. 2014. What it takes to create a new kind of journalism. Poynter Institute, April 7.

23. THE BRAINTRUST
HOW PIXAR SELF-CRITIQUES
Pixar Screening Room / Emeryville, California
Catmull, Ed. Creativity Inc. Random House. 2014. Print.

24. STRUCTURE
WHAT IS IT GOOD FOR?

25. TYPES OF STRUCTURE
Decentralization
Centralization
OrganicMechanistic

26. PROS AND CONS
Type Pro Con
Centralized Tightly controlled plan
Little input from company as a
whole
Decentralized
Access to information
Idea generation
Increase marker orientation
Difficult coordination
Avoids radical innovation
Hinders strategic management
Mechanistic
More efficient
Predictable, incremental
Hinders innovation
Drives away creatives
Organic
Sharing of knowledge
Fosters innovation
Relies on employee commitment
Shane, Scott. 2009, Technology Strategy for Managers and Entrepreneurs, Englewood Cliffs, NJ: Prentice Hall, ISBN-10: 0131879324

27. BEST OF BOTH WORLDS?
• Create new units?*
• Give middle management more freedom for middle-up-down?*
• Increased flexibility to foster innovation?**
• Separate directors for each “type”**
*Numagami, T., Karube, M., & Kato, T. 2010. Organizational Deadweight: Learning From Japan. Academy of Management Perspectives, 24(4), 25-37.
**Organizing From Scratch: The Learning Lab Denmark Experience (A)

28. KNOWLEDGE
A COMPANY IS NOT A
MACHINE BUT A LIVING
ORGANISM,
Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

29. HOW TO CREATE KNOWLEDGE
• Center of human resource strategy
• Types of knowledge
• Middle-Up-Down
• Clear obstacles
Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

30. TACE
T EXPLICIT
TYPES OF
KNOWLEDGE
• T to T
• E to E
• T to E
• E to T
Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8, p162-171, 9p

31. INVESTMENT
ORGANIZATIONAL RESOURCES

32. Skype Google
AirBNB

33. SLACK RESOURCES
BUILDING BEYOND A
COMPANIES CURRENT
OPERATING PLAN
Shane, Scott. 2009, Technology Strategy for Managers and Entrepreneurs, Englewood Cliffs, NJ: Prentice Hall, ISBN-10: 0131879324
Dyson

34. SO IS ALL OF THIS SUSTAINABLE?

35. WHY MIDDLE-TOP-DOWN HAS FAILED
• Inward thinking lead to a disconnect from the market
• Shortage of strategic thinkers
• Promoted poorly
• Can’t tell a good idea from a bad one
• Heavy load on middle managers

36. CIRCLE OF DEADWEIGHT
Middle Management
Freedom
Promoted Over Time
Lack of Strategic Thinkers
Lose ability to vet ideas
Rely on new
middle managers
Heavy workload on
middle managers
Freeloading managers

37. IS THERE ONE SOLUTION?
NO.

38. UTTERBACK-ABERNATHY MODEL
Product Innovation
Process Innovation

39. NEED FOR ORGANIZATION
Gaps in R&D

40. MARKET S-CURVE
Time
Growth

42. REFERENCES
• Bernie Woodall. 2014. After rejecting UAW, VW workers may still get work council. Reuters, February 16.
• Nonaka, Ikujiro “Knowledge Creating Company,” Harvard Business Review; Jul/Aug 2007, Vol. 85 Issue 7/8,
p162-171, 9p
• Numagami, T., Karube, M., & Kato, T. 2010. Organizational Deadweight: Learning From Japan. Academy of
Management Perspectives, 24(4), 25-37.
• The Pixar Story. Dir. Leslie Iwerks. Disney, 2007. Film
• Roy Peter Clark. 2014. What it takes to create a new kind of journalism. Poynter Institute, April 7.
• Catmull, Ed. Creativity Inc. Random House. 2014. Print.
• Shane, Scott. 2009, Technology Strategy for Managers and Entrepreneurs, Englewood Cliffs, NJ: Prentice
Hall, ISBN-10: 0131879324

43. QUESTIONS?