Chapters 11 and 17

Chapter 11

Appropriating the Gains from Innovation

This is the final chapter in the section for Strategy. This is a chapter that focuses on the ways a company can maximize the return on new emerging technologies. The beginning of the chapter outlines the importance of Intellectual Property and how it can help and hinder a company. Intellectual property and its focus can shift a company right out of the competition.

That being said, the chapter then goes on to state four mechanisms available and suggested to appropriate gains from a new emerging technology.

o Patents and related legal protection
o Secrecy
o Control of complementary assets
o Lead time

These four areas are important to any company and become more important as a company must deal with emerging or disruptive technologies. All of this chapter discusses how managers can protect their new ideas and generate the most revenue. The author frequently refers to the revenue and profit as being “rent”, interesting.

I find myself thinking about these ideas in the context of what has changed with regard to these four categories. In many ways nothing has changed much. Even when technology was not as significant as today, there were managers of companies who would try to patent their inventions. There were managers who would try to invent around patents. Then a smart company would move to secrecy as a means to develop new ideas. Certainly controlling important or complementary assets is valuable in all industries and nothing really new. Lead time is even more important the further you go back in history.

It could be said that these four mechanisms are more complicated in this global marketplace and with instant communication and the ‘flat world’ we live in. It seems that if a company is doing something, it is not terribly difficult to find out what they are doing and find another way of doing it, or do something different to make it better. I do like the idea of building a golden goose. This is the pinnacle idea of business, to create something that will perpetuate revenues and profits for many years.

Chapter 17

The Design of New Organizational Forms

This chapter outlines the design of new organizations. The authors speak to the disruptive qualities of technology and how new organizations are formed once technology changes. Managers are tasked with making changes to their organizational design to remain competitive. The bulk of the chapter looks at six new organizational forms.

• virtual organizations
• network organizations
• spinout organizations
• ambidextrous organizations
• front-back organizations
• sense-and-respond organizations

The discussions of these six categories and new organizational design are strikingly similar to what we looked at back in chapter 2. Many of the arguments in this chapter we have discussed before with regard to using input from customers to help drive a company to new ideas. The front-back organization puts the customers more in charge of R&D than only managers. There are problems with something like this. The sense-and-respond idea relates well to many of the strategy ideas we discussed in the last few chapters.

The design of any organization will change and evolve depending mostly on the technology that is driving the organization. Any one design will not work in all instances. Companies will be best to use some of many of the techniques in this book to work through technologies and changes as they come about. Much of these ideas are tools that managers can use to arrive at their own ideas about organizational design.

Bringing thoughts from this chapter and many of the other chapters from the book it can be said that emerging technology has changed how organizations design their strategy. Their thinking about how organizations are structured. There are new concepts and new ideas that have been in place for many years. The authors of this book now 9 years old have discussed many of the same ideas for today.