I have a new paper accepted for publication. The paper, “Complexities of Large-Scale Technology Project Failure: A Forensic Analysis of the Seattle Popular Monorail Authority”, will appear in Public Performance & Management Review (http://mesharpe.com/mall/results1.asp?ACR=PMR).
I co-authored the paper with one of my former graduate students of the Information School (University of Washington), Nina Yuttapongsontorn, and Ashley Braganza (Cranfield School of Management, UK).
Complexities of Large-Scale Technology Project Failure: A Forensic Analysis of the Seattle Popular Monorail Authority
Abstract:“Being stuck in traffic doesn’t have to be a way of life.” This beautiful prologue came from the Elevated Transportation Company (ETC) board’s letter in the ETC Seattle Popular Monorail Plan, one of the largest public works projects ever proposed in the city of Seattle. Three years after this proposal, the Seattle Monorail Project (SMP) was shut down by voters on November 8, 2005. This paper critically analyzes the SMP through the lens of stakeholder theory. This perspective provides valuable insights into the failure of the SMP. We theorize that SMP’s failure might have been avoided had its leadership recognized the many stakeholders that had power over the plan and, more importantly, the dynamic changes in relationships between the stakeholders. Failure might also have been avoided by managing conflicts in stakeholders’ expectations. Specifically, we use stakeholder theory to develop four propositions that are relevant in the context of large-scale technology projects. One, organizations are more likely to succeed when have effective mechanisms for monitoring and evaluating interactions between stakeholders and changes in their positions in relation to their strategic innovation projects. Two, organizations are more likely to succeed when they tradeoff the conflicts in expectations and interests that stakeholders hold. Three, organizations are more likely to implement complex technology projects by understanding stakeholders’ expectations and the interplay between stakeholders. Four, organizations are more likely to achieve their innovative projects when they define stakeholders in terms of their power over their strategic objectives. The paper makes a contribution both to the research and practice of major technological infrastructure projects, strategic innovations, and government technology management.
Thursday, November 01, 2007
I have a new paper accepted for publication. The paper, “Complexities of Large-Scale Technology Project Failure: A Forensic Analysis of the Seattle Popular Monorail Authority”, will appear in Public Performance & Management Review (http://mesharpe.com/mall/results1.asp?ACR=PMR).
Thursday, September 06, 2007
I was interviewed for the lead article for the Kaufmann Foundation collection on Strategic Sourcing: A New Way to Think about Outsourcing. A summary of the collection: Using a combination of theory, practice, and real-life stories of entrepreneurs like you, this Collection surveys how outsourcing can best serve today’s entrepreneur, president, or CEO. Which functions make the most sense to outsource? How can you use the practice as a strategy? What pitfalls and possibilities do you face when you turn over important business operations to an “outsider”? Entrepreneurs and experts supply answers to these essential questions and others. Smart entrepreneurs now think about the practice as “strategic sourcing”: It can be an invaluable investment that reduces opportunity costs and leverages the primary skills and talents that truly drive the business. Key point: Outsourcing should now be on the inside at entrepreneurial companies, occupying a seat at the growth strategies table.
See the following: Desouza, K.C. “Outsourcing and Opportunity,” [Lead Article] in Strategic Sourcing: A New Way to Think about Outsourcing, Kansas City, MO: Kauffman Foundation, August 28, 2007.
Posted by Kevin C. Desouza at 3:41 AM
Saturday, September 01, 2007
Review of Reinventing Project Management: The Diamond Approach to Successful Growth and Innovation (Harvard Business School Press, 2007)
Reinventing Project Management proposes a novel approach to managing projects. The diamond approach takes into account the four critical determinants of projects: novelty, technology, complexity, and pace. The authors describe the use of their model through the use of vivid examples and case studies. The book also covers topics such as managing projects for innovation and project alignment with internal and external organizational forces. Overall, I found the book interesting to read. However, I must say that while the book has substantial material presented, not all of it is novel or groundbreaking. Most of the material is repeated from previous works of established authors and is already common knowledge to most project managers. But, for the novice project manager this is a great book…
Posted by Kevin C. Desouza at 6:00 PM
Monday, August 20, 2007
Reinventing Project Management: The Diamond Approach to Successful Growth and Innovation (Harvard Business School Press, 2007)
Posted by Kevin C. Desouza at 11:18 AM
Wednesday, August 15, 2007
I have just accepted an invitation to join the Editorial Board of Strategic Outsourcing, an International Journal (see http://www.emeraldinsight.com/info/journals/so). Dr. Marco Busi (University of Strathclyde) is the Editor of the journal. It is an honor to be asked to join the Editorial Board. The Editorial Board has several notable researchers such as Professor Bjorn Andersen, Professor Leslie Willcocks, Dr Erran Carmel, Dr Jeanne Ross, and Dr Mary C. Lacity, among others…
Posted by Kevin C. Desouza at 9:21 AM
Saturday, August 11, 2007
The best business book on the competitive stature of India, China, and China-India! A must read for executives who want to stay relevant in today’s global marketplace. India and China are two superpowers in the making. IT and the East (by James M. Popkin and Partha Iyer, HBS Press, 2007) provides a detailed, honest, practical, and futuristic examination of the operating environments of these two nations. In addition, this book describes the potential symbiotic environment that might develop if India and China strengthen their cooperative relationships.
I must repeat, this is a must read!
The book is detailed, with a lot of information, which the average manager is unaware of. For instance, information on the infrastructural challenges in India or the potential of lack of future skilled (qualified) resources in India! The book is practical in that it offers managers a set of activities and interventions that they might (and should) consider. For example, how does one build competencies for market development or research and development in India and China? The authors use their crystal ball and chart out possible scenarios to guide managers as to how these two countries, and the relationships between them, might advance in the next five years.
The book is easy to read, well-structured, and has adequate illustrations which superbly capture the textual details. The book begins by examining China. Chapter 1 paints a sobering picture of the challenges faced by this global superpower. Chapter 2 details the IT infrastructure issues in China. Chapter 3 outlines the courses that China might embark on to 2012. The authors assign probabilities to each of these courses and outline guideposts that can be monitored to gauge outcomes. Chapters 4-6 conduct a similar exposition of India. Chapter 7 argues for the concept of ChinIndia that is seen as the r outcome if the two superpowers expand their collaboration powers. Chapter 8 details why ChinIndia is a real possibility and what are the driving forces behind this. Chapter 9 outlines priorities for organizations who want to be relevant in terms of competing in India or China, or ChinIndia, and even tapping into this growing marketplace for resources.
Overall, An excellent book….
Posted by Kevin C. Desouza at 7:24 PM
Sunday, August 05, 2007
I am at the Annual Meeting of the Academy of Management in Philadelphia. I have had a great time so far. Most of the time has been spent meeting with my students, colleagues, and new friends…I will post a complete reaction to the meeting upon my return to Seattle…Tomorrow, I take part in a panel called - Transformation, Change, and Organizational Development: Creating a Global Academic Endeavour (at 10.40 a.m. (EDT)). The panel is chaired by Ashley Braganza of Cranfield University. My fellow panel members are: Steve Leybourne; Plymouth U.; Gerard P. Hodgkinson; U. of Leeds; Gavin M. Schwarz; U. of New South Wales; George P. Huber; U. of Texas, Austin; Terry McNulty; U. of Liverpool; and Ray Hackney; Brunel U.
Posted by Kevin C. Desouza at 8:38 PM
Saturday, August 04, 2007
How does one reap the business value out of innovations? This question has puzzled me for the last 24 months. Along with several colleagues, I have been investigating models and mechanisms that firms can use to manage, track, and evaluate the contributions of innovation activities to their business value. Let me say that this no easy feat to accomplish. To date, we have arrived at a mechanism that can be used to measure the business value of innovation (for the interested reader, please contact me for details, or see some of the many talks and presentations that have described our findings, for example - Demystifying the Link between Innovation and Business Value: A Process Framework at the Management Roundtable, July 18, 2007). Given this context, I welcomed the opportunity to read Payback (Harvard Business School Press, 2006) by James P. Andrew and Harold L. Sirkin.
In Payback, the authors, both of whom are senior executives with the Boston Consulting Group, construct the concept of the “cash curve”, as a guide for executives to manage their investments in innovation. The concept is fairly simple, intuitive, and yet helpful. The authors show how to manage critical drivers such as size of investment, speed to market, time to scale, and support costs, so that one can reap the largest payoff out of innovations. The authors describe various measures of business value for innovation beyond cash, such as acquisition of new knowledge, enhancement of brand image, linking to business partners, and energizing employees within the organization.
Overall, I found the book to be very interesting. The most interesting aspect of this book is the discussion on choosing the right innovation model (Chapters 4-6): the integrator, the orchestrator, and the licensor. In these chapters, the authors talk about the various models and how should organizations choose the right model, or a combination of models, to address the various innovation investments they make. The book is good for managers who wan to plan innovation investments. However, this book does not provide a guide whereby to track innovation efforts, the process of innovation (from ideas to prototypes to commercialization) and its effects on the business value of innovation. Put another way, this book will give you a good (or even excellent) understanding of how to manage the investments you make into innovation strategies and efforts. However, once these investments are made, how do you actually manage the innovation process, improve it, and link it to business value is not covered. For those interested in these aspects, I encourage you to review previous posts on this Blog and get involved in our ongoing research efforts.
An excellent read for anyone in the innovation business or even for anyone running a business….
Posted by Kevin C. Desouza at 2:56 AM
Friday, August 03, 2007
Book Review: The Kids are Alright: How the Gamer Generation is Changing the Workplace, by John C. Beck and Mitchell Wade
In my modest opinion, a good book should motivate you, encourage you, challenge you, and even call you to explore new boundaries. This is the barometer through which I judge the quality of books. I have just completed reading the book – The Kids are Alright: How the Gamer Generation is Changing the Workplace, by John C. Beck and Mitchell Wade.
Posted by Kevin C. Desouza at 11:42 AM
Monday, July 30, 2007
Posted by Kevin C. Desouza at 11:54 AM
Saturday, July 28, 2007
Elements of innovative cultures, Knowledge and Process Management, Volume 14, Issue 3 , Pages 190 - 202
An I4I research report has just been published. The paper is titled, "Elements of innovative cultures" and appears in the current issues of Knowledge and Process Management. This paper was an outcome of our I4I research project that examined the best practices of organizations that were successful in building robust innovation programs. Caroline Dombrowski was the project manager for this research paper.
For a copy of the paper, please visit: Knowledge and Process Management (at http://www3.interscience.wiley.com/cgi-bin/jhome/6242)
Dombrowski, C., Kim, J.Y., Desouza, K.C., Braganza, A., Papagari, S., Baloh, P., and Jha, S. “Elements of Innovative Cultures,” Knowledge and Process Management, 14 (3), 2007, 190-202.
Organizational culture is an important determinant of sustained innovativeness and financial performance. Though it is easy to appreciate the important role culture plays in making an innovation successful, it is difficult to change culture. One way of changing culture could be to identify elements of innovative culture and then imbibing the ones relevant to a given organization. In this paper, we have identified, based on past research, eight elements of organizational innovative culture: innovative mission and vision statements, democratic communication, safe spaces, flexibility, collaboration, boundary spanning, incentives, and leadership. We believe that assimilating these elements of organizational culture will enable organizations to support and sustain innovative activities.
Caroline Dombrowski (The Information School, University of Washington, USA), Jeffrey Y. Kim (The Information School, University of Washington, USA), Kevin C. Desouza (The Information School, University of Washington, USA), Ashley Braganza (Cranfield School of Management, Cranfield University, UK), Sridhar Papagari (Department of Information and Decision Sciences, University of Illinois at Chicago, USA), Peter Baloh (Faculty of Economics, University of Ljubljana, Slovenia), Sanjeev Jha (Department of Information and Decision Sciences, University of Illinois at Chicago, USA)
Posted by Kevin C. Desouza at 5:32 PM
I have started reading, IT And the East: How China And India Are Altering the Future of Technology And Innovation (Harvard Business School Press, 2007) by James M. Popkin and Partha Iyengar. Michelle Morgan (Publicist) at Harvard Business School Press sent me a copy of the book for review and comments. I will send in my thoughts about the book as I make my way through it.
Posted by Kevin C. Desouza at 9:19 AM
Friday, July 13, 2007
I have just been invited to serve as a Panelist on the topic of Global Preponderance at the 2007 Bled Strategic Forum: European Union 2020: Enlarging and Integrating. The invitation came from the Minister of Foreign Affairs of the Republic of Slovenia, Dr. Dimitrij Rupel. I have accepted the invitation with pleasure and am excited about the opportunity to contribute my thoughts on this important issue. This is one of the highest honors I have received, and I thank the organizing committee for inviting me. I will be sharing my thoughts on the issue of cultivating global innovation societies, the role of intellectual asset transfer across boundaries, why countries need to consider cooperative innovation systems to work towards greater goals, what are the challenges in establishing these (e.g. immigration, global talents, etc), and what are some of the solutions.
Dignitaries at this event will include: H.E. Mr. Janez Janša, Prime Minister of the Republic of Slovenia, H.E. Mr Nikola Gruevski, Prime Minister of the Republic of Macedonia, Mr Ali Babacan, State Minister for Economy of the Republic of Turkey and Turkey's chief negotiator in accession talks with the EU, Mr Hans van der Loo, Head European Union Liaison, Shell International, Dr Kuniko Inoguchi, Member of the House of Representatives of Japan, among others. The meeting is sponsored by the Slovenian Ministry of Foreign Affairs, Center for European Perspective, Government Communication Office, and the Institute for Strategic Studies.
For details on the conference, please see - http://www.bledstrategicforum.org. The program can be found at: http://www.bledstrategicforum.org/index.php?id=4&lang=en
Posted by Kevin C. Desouza at 10:54 AM
Thursday, July 12, 2007
I was interviewed by Michael O'Sullivan, the West Coast Bureau Chief of Voice of America on the issue of outsourcing. See - US Lawyer Finds Medical Experts in India, Los Angeles, 12th July 2007, http://www.voanews.com/english/2007-07-12-voa84.cfm. The recording of the interview can be found at: http://www.voanews.com/mediaassets/english/2007_07/Audio/mp3/osullivan_legal_medical_outsourcing.mp3
Posted by Kevin C. Desouza at 9:13 PM
Monday, July 02, 2007
Book Review: Hidden in Plain Sight: How to Find and Execute Your Company’s Next Big Growth Strategy, by Eric Joachimsthaler (HBS Press, 2007)
I promised to write a review of the book, so here it goes…This book is a must read for all executives trying to understand why their companies continue to miss the most obvious innovations. Companies, especially incumbent firms, struggle to keep their innovation engines going. I especially found the book to be of interest given my current research on sustainable innovation program. In a research project that I undertook with Ashley Braganza (Cranfield University) and Yukika Awazu (Bentley College), we outlined several reasons why incumbent firms have a hard time sustaining innovation. We also recommended action strategies that these firms could take to be more successful at innovation (see Link).
Joachimsthaler introduces the DIG model for innovation. DIG stands for Demand-First Innovation and Growth. The model is premised on a firm recognizing customer demands, and then structuring demand platforms to meet these needs, followed by devising strategic blue prints to capture the value from these platforms. Joachimsthaler rightly argues that most companies have built up distance between themselves and their customers. Specifically, the average firm does little to understand their customer behavior independent of their products and services. This narrow-minded view of their customers limits the ability of the firm to introduce products and services that become part of the customers’ lifestyles. In today’s marketplace such firms are sure to follow the trajectory towards demise.
I found the DIG model to be interesting for two main reasons. One, it forces firms to place an emphasis on getting to understand their customers intimately. Two, it also forces the firm to structure its processes, policies, rules, etc around capturing customer needs, rather than around aging bureaucratic practices.
Joachimsthaler does an excellent job walking the reader through the DIG model. The book has a number of case studies from State Street to Frito Lays, and GE to BMW. In addition, the book is easy to read and follow. The book begins by discussing the case of Sony and how the iPod revolution caught the company by surprise. The DIG model is introduced next, and successive chapters walk through the various components of the model. The concluding chapter of the book discusses how to embed innovation into the corporate fabric.
I do not want to give away too much about the book (I know as an author that seeing your book sell is important!), so will stop here…Overall, a must read…I surely enjoyed it…
Posted by Kevin C. Desouza at 9:34 PM
Monday, June 25, 2007
A very positive review of my book has been published in the current issue of Knowledge Management Research & Practice (Palgrave Macmillan, 2005).
Knowledge Management Research & Practice (2007) 5, 71–72. doi:10.1057/palgrave.kmrp.8500122
New Frontiers of Knowledge Management
Kevin C. Desouza (Ed)
Published by Palgrave Macmillan, Basingstoke (UK), New York (USA), 2005,
ISBN-13: 978-1-4039-4240-1, ISBN-10: 1-4039-4240-4, 275pp
Reviewed by, Yanqing Duan of the University of Bedfordshire Business School, U.K.
New Frontiers of Knowledge Management is a contributed volume edited by Kevin C. Desouza. The book contains a collection of 12 chapters, which cover a range of topics focusing on the new frontiers in knowledge management with creative thinking, novel insights and innovative ideas. Any attempt to edit a book on 'the new frontiers' of this multi-disciplinary and widely debated field would be a challenge. Therefore, the editor should be commended on his attempt.
The book starts with an excellent introduction by the editor, which is a must read section for any reader before embarking the rest of the chapters. It defines the term 'new frontier' in knowledge management, sets up the rationale for the book and provides a succinct summary of each author's novelty in his/her contribution to the book. The editor stresses the necessity of sharing options and feelings on the new frontiers and highlights his three motivations in pulling together this unique book, which aims to
'provide an avenue for researchers and practitioners to be adventurous, venture out, and postulate some of their creative thinking.'
'assemble authors who would cross the local space and write on knowledge management in an integrated fashion' and
'seek out some of the new insights and provide an avenue for them to be presented.'
There is no doubt that the editor has achieved the above by providing an opportunity for knowledge management scholars and practitioners to share and exchange their insights and views and be explorative in seeking new ideas and innovative development.
Topics covered in the book include: science and technology knowledge management, knowledge visualization, personalizing knowledge delivery services, knowledge security in organizations, knowledge markets, software artefacts for knowledge management, ubiquitous computing in networked organizations, collaborative enterprises, knowledge flow dynamics, knowledge integration in teams, the role of incentives in knowledge transfer, and innocuous knowledge management.
The book is a mix of debates from social, organizational, technological and economic perspectives, all aiming to offer their thoughts and insights in addressing knowledge management challenges and problems, and attempting to seek new solutions. The strength of the book lies in its diversity, quality, depth and the authors' employment of multi-disciplinary perspectives in their treatments.
For example, from an organizational perspective, Chapter 5 addresses knowledge security in organizations in three focused areas: people, products and processes; and Chapter 10 draws from knowledge flow theory to develop a multi-dimensional model to inform organizational design. From a more technological point of view, Chapter 13 argues the value of innocuous knowledge and explores the management of innocuous knowledge with distributed knowledge networks. The discussion on how market mechanisms can help facilitate knowledge management in Chapter 6 and the role of incentives in knowledge transfer in Chapter 12 offers different aspects of arguments from an economic dimension. Chapter 9 argues the importance of collaborative enterprise from a more humanistic aspect and proposes a generic framework for collaboration, which incorporates the influential factors and the types of capability that needs to be developed.
Most of the authors set forth their arguments on addressing knowledge management problems and challenges from mixed perspectives of social, organizational and technological dimensions. For example, Chapter 2's contributors share their insights on science and technology management emphasizing the conversion of technical textual data to technical knowledge; Chapter 3 emphasizes the importance of making knowledge visible and postulates how this can be achieved; Chapter 4 addresses the challenges in personalizing knowledge delivery services, arguing that knowledge is emergent and needs to evolve based on its particular context; Chapter 7 explores the diversity of software artefacts use in supporting information and knowledge management through the four analytical lenses of interaction, interpretation, connection and collaboration; Chapter 8 argues the potential impact of the ubiquitous information environment (UIE) and proposes a framework for studying the UIE technologies and invites more research in this area; and Chapter 11 explores knowledge integration processes within teams and tests the link between a team's human capital and its knowledge integration competency with case analysis.
For any edited book on new frontiers, the selection of contributors would be critical to its attraction and success. A number of respected scholars and renowned executives in the knowledge management field, especially from America, have contributed to the book. The contributions from both academics and practitioners should be particularly appreciated by readers. However, out of 12 chapters, apart from two from the UK and one from Denmark, the rest of the authors are mainly based in the USA. The heavily American-based contributions may be seen as a weakness in offering a comprehensive reflection of thoughts on future directions worldwide.
In a similar way to most edited books, the collection of chapters represents a mix of depth, length and style. Readers may find that some chapters are better argued and in more depth than others. Others may challenge the novelty, significance or the 'eligibility' as a new frontier in certain topics. It can also be argued that some important or emerging topics may have been left out, such as dealing with culture and trust, dealing with tacit knowledge, transnational knowledge transfer in the global economy, communities of practice, intelligent knowledge systems, etc. However, one of the purposes of the book, as the editor stressed in his opening page, is for 'interested readers to embrace or criticize, to build on or refute, and above all to share' the contributors' views. To this end, the editor's effort can be well justified. As it is not possible to include all new frontiers in one book, the reviewer acknowledges this limitation. The book serves as a call for attention to the continuous effort in seeking new frontiers in this evolving field.
Overall, the editor has done a good job in terms of quality, depth and range of the papers collected. The book makes a unique contribution to the knowledge management literature and is a valuable source of innovative ideas and rich insights on advancing the understanding and achievement in knowledge management. Most of the chapters are well argued and easy to follow, although some of them may be more intellectually demanding for readers to digest. The book would not be recommended as a textbook for students, but is a useful reading for both knowledge management academics and practitioners who would like to further their thoughts on new directions and understand the implications of the new developments. It will also be particularly beneficial to new knowledge management researchers who seek inspiration and thought-provoking debates in their projects and research. I find the book an inspiring, and enjoyable read and hope that KMRP readers will feel the same.
Posted by Kevin C. Desouza at 12:18 AM
Monday, June 18, 2007
Friday, June 15, 2007
The Management Roundtable -- Demystifying the Link between Innovation and Business Value: A Process Framework
I will be delivering a talk on innovation for The Management Roundtable. This talk will draw on our ongoing work in the area of innovation. The talk will focus on the development of the innovation process, measuring the process, and linking the process to business value metrics.
For details, please see - http://www.roundtable.com/Event_Center/Audiocons/Desouza/Desouza0707.html
Two universal truths underpin most business operations: (1) unless businesses can demonstrate value to their stakeholders on a consistent basis they will lose customers and markets, get overrun by the competition, and eventually become extinct, and (2) to generate business value, an organization must constantly innovate, and do so in an effective and efficient manner.
Innovation is a crucial component of business strategy, but the process of innovation can be difficult to manage. To plan organizational initiatives or bolster innovation requires a firm grasp of the innovation process. Few organizations have transparently defined such a process.
In this presentation, Kevin will offer a process framework and propose mechanisms to measure the value of innovation. The innovation process will be broken down into the discrete stages of idea generation and mobilization, screening and advocacy, experimentation, commercialization, diffusion and implementation. For each stage, he will provide context, outputs and critical ingredients as well as mechanisms to measure performance. Kevin will finish by linking these measures to business value measures.
Specifically you will learn:
- the stages of innovation -- from creating ideas to commercialization -- and diffusing and implementing products and services
- how successful organizations conduct activities in each of the stages
- how to measure process performance and improve its maturity
- how to link the innovation process to business value measures
Dr. Kevin C. Desouza is on the faculty of the Information School at the University of Washington. He is also an Adjunct Assistant Professor in Electrical Engineering at the College of Engineering. He serves as the Director of the Institute for National Security Education and Research, an inter-disciplinary, university-wide initiative. He is also Director and founding faculty member of the Institute for Innovation in Information Management (I3M) and is an affiliate faculty member of the Center for American Politics and Public Policy, both housed at the University of Washington. His immediate past position was as the Director of the Institute for Engaged Business Research, a think-tank of the Engaged Enterprise, a strategy consulting firm with expertise in the areas of knowledge management, crisis management, strategic deployment of information systems, and government and competitive intelligence assignments.
Dr. Desouza has authored Managing Knowledge with Artificial Intelligence (Quorum Books, 2002), co-authored The Outsourcing Handbook (Kogan Page, 2006), Managing Information in Complex Organizations (M.E. Sharpe, 2005) and Engaged Knowledge Management (Palgrave Macmillan, 2005), and edited New Frontiers of Knowledge Management (Palgrave Macmillan, 2005) and Agile Information Systems (Butterworth Heinemann, 2006). His most recent book is Managing Knowledge Security (Kogan Page, 2007). In addition, he has published over 130 articles in prestigious practitioner and academic journals.
Dr. Desouza has advised, briefed, and/or consulted for major international corporations (e.g., Boeing, Microsoft, Accenture, the American Productivity Quality Center, etc.) and government organizations (e.g., the Office of the Director of National Intelligence, the Department of State, the Department of Veterans Affairs, etc.) on strategic management issues ranging from management of information systems, to knowledge management, competitive intelligence, government intelligence operations, and crisis management.
Posted by Kevin C. Desouza at 4:10 AM
Friday, June 01, 2007
Posted by Kevin C. Desouza at 10:02 AM
Monday, May 28, 2007
I will heading to England for a few weeks starting on June 9 and returning on June 25.
I will serve as a faculty mentor for the IFIP 8.6 Doctoral Consortium (http://www.ifip86-2007.salford.ac.uk/) to be held in Manchester, UK. Bob Galliers (Bentley College) is the Doctoral Consortium Chair. Bob has done an excellent job in selecting an eclectic group of students who have diverse research interests and aspirations.
In addition, I look forward to meeting up with several of my European Colleagues during the month of June. I plan to spend a few days in Manchester, then head to Oxford, and finally spend a week in London before coming back to Seattle…
Posted by Kevin C. Desouza at 11:23 AM
Wednesday, May 23, 2007
How well do you protect your innovations? Most organizations lack good measures to develop protective measures to secure their innovations. As a result, these organizations fail to reap adequate rents from their investments. Before costs, and even normal profits, can be earned an organization may see its innovation being imitated by competitors through reverse engineering. Some organizations even face leaks of information when working on sensitive projects thereby alerting competitors of their strategic motives. How secure is your knowledge (and innovations)?
My new book, Managing Knowledge Security (Kogan Page, 2007), tackles this question from a pragmatic perspective. I have devised, participated in, and even managed, intelligence assignments for several private and public organizations. These assignments involved testing protective measures for securing knowledge, identifying leaks of information, gathering data on competitors, among other activities.
Orders are being taken on Amazon and other retail websites…Early orders receive a nice discount as well…
Posted by Kevin C. Desouza at 2:30 PM
Thursday, May 10, 2007
What have I been doing these days…Well, nothing major…Let me give you a run down of my last two days…
I was in Houston for APQC’s 12th Annual Knowledge Management Conference and Training: Knowledge Management and Innovation (www.apqc.org). On the evening of the 9th, I had dinner with Robert (Bob) H. Buckman [Retired Chairman of the Board, Bulab Holdings] and his daughter Katherine Buckman Gibson [Chairman of the Board, Bulab Holdings]. I have known Bob for about 2 years now. The two of us get excited about two topics– knowledge management and organizational innovation. This was my first meeting with Kathy. Kathy is a delightful person. She is guiding Buckman Labs into an exciting future. During dinner, we discussed a number of issues ranging from organizational innovation issues, to information disconnects and organizational fragmentation, cross-cultural issues, and the School of Information of the University of Washington.
[P.S. the Olivette restaurant at the Houstonian is wonderful…if you get a chance, go by and have a meal…delightful!]
After dinner ended, I met up with Roberto Evaristo, a long-time colleague, collaborator, and friend. Roberto is playing an active role in the KM Program Office of 3M. We indulged in a few choice liquids, and spent the time getting caught up on various happenings in our lives.
May 10: I got on a conference call at 6 AM, and barely had chance to check my emails. Then, it was breakfast with Roberto. During breakfast we had a chance to discuss business, and get ready for our talk. After breakfast, we headed to the conference. I got a chance to catch up with several colleagues (there are too many to name but here are a few…Gerry Swift, Darcy Lemons, Carla O’Dell, Marisa Brown, Louis Archuleta, Ann Majchrzak…).
I then attended a talk given by Jimmy Wales, founder, Wikipedia.org, and chairman, Wikia.com. Jimmy talk was engaging, thoughtful, and creative. The talk focused on the development of Wikipedia, its current state, the future plans. I learnt a lot from the talk. One of the things that I will use in my classes is the concept of designing technology by thinking about how one would design a restaurant. Jimmy went on to talk about how students are using Wikipedia for their term papers. To all my student readers: do not use Wikipedia as a reference, just like you would not use Encyclopedia Britannica. Wikipedia should be used to help you gain deeper knowledge about a topic and also to identify primary and secondary sources for further consultation.
The next item on the agenda - Organizational Innovation Processes: The case of 3M, a presentation by Kevin C. Desouza and J Roberto Evaristo. I opened the presentation by setting the stage for the innovation process framework. Roberto then examined each stage of the process and cited practices in place at 3M for conducting activities in each stage. An engaging Q&A session followed (we ran over our allotted time!).
Then, my taxi was waiting, and I headed back to the Airport to fly back to Seattle…
All in all, a fairly calm and uneventful two days…
P.S. I am writing this Blog entry while on my flight back to Seattle…A good way to spend time…currently we are at 30,000 feet and beginning our descent into SEATAC…
Posted by Kevin C. Desouza at 9:44 PM
Saturday, May 05, 2007
Nina Yuttapongsontorn (a graduate student at the Information School, UW) and I have completed a case study paper - Understanding the Complexities of Innovative Technology Project Failure: The Case of the Seattle Popular Monorail Authority.
The proposed Seattle Popular Monorail was one of the largest public works projects ever proposed in the city of Seattle. Three years after this proposal, the Seattle Monorail Project was shut down by voters. This paper studies the history of the plan, the challenges the plan’s proponents were confronted with, criticisms and reactions, and reasons for the plan’s failure. It is interesting to note that the City of Seattle has had experience in monorail projects. Seattle’s original monorail was one of the world’s first modern monorails, and it was the first full-scale monorail system in the US. It was built in 1962 for the Seattle Century 21 World’s Fair and cost $3.5 million. The 1.2-mile-long monorail was built in only 10 months. During the six months of the fair, the trains carried more than eight million guests and easily earned back its initial capital construction costs in just five months. Today, the trains carry more than 2.5 million riders each year, and it still operates at a profit after forty years of operation. Yet the City of Seattle could not repeat this success with the Seattle Popular Monorail.
Posted by Kevin C. Desouza at 1:50 PM
Tuesday, May 01, 2007
Information Communication Technologies (ICTs) are no longer just for internal use. Rather, in the era of open and distributed innovation ICTs must be leveraged by businesses and organizations to reach, record and review ideas from internal and external sources ranging from vendors, suppliers, customers and employees. Interacting with all stakeholders improves the quality and consistency of ideas. ICTs enable this process at all levels through inclusion and interaction. This paper explores specific ways that ICTs can be used to enable the entire innovation process: from idea generation and development, to experimenting and testing, and finally, to commercialization of ideas.
In particular, ICTs enable management of sources of ideas, documentation of idea histories, distribution and sharing of ideas, market targeting and organic idea development. Successful practitioner examples and specific technologies are discussed in context to outline opportunities and trends in the new era of open, distributed, ICT-enabled innovation. The emerging trend of distributed and open innovation illustrates that customers and users are no longer passively waiting for products. Widely connected, interactive and collaborative practice of innovation will provide a competitive edge to the corporations that carefully select and deploy ICT strategies.
Posted by Kevin C. Desouza at 7:59 AM
Monday, April 23, 2007
Most strategic decisions require significant investments and therefore it is critical that organizations manage these investments carefully for continued growth and survival of firms. Pursuing innovations are strategic decisions too, especially strategic innovations, which are product or process innovations with unproven business models that have potential to change the rules of the existing business. What separate strategic innovations from regular product or process improvements is the degree of expense of a single experiment, the duration of each experiment, and the ambiguity of results. Strategic innovations require huge investments, over a long period of time, and with uncertain financial rewards. The rewards, however, of successful strategic innovations can be manifold: high growth in revenue and profitability, market dominance, and renewed faith of investors and analysts. A few of the celebrated examples of strategic innovations are: online book retailing by Amazon, direct selling by Dell, introduction of mini-mills by Nucor, low cost no-frills airline service by Rynair.
Strategic investment decisions, like strategic innovation, have three important characteristics. First, the investments made are either partially or fully sunk and cannot be recovered, in other words investments are irreversible. Second, returns on these investments are uncertain or the future benefits from investments are uncertain. Third, organizations have some flexibility with respect to the timing of the investment, or timing of different phases of investments. A good example of strategic innovation, showcasing the above three characteristics, can be of pharmaceutical companies entering into alliances with biotechnology companies and universities. Pharmaceutical companies invest into research projects led by biotechnology companies or universities and these investments are irreversible and the outcomes of most of these projects are uncertain. The development phase of these projects run up to a decade before commercialization can begin. Therefore, most of the alliance contracts have provision of payments over a period of time depending upon the successful progress of the project. If the projects do not show promise of product development and commercialization, the contracts have provision of stopping future investments. This flexibility in investment decisions limits exposure to risks while providing opportunity to invest further based on future assessments. These characteristics of strategic investment decisions make them especially relevant to be analyzed through real options approach.
Real option approach to investment decisions can be discovered in various settings and we discuss two of them here to showcase its applicability to wide range of situations. The two examples which employ real options thinking are hiring of professors and the process of awarding grants by National Science Foundation (NSF). There seems to be a real options thinking in the way academia generates knowledge by hiring professors. Most professors come in with a limited contract and then they need to show promise in the development of new ideas and knowledge. If they are successful the contract options are renewed (i.e. most untenured professors start out with a 3 year contract and then it is extended for another 3 years). Upon successful demonstration of innovative capabilities and output – tenure is given. The other interesting example of real option thinking is the process of awarding grants by NSF. NSF gives out grants, for exploratory projects, then they may choose to continue their investment if initial results are found to be acceptable or else stop further investments if the project does not show promise. This restricts wastage of resources to initial funding and provides opportunity to work with applicants incase the projects become worthwhile.
[Posted by: Sanjeev Jha]
Posted by Kevin C. Desouza at 9:55 AM
Friday, April 20, 2007
I have now had three days to reflect on the I3M symposium. The symposium was exciting and stimulating. I gained a lot from the informal discussions with an eclectic group of executives. There were executives who asked me pointed questions which helped me refine my thinking. Some others asked me to share more detailed accounts of case findings. Yet, others asked if they could help out in future research. What was most interesting is the fact that no two executives asked me the same question. This is probably the first time this has ever happened. Each executive shared questions from their vantage point, and the audience was truly diverse. Here are a few key themes that kept emerging from various discussions:
1. Balancing risks and rewards in innovation – how should organizations manage a portfolio of ideas so as to gain maximum returns. Moreover, how should an organization fund innovative ideas? The possibility of using real-options as a framework was brought up several times.
2. Measuring the innovation process – how do we measure the performance of the innovation process, do we measure the process or the output, do we use qualitative or quantitative methods, do we measure using the unit of analysis of a firm, unit, or group…the answer, we use a combination of metrics and personalize metrics for different problems
3. The difference between large (public) and small (private) firms in terms of their innovation capabilities…are there differences, are there differences in the diversity of ideas they pursue, etc
4. The role of culture in innovation…my thoughts on this was that culture is determined by innovation capacities and not the other way. Too often, we use (organizational) culture too loosely and inappropriately. Yes, having the right culture is important, but creating the culture for innovation is also important.
5. How does legal oversight and regulations impact innovation…A lively discussion on this topic took place…my answer, laws are meant to be broken and they are always a step behind…being innovative helps you be ahead of the laws and find creative, and legal, ways to get your work done…Not the most politically correct response, but my opinion…
Overall, exciting day and I thank all those who attended…it was good fun…Cheers!
Posted by Kevin C. Desouza at 8:31 AM
Tuesday, April 17, 2007
We had an exciting day yesterday…By all accounts, the I3M Symposium was a success. The morning started with a keynote presentation by Phil Fawcett of Microsoft Research. This was followed by our research presentation – Demystifying the Link between Business Value and Innovation. This was followed by a panel discussion exploring the various issues surrounding innovation and business value. The evening concluded with presentations on potential research projects, and a wine and o' devours reception. A more detailed note on the symposium will be posted soon…
Posted by Kevin C. Desouza at 7:55 AM
Saturday, April 14, 2007
My doctoral student, Peter Baloh (http://www.baloh.net/), from the University of Ljubljana (Slovenia) is in Seattle. He is here to attend the I3M (Institute for Innovation in Information Management) Spring Symposium. Peter has been working with me on issues of strategic innovation and knowledge management. Peter was a lead contributor one two i4i papers. The first paper examined the role of ICTs (Information and Communication Technologies) in innovation. The second paper examined strategies used by organizations to innovate with their business partners. In addition, Peter contributed to our papers on customer innovation and communication strategies for innovation.
Peter took a few pictures as I was giving him the tour of the UW.
Posted by Kevin C. Desouza at 8:27 PM
Friday, April 13, 2007
We have been cited again…See BusinessInnovationInsider.com (http://www.businessinnovationinsider.com/2007/01/understanding_hewlettpackards.php). BusinessInnovationInsider.com has several interesting posts about innovation practices in leading organizations.
Posted by Kevin C. Desouza at 1:11 PM
Sunday, April 08, 2007
Innovation affects all aspects of a business, from operational procedures to strategic goals. Because of the widespread, often dispersed nature of innovation projects, it can be quite difficult to establish methods of communicating the business value of successful innovation projects. Innovation projects may have delayed costs or benefits, sometimes have unexpected effects on other aspects of the business and can change the culture or use of resources at an organization in ways difficult to measure and difficult to communicate. While working on an innovation project, new knowledge may be discovered that is not immediately usable to the project but which can lead to future efforts and open up new markets. For instance, Pasteur was working on a solution to prevent beer from becoming stale when he discovered the principles underlying fermentation, which led to understanding of microbiology and eventually antibiotics, one of his major contributions to science. Innovation projects can also lead to a culture of energy and high enthusiasm which can stir creativity and increase the likelihood of the firm to hire new talented people -- the most common example of this is the environment at Google.
In addition, strict return on investment (or ROI) measures are notoriously bad at uncovering the true business value (or BV) of innovation. ROI evaluates resources allocated to a project and the return upon those resources, but innovation rarely has easily identifiable returns. Innovation often affects many aspects of a business and can underlie perceptual shifts as well as altering levels of efficiency and sometimes competitive advantages. For these reasons, accurately measuring the resources saved, gained or developed because of innovation projects is nearly impossible. In addition, innovation projects involve a degree of uncertainty and adaptation. Discussions of innovative projects usually revolve around promises, risks and opportunities, not around concrete examples or assurances. For this reason, communication about innovative projects needs to be carefully thought out to encourage innovation while hanging onto a healthy dose of skepticism and evaluation.
We will be presenting our findings from the BVI research project at the I3M symposium on April 16 at the University of Washington. To learn more about how to successfully communicate the business value of innovation, please stay tuned for our research paper and we also look forward to seeing you at our symposium [see http://projects.ischool.washington.edu/i3m/].
Posted by Kevin C. Desouza at 6:19 PM
Monday, April 02, 2007
Infosys Technologies (the Technology and Outsourcing Giant) maintains a series of blogs. These blogs talk about various issues related to IT, outsourcing, and innovation. One of their blogs, Managing Offshore IT (http://infosysblogs.com/managing-offshore-it) cited our work on Outsourcing Innovation. The post More Companies Outsourcing Innovation: But what does it mean to you? (http://infosysblogs.com/managing-offshore-it/2007/04/more_companies_outsourcing_inn.html#more), discusses the changing nature of outsourcing innovation. We are working on a project called Managing Risks for Rewards: The Case of Outsourcing Innovation (we call it IRO). Stay tuned for more details…
Posted by Kevin C. Desouza at 4:37 PM
Executives from CSC Corporation...
Executives from Ethicon Endo-Surgery (a Johnson & Johnson Company)...
Executive from Boston Scientific...
Executives from Air Products and Chemicals, Inc...
Posted by Kevin C. Desouza at 4:08 PM
Saturday, March 31, 2007
The core paper of our first research project, Leveraging Ideas for Organizational Innovation, is featured in the current issue of Sloan Management Review.
Mariello, A. “The Five Stages of Successful Innovation,” Sloan Management Review, 48 (3), 2007, 8-9.
Posted by Kevin C. Desouza at 8:59 AM
Friday, March 30, 2007
I just returned back to Seattle from Houston!!! While in Houston, I spent two days with an eclectic group of senior executives discussing the ins and outs of building innovation programs. A diverse group of organizations was present at the meetings – Accenture, BD, Boeing, Deloitte & Touche USA LLP, Fisher-Price Inc., Northrop Grumman Corporation, Occidental Petroleum Corporation, Praxair Inc., Aramco Services Company, Siemens AG, U.S. Army, Army Research Laboratory, U.S. Army, ARDEC, U.S. Army, TARDEC, U.S. Department of State, U.S. Government Accountability Office, U.S. Navy, Carrier Team One, IBM, Air Products and Chemicals Inc., Boston Scientific, Computer Sciences Corporation, Ethicon Endo-Surgery, and Hewlett-Packard.
I had the distinct pleasure of giving the opening and closing talks during the two days. My opening talk focused on strategic actions and issues that organizations need to consider while building sustainable innovation programs. To close the meeting, I addressed how managers should turn ideas into action for business value.
Posted by Kevin C. Desouza at 6:34 PM
Wednesday, March 28, 2007
Along with Yukika Awazu and Arkalgud Ramaprasad, I have a new paper that was just published:
Desouza, K.C., Awazu, Y., and Ramaprasad, A. “Modifications and Innovations to Technology Artifacts,” Technovation, 27 (4), 2007, 204-220.
What happens to a technology artifact after it is adopted? It has to evolve within its particular context to be effective; otherwise, it will become part of the detritus of change, like the many genes without a discernible function in a living organism. In this paper, we report on a study of post-adoptive behavior that examined how users modified and innovated with technology artifacts. We uncovered three types of modifications made to technology artifacts: personalization, customization, and inventions. Personalization attempts are modifications involving changes to technology parameters to meet the specificities of the user; customization attempts adapt the technology parameters to meet the specificities of the user’s environment; and inventions are exaptations conducted to the technology artifact. This paper presents a grounded theoretic analysis of the post-adoptive behavior based on in-depth interviews with 20 software engineers in one multi-national organization. We identify a life-cycle model that connects the various types of modifications conducted to technology artifacts. The life-cycle model elaborates on how individual and organizational dynamics are linked to the diffusion of innovations. While our research is exploratory, it contributes to a deeper understanding of post-adoptive behavior and the dynamic relationship between user innovations and organizational innovations.
Posted by Kevin C. Desouza at 2:00 AM
Tuesday, March 27, 2007
Measuring innovation requires an organization to have a well-articulated innovation process. Without a process, measurement is impossible. During our research, we arrived at the following stages of innovation: (1) generation and mobilization, (2) advocacy and screening, (3) experimentation, (4) commercialization, and (5) diffusion and implementation. For each of these phases, we identified underlying capabilities that an organization must execute: (1) sources management, (2) analytics management, (3) interpretation management, and (4) action management. These capabilities are comprised of a series of activities. For instance, in sources management, (a) Identifying Sources, (b) Evaluating Source Characteristics, (c) Organizing Sources, (d) Retrieving Ideas from Sources, (e) Updating the Collection of Sources, and (f) Protecting Sources.
Once we are able to make the process of innovation explicit, we can develop measures for the process. We start by measuring the activities, then build composites for measuring capabilities, which in turn will help us measure each stage, and then the overall innovation process.
Using these measures, we can link innovation to business value measures, from process to output, and value measures.
More details will be forthcoming as we begin to release our working papers.
Posted by Kevin C. Desouza at 6:52 PM
In the 18th century, the renowned physicist Lord Kelvin remarked, “To measure is to know” and “When you can measure what you are speaking about, and can express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, then your knowledge is of a meager and unsatisfactory kind”. Although he was not speaking about the field of knowledge and innovation management when he made these statements, there may be no better field for which these statements hold true, and his words may easily be applied to that which is missing from the extant literature on knowledge management.
There is a conspicuous absence of models to evaluate such efforts. A major concern for scholars and practitioners is how to measure the status of knowledge and innovation management in an organization –– i.e., its strengths and weaknesses Managers today have to rely on anecdotal descriptions to justify investments. Without a meaningful framework for describing its trajectory, knowledge, and innovation, management is viewed by many as a mere fad.
During the I3M meeting in April, I will be presenting our model for measuring the innovation process and linking it to business value...
Posted by Kevin C. Desouza at 6:40 PM
Saturday, March 24, 2007
I will be giving a talk to the Pacific Northwest Chapter of the Special Libraries Association. The talk is titled, “Contradictions in Innovation: The Critical Role of Librarians”.
In order to innovate, organizations must find ways to manage their knowledge. Knowledge need to be created, utilized, shared, duplicated, and commercialized. However, the very same knowledge must also be protected and secured. Herein lies the contradiction: to share or not to share. How do we build organizational mechanisms where knowledge can be shared, while being secured! More importantly, how do we retain the high-energy and enthusiastic culture required for innovation, while still being respectful of the needs for security and compartmentalization? I will draw on examples from government intelligence operations, innovation programs in large organizations, and even my own entrepreneurial experiences to draw some tentative conclusions.
Posted by Kevin C. Desouza at 8:00 AM
Wednesday, March 21, 2007
I will be presenting some of our findings at the APQC(American Productivity Quality Center) Knowledge Transfer Session meeting next week in Houston, Texas. APQC is a strategic partner on our research efforts. All sponsors of the APQC research project will receive copies of our research papers. I have enjoyed engaging with APQC as a Subject Matter Expert on their study – Successfully Embedding Innovation: Strategies and Tactics.
Posted by Kevin C. Desouza at 5:11 PM
Sunday, March 18, 2007
Posted by Kevin C. Desouza at 5:31 PM
Tuesday, March 13, 2007
We have another paper ready for submission to a journal – “Sustaining Innovation: The Challenge for Incumbents”. The authors of the paper are Ashley Braganza (Cranfield University, UK), Yukika Awazu (Bentley College), and Kevin Desouza (University of Washington)
In today’s competitive environment, the ability of an organization to innovate is considered paramount. While most organizations have flashes or spurts of innovation, only a handful of organizations have been able to innovate on a continuous and sustained basis. In this paper, we report on the challenges faced by firms when trying to build sustainable innovation programs. These findings have been deduced from an examination of innovation programs in over 30 organizations based in the North America, Europe, and Asia.
In the paper we analyze issues such as the inhibitors of innovation (e.g. pursuit of stability, risk avoidance, bounded by experience, lack of requisite variety, etc). In addition, we outline several interventions, including the portfolio approach to allocating resources for innovation, training managers to be innovators, communicating the value of innovation, among others.
Posted by Kevin C. Desouza at 9:00 PM
Monday, March 12, 2007
On February 28, 2007, I visited the Computer Sciences Corporation (CSC) (http://www.csc.com/) at Falls Church branch. Founded in 1958, CSC has been a pioneer of IT service organization. CSC is a large global organization that has approximately 77,000 employees in 80 countries worldwide. CSC is a large company that has a decentralized structure. Although almost 50 years has passed since CSC was founded, CSC is still one of the innovative companies. The purpose of my visit is to find out their secrets about how they preserve innovative culture such a long time. The following three points are those I thought interesting.
Point 1: CSC has a unique virtual central unit called The Office of Innovation. The role of Office of Innovation is to identify and finance ideas generated by business units (or individuals in those units) and help those ideas to be implemented. They host several awards such as Technical Excellence Awards, etc.
Point 2: CSC preserves its innovative culture. CSC employees know that CSC was founded as a pioneer of IT services. As the name "Computer Science" Corporation indicates (in 1950's, the term "Computer Science" was not much popular) that CSC is always seeking innovative solutions.
Point 3: CSC utilizes various types of ICTs for various purposes. For example, they still utilize Lotus Notes, since Notes are accessible by all employees in CSC. At the same time, they conduct trial and error of new ICTs such as Wikis.
For large organizations, it is difficult to embed innovation. Lessons learned from CSC's practice are 1) keep flexible organizational forms that combine both traditional forms and network forms, 2) establish or keep innovative culture, and 3) utilize ICTs as possible as you can.
[Posted by: Yukika Awazu]
Posted by Kevin C. Desouza at 7:58 PM
Tuesday, March 06, 2007
We have a new paper ready for submission - Building Partnerships for Innovation
In a business environment characterized by the development of deep, niche expertise in a particular domain, business partnerships can provide a source of innovative rejuvenation. This paper aims to uncover how organizations engage in innovation with business partners through exploratory multiple case study of over 30 innovative European and US companies. Data collection involved 50 semi-structured interviews with senior representatives from R&D, product management, information technology, and marketing. The interview data were complemented by desk research: analysis of corporate reports and validated in follow-up sessions. Three complementary models of business partner innovation emerged: acquisition, strategic alliances, and open source. These can be used in a portfolio manner by organizations with sustainable innovation programs. Organizations make strategic, project-based choices. Based on the three models, we propose a three-dimensional “Co-Innovation Space”, in order to analyze existing innovation project portfolios and/or to plan what kind of innovation approach a company may take within the near future.
Table 1 from the Paper:
Posted by Kevin C. Desouza at 4:25 PM
Tuesday, February 20, 2007
Chicago is my kind of town! I spent the last few days in the Windy City. While my primary reason for the visit was to continue to gather data for our ongoing research project, BVI (Demystifying the Link between Innovation and Business Value), I did have time to do other interesting things (e.g., eat some good food and catch up with old friends).
On a business related matter, I gave a talk to the students at DePaul University (www.depaul.edu) as part of an executive panel on outsourcing (http://facweb.cs.depaul.edu/yele/CIO-annual-events/2007winter/program.asp). Professor Olayele Adelakun (http://facweb.cs.depaul.edu/yele/) invited me to address his students and guests. I thank him for doing this.
I had the distinct pleasure of giving the opening talk for the panel; the topic I chose to speak about was the future of outsourcing, titled, "Strategic Sourcing: Sourcing of Innovation." For the talk, I drew on material from our forthcoming research project, IRO (Managing Risks for Rewards: The Case of Outsourcing Innovation), and our current project, BVI, along with findings from our past project, I4I (Leveraging Ideas for Organizational Innovation). An excerpt from my talk:
Outsourcing programs are becoming more complex. One aspect of the complexity comes from the kind of work that is being outsourced. Once, companies only outsourced simple, defined, and structured work. Organizations are now venturing into the outsourcing of innovation, and some are even ready to outsource pieces of their core capabilities. Organizations that are prepared to manage these relationships in a strategic manner will survive and thrive in the marketplace.
Some geniuses think they are beyond outsourcing, or even protected from it -- as I recently heard from one executive, "we will never see ourselves outsourcing our [IT] work...we just do not do that." Such thinking is not only dimwitted but immature and shortsighted. Most banks have outsourced large portions of the IT functions; similarly, supply chain functions and HR functions are being outsourced.
Think about this: most defense sectors of nations have begun to outsource the jobs of the military to private contractors. Once, these jobs were sacred and never to be outsourced.
My talk was followed by a presentation from Richard R. Howe (Vice President, Science Applications International Corporation (SAIC)). Richard drew upon his experience in managing outsourcing deals from the perspective of a vendor and provided a lively discussion of the issues that companies face when aligning outsourcing programs. A presentation by John McCord of the Global IT Consulting Group from the PA Consulting Group was next. John discussed results from a recent PA Consulting survey on the state of outsourcing. What caught my attention was the perceptions from the points of view of clients and vendors as to why they engage in outsourcing programs. Seldom do clients and vendors meet eye to eye or agree on what are the drivers of their relationships.
After the three talks, and a small break, we answered questions from the audiences for about 90 minutes. I must say that the audience kept us honest and asked some very interesting and difficult questions. Issues were raised surrounding the management of SLAs (Service Level Agreements), the protection of IP around outsourcing, the political and economic implications of outsourcing, and the management of risks and opportunities around outsourcing efforts. As the evening closed, there was a book signing event: I had the opportunity to sign copies of my book (The Outsourcing Handbook, Kogan Page, 2006). The day ended with Olayele and me, enjoying a few pints at a pub and enjoying the traditional food of Chicago: ribs and steak!
Posted by Kevin C. Desouza at 2:24 PM
Friday, February 16, 2007
Organizations face a daunting challenge in managing the risks associated with the outsourcing of innovation. Most organizations have realized that they cannot reach business goals by conducting all activities internally. Cooperating with business partners and leveraging the know-how found in an organization's midst is a salient determinant of competitive successes. Many organizations struggle to increase the intensity and success of partnerships.
When organizations outsourced only manufacturing, business partners simply assembled raw materials. Business partnerships then moved to simple knowledge work, as was the case when the outsourcing of software development and IS maintenance efforts became popular in the mid-1980s. Today, leading organizations rely on their business partners for innovation and process goals. The outsourcing of innovation involves engaging with business partners in ways that are significantly binding and have strategic implications.
In all the above cases, we notice several interesting things – (1) in innovation-based outsourcing programs both parties are engaged in developing novel products and services, (2) the chances of the two parties successfully meeting their objectives is very low as the project space is undefined and new, with a greater chance of failure, (3) these alliances are premised on the fact that both parties will gain, and if they gain will share the rents and royalties, and (4) the knowledge sharing and intellectual property issues within (and around) these alliances is emerging and sometimes indeterminate.
This research project aims to examine the issues surrounding the management of innovation outsourcing programs. In particular, we seek answers to the following questions:
1. How do organizations make decisions to engage in the outsourcing of innovation? To this end, we will seek to evaluate the various methods that are used by organizations to identify critical areas, capabilities, and spaces for outsourcing. Research into the goals and objectives of outsourcing for innovation can inform executives about potentials for alignment of goals and objectives with outsourcing partners.
2. How do organizations choose business partners for the outsourcing of innovation? This type of partnership is different from finding a business partner for traditional outsourcing efforts, e.g. the sourcing of manufacturing or well-defined knowledge work. Outsourcing of innovation requires finding business partners who have specialized knowledge in a given arena, and business partners who can work in concert with an organization to come up with new products and services.
Being able to manage risks becomes critical here. A traditional, established organization might seem to be less risky, but the value of such an engagement may not be high. Larger firms may be predisposed towards economies of scale, and may not be interested in tailoring efforts to meet the specifics of the organization. On the other hand, an upcoming firm might be riskier, but the rewards might be higher.
3. How do organizations manage issues surrounding the governance of innovation? Issues here include the development of robust knowledge sharing programs that capture all of the information needed to implement and refine innovations that emerge from outside the organization. Furthermore, what are the procedures in place to secure intellectual property during these outsourcing transactions? Finally, what are the models used to share rewards, costs and incentives with business partners?
4. How do organizations manage their portfolio of relationships? Most organizations have multiple relationships and the management of these can be quite tricky. How do organizations develop models to manage these relationships? Some organizations have created an Office of Alliance Management (e.g. Eli Lilly), while others decentralize the management of relationships to functional groups.
5. How do organizations manage the risks associated with outsourcing of innovation? While the outsourcing of innovation has many benefits, it has an equal amount of risks. For instance, what happens if an organization realizes that the business partner has not lived up to expectations? How are issues surrounding new product development managed? What about the case where a business partner acts with guile and compromises the organization’s intellectual assets?
6. What are the critical success factors and drivers behind successful management of outsourcing programs? Are any of the five issues discussed above crucial to all outsourcing for innovation programs? What differences exist in successful outsourcing for innovation, and can we explain those differences based on the data? The ability to scale innovation projects and to sustain long-term business advantages through this kind of innovation requires an understanding of management processes for outsourcing for innovation.
Posted by Kevin C. Desouza at 7:01 PM
Tuesday, February 06, 2007
Innovation can increase revenue growth for a company, and according to Mullen's article, calculating the gains and gaps in innovation can give a company a better idea of where they fall with respect to the competition. Understanding if an organization has an "innovation gap" can illustrate new areas for revenue growth. Part of this process involves democratic participation and brainstorming by employees through content management systems. Innovation can decrease operating costs, lead to new products, improve workplace atmosphere and generally affect all elements of a business and its success.
Mullen's article discusses four components to consider when evaluating for innovation gaps: revenue growth, revenue protection, cost containment and disruptive change. Evaluating these elements can greatly assist organizations in making strategic choices.
For other ways of calculating the monetary value of innovation, see the "smart metrics" listed by Baseline: http://www.baselinemag.com/article2/0,1397,818932,00.asp. They include formulas such as "employee suggestion payoff" which is measured as such:
[($ saved or created by employee suggestions/# of employees)/$ costs of IT to support employee-suggestion system]
These kinds of metrics can help to quantify the seemingly impossible, the effects of both far-reaching and short-term, incremental and radical innovation.
See: Mullen, E. "Calculator: The Money Your Innovation Isn't Making," Baseline, Available here: http://www.baselinemag.com/article2/0,1397,743154,00.asp
[Summary by: Chen Ye]
Posted by Kevin C. Desouza at 8:37 PM
Monday, February 05, 2007
The previous blog entry discussed Boston Scientific and their emphasis on innovation in the domain of medical equipment. Boston Scientific also has a strong program in place to measure and understand innovation and opportunities for innovation. Scott Engle (Director of Emerging Technologies and New Market Development) gave the next presentation. Scott focused his remarks on the methods and metrics used by the organization to identify areas for innovation. His critical point was that the organization needs to be one with its customers. Boston Scientific uses an extensive set of methods to gather ideas and insights from customers, and then uses these to identify areas for new product development. The organization has developed a Customer Perception Matrix to identify and map out customer needs and available products, based on features and drivers. Using this map, the organization can engage in directed innovation.
Another critical points that Scott made was the need to know when an organization has missed opportunities and it is not worth spending the resources to innovate, as a competitor has already secured an advantage.
Richard Traxler (Senior Manager, Technology Planning) gave a highly energetic presentation on the process used by Boston Scientific to conduct evaluations on core versus novel innovation projects. I must say the program that Richard has put in place is by far one of the best that I have seen. Novel projects are put through different review processes than core ones (most organizations still do not do this at all…). In addition, the ways used to start-or-stop these projects, and origination of these projects is also managed differently.
The strong understanding of the innovation process and ways to measure that process were fascinating. Thank you to all at Boston Scientific for sharing your knowledge!
Posted by Kevin C. Desouza at 8:36 AM