Embed Size (px)
Citation preview
Technology, Innovation & Business Transformation
Irving Wladawsky-BergerChairman Emeritus, IBM Academy of TechnologyVisiting Professor, Engineering Systems, MITAdjunct Professor, Tanaka Business School, Imperial College
2
Technology-based innovation and business Survival
Formulating a market strategy around a new, complex technology
Executing a multi-faceted strategy in the marketplace
Organizational and cultural Issues
Agenda
3
Why is There So Much Focus on Innovation Now?
4
Why is There So Much Focus on Innovation Now?
Huge Opportunities
5
Policy & SocietyPolicy & Society
Culture & Management
Culture & Management
Business ModelsBusiness Models
Business ProcessesBusiness Processes
Services & Solutions
Services & Solutions
Technology & Product
Technology & Product
Many Opportunities for Innovation Across the Board
6
Why is There So Much Focus on Innovation Now?
Huge Opportunities
And, - We Don’t Have a Choice: Innovate or Fade Away . . .
7
One Minute the World is Your Oyster …
8
… the Next Minute Everything’s Changing ...
9
… and Suddenly It’s a Whole New World
10
The Rise
The Fall
The Change
The Re-Birth
The IBM Story
11
The Rise: 1960s - 1970s - 1980s
S/360 Architecture - Compatible Family of Processors
Software - Operating Systems, Transaction Processing, Storage Management, Network Management, . . .
Industry Eco-System
Technical and Business Skills
Multi-National Company
IBM PC
12
IBM at the Top - 1984
13
Tragedy … depicts the downfall of a noble hero or heroine, usually through some combination of hubris, fate, and the will of the gods.
The tragic hero's powerful wish to achieve some goal inevitably encounters limits, usually those of human frailty (flaws in reason, hubris, society), the gods (through oracles, prophets, fate), or nature.
The hero need not die at the end, but he / she must undergo a change in fortune.
Wikipedia
14
The Fall: Late 1980s, Early 1990s
Rising Power of Microprocessors
PC Explosion – Microsoft/Intel (Wintel) Supremacy
New Distributed Computing Model – Client/Server
New Competitors – Sun, HP, SGI, Compaq, . . .
Disaggregated, Horizontal Markets
Mainframe Profit Margins Collapse
Massive Restructuring Required
15
The Fall – Reversal of Fortune
1984 1992
16
“The IBM Era Is Over ... what was once one of the world’s more vaunted high-tech companies has been reduced to the role of a follower, frequently responding slowly and ineffectively to the major technological forces reshaping the industry.”
The New York Times, December 16, 1992
17
The Change: Getting Ready for the Future
Technology Shift Anticipated by IBM’s Technical Community
Search for Alternatives in R&D Labs
Mainframe Reinvented Using Microprocessors and Parallel Architectures
Solutions Validated with Experimental Prototypes
Market Acceptance: Mainframe Compatibility and Capabilities at Competitive Prices
18
The Change: Cultural Transformation
Market-based Strategies
Embrace of Open Standards
Transition from Mainframe-Centered Strategy to Integrated Multi-Vendor Distributed Systems
Transition from Hardware-based Strategy to Hardware, Software and Services-based Integrated Solutions
Embrace Collaborative Innovation
19
The Rebirth: The Internet, Web and e-business...
20
Technology-based Innovation and Business Survival
Formulating a market strategy around a new, complex technology
Executing a Multi-Faceted Strategy in the Marketplace
Organizational and Cultural Issues
Agenda
21
How advanced is the technology?
What is the marketplace saying about it?
What are competitors doing?
How are your clients reacting?
Formulating a Technology-based Strategy FormulationKey External Factors
22
How advanced is the technology?The Internet and Web were breaking out of the research community into the “early adopter”
general marketplace
What is the marketplace saying about it?The marketplace started paying more and more attention, especially after the Netscape IPO
in August, 1995
What are competitors doing?Major competition was arising, both existing companies – e.g., Sun, later Microsoft, and new
companies – e.g., Netscape and many new “dot coms”
How are your clients reacting? Clients were beginning to experiment with the Web – both putting up web sites, front ends to
their existing systems, and developing brand new applications, …
Formulating an Internet-based Strategy
23
What are your capabilities or “core competencies” to deal with emerging technology?
How well does new technology fit with existing “legacy” products, services and installed base?
How well does new technology and related products and services fit with existing organization?
Does your company have “brand permission” to go into this space naturally, or will it take a major marketing campaign?
Formulating a Technology-based Strategy FormulationKey Internal Factors
24
Capabilities and “core competencies”The Internet and Web were becoming an integral part of the next generation IT infrastructure
requiring systems, software and services
Fit with legacy products, services and installed baseJust about all existing products, services and installations were “web enabled” so they can
easily integrate into an Internet infrastructure
Fit with organization and cultureNew “dot com” were much faster moving in the marketplace than existing companies and
seemed to play by different rules that they were inventing as they went along
Brand permission and market acceptance There were lots of discussions that we were entering a “new economy” in which only “born to
the web” companies could play and survive and existing businesses were destined to fade away
Formulating the IBM Internet-based Strategy
25
e-business = Web + IT
Industrial Strength
Standards
TransactionsDatabase
Systems MgmtScalability
AvailabilitySecurity
TCP/IPHTML
HTTP Browsers
Web Servers GUIs
SSL
SET
Java
26
A Culture of Open Standards
OGSA
Web Services
XML
Linux
Globus
WSDLSOAP
SMTP
SQLNNTP
HTTP/HTML
IRC
POP/iMAP TCP/IP
WAP
OASIS
27
Make sure you have required skills and talent for new initiative
Leverage existing products, customer set, installed base, and overall organization as much as possible
Don’t stray too far from your brand and its accepted value
Align strategy with the forces of the marketplace
Strategy Formulation: Lessons Learned
28
Technology-based innovation and business survival
Formulating a market strategy around a new, complex technology
Executing a multi-faceted strategy in the marketplace
Organizational and cultural Issues
Agenda
29
Time to market is critical – pick segments where “good enough” products and services are adequate
Establish early market presence with major events and customer prototypes
Formulate a set of key market messages and make sure everyone is “on message”
Communicate extensively through to a variety of constituents through various channels
Key External Factors in Operationalizing Market Strategy
30
Time to Market – Early “Killer Apps” Web-IT integration; Customer self-service; Simple e-commerce
Early visible prototypes1996 Olympics web site; Grammys;
Many customer prototypes; focus on customer references
Key market messages
Major e-business marketing campaign
Key message: leverage Internet fur business value
Communications Many press articles, interviews, IT and financial analysts, customer events, etc
Key External Factors in Operationalizing Market Strategy
31
Market and application segmentation
Build in-house vs acquisitions and partnerships
Financial Measurements
Management Reviews
Key Internal Factors in Operationalizing Market Strategy
32
Market and Application SegmentationFocused on key segments where IBM had skills and enterprise had needs: hosting, security,
back end integration, web application servers, . . .
Build in-house vs acquisitions and partnerships
Did not participate in “browser wars”; embraced open source Apache web server vs internal effort; partnered with Sun on Java
Focused internal efforts on enterprise quality software: WebSphere
Financial measurementsTracked directly a number of key, “pure” Internet projects Focused primarily on larger Internet impact on overall revenues
Management reviews Reviewed progress closely in early days of e-business initiative, including with CEO and top
senior management
Key Internal Factors in Operationalizing Market Strategy
33
Focus, Focus, Focus, . . . .
Extensive market prototyping and experimentation, including client projects
Don’t try to do it all by yourself; partner extensively
Critical importance of highly disciplined marketing and communications
Operationalizing Strategy: Lessons Learned
34
Technology-based Innovation and business survival
Formulating a market strategy around a new complex technology
Executing a multi-faceted strategy in the marketplace
Organizational and cultural Issues
Agenda
35
Build a company-wide virtual organization
Include as much of the company as possible in the initiative
Spend considerable efforts in internal communications and education
Sell the strategy “outside-in”
Nurture core supporters, e.g., technical community, marketing, . . .
Support of senior management is critical
Organizational and Cultural Issues
36
Company wide virtual organization For trasformative, company wide initiatives, best to have a relatively small full time core team
coordinating activities across the different functions in the organization
Be inclusive of as much of organization as possibleOrganizations will likely not support new initiatives at first, especially if they are not involved and
feel excluded
The more everybody feels part of new initiative, the more they will support it and help it succeed
Internal communications and education Don’t underestimate the need to explain new initiatives, educate people on what it is all about,
their role in it - over and over and over
Organizational and Cultural Issues
37
Sell the strategy “outside-in” People will believe what they read in newspaper , magazine articles and other external sources
more than internal communicationsMake sure external marketing and communication activities receive wide internal visibility
Nurture core supportersLeverage the passion and commitment of strong core supporters and “evangelists” in convincing
others about the value of strategyOften, strongest supporters will be those with strongest external connections – technical
community, research, . . .
Senior management support
Disruptive, transformative company-wide strategies must have strong senior management support to be successful
They will inevitably fail otherwise
Organizational and Cultural Issues
38
Businesses must innovate continuously especially in times of rapid change – else they will fade away
New major technologies can help companies achieve or regain a leadership position if the proper market strategy is put in place
Execution is critical and very difficult because of all the factors that go into it and have to work together
Organization buy-in is probably the key ingredient to be successful, especially with a complex, transformative market strategy
Summary
Technology, Innovation & Business Transformation
Irving Wladawsky-BergerChairman Emeritus, IBM Academy of TechnologyVisiting Professor, Engineering Systems, MITAdjunct Professor, Tanaka Business School, Imperial College
