Capabilities for Strategic Advantages: Leading Through Technological Innovation

321 Pages·2005·1.18 MB·English

by  David Birchall

Capabilities for
strategic advantage
Leading through technological
innovation
David Birchall and
George Tovstiga
Capabilities for strategic advantage
This page intentionally left blank
Capabilities for
strategic advantage
Leading through technological
innovation
David Birchall
and
George Tovstiga
© David Birchall and George Tovstiga2005
All rights reserved.No reproduction, copy or transmission of this publication
may be made without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save
with written permission or in accordance with the provisions of the Copyright,
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limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court
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Any person who does any unauthorised act in relation to this publication may
be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this
work in accordance with the Copyright, Designs and Patents Act 1988.
First published 2005 by
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C
ONTENTS
List of figures ix
List of tables xi
Preface xiii
Part I
Chapter1 Capabilities and competitive advantage in
continually changing contexts 3
Introduction 3
Changing patterns of competition 3
Scoping the broader managerial context with respect to
capabilities and innovation 12
Concluding remarks 18
Chapter2 Capabilities as strategic resources 19
Introduction 19
Capabilities and the resource-based view of the firm 19
Capabilities and organizational knowledge 21
Capabilities and tacitness 30
Capabilities and path dependence 31
Concluding remarks 34
Chapter3 Capabilities and competitive advantage 35
Introduction 35
Capabilities and competitive advantage 38
Capabilities and value creation 42
Concluding remarks 47
Chapter4 Managing capabilities forstrategic advantage 49
Introduction 49
Strategic management of capabilities 49
Selecting capabilities 51
Building capabilities 54
Deploying capabilities 58
v
vi Contents
Protecting capabilities 63
Concluding remarks 65
Chapter5 Strategic capabilities and innovation 66
Introduction 66
Capabilities and innovation 66
Institutional innovation 71
Revolutional innovation 74
Evolutional or sustainable innovation 78
Capabilities and evolutional innovation 82
Concluding remarks 84
Chapter6 Evolutional innovation: deriving opportunity
from disruption 86
Introduction 86
Evolutional innovation: deriving opportunity from
disruption 87
Implications and challenges for management 95
Learning to derive opportunity from disruption 99
Exploiting new opportunities for competitive advantage 101
Concluding remarks 103
Part II
Chapter7 Market orientation and innovation success 107
Introduction 107
Market orientation 108
Costs versus benefits of customer involvement in the
innovation process 110
Stages of the development process and customer
involvement 115
Environmental turbulence—is a different approach needed? 117
Integrating future market opportunities, technological
advances, firm capabilities, and strategic intent 119
Foresight as background to future proofing 121
Scenarios in planning 123
Trend analysis 127
Technology roadmaps 129
Quality function deployment 132
Concluding remarks 138
Contents vii
Chapter8 Accelerating progress through partnering and
alliancing 141
Introduction 141
Partnerships and alliances 142
Alliance, constellation, and networks 158
Concluding remarks 161
Chapter9 Creating organizations and networks to support
innovation 163
Introduction 163
Networks and clusters: new ways of organizing 164
Networks and clusters: contributing to a firm’s innovativeness 168
Networks and clusters: realizing the benefits 171
Networks and clusters: incremental or radical innovation 174
How networks develop 177
Concluding remarks 180
Chapter10 Managing complex technology projects,
programs, and portfolios 182
Introduction 182
The nature of complex technology projects, programs, and
portfolios 184
Features of high-technology development projects 186
The process of new product development 188
Controlling time and cost in projects: earned value
analysis (EVA) 193
Accelerating innovation projects 196
Portfolio management for overall performance improvement 212
Managing risk 218
Concluding remarks 225
Chapter11 Measuring innovation performance 227
Introduction 227
The purposes of measurement 231
The nature of innovation performance measurement 232
The use of measures for innovation performance
management 239
Current practices in innovation performance measurement:
the important measures 244
Frameworks for innovation performance measurement 250
The phenomenological approach to innovation 256
viii Contents
Making innovation performance reviews pay 259
Concluding remarks 260
Appendix AStrategic capabilities portfolio analysis: Diagnostic
methodology 263
Appendix B Case study: BPAmoco and capabilities development 275
References 280
Index 294
F
IGURES
1.1 Innovation as a function of technology and market
dynamics 13
1.2 Market opportunity and the technology (knowledge)
trajectory 14
2.1 Dimensions of a capability 25
2.2 Capabilities-embedded knowledge and degree of tacitness 31
3.1 Value definition, creation, and delivery cycle 43
3.2 Schematic showing the link between a firm’s capabilities
and its delivery of value 45
4.1 Capabilities portfolio mapping showing envelope of a
strategically balanced portfolio and example of positioning
of two capabilities in terms of competitive position and
impact 53
4.2. Dimensions of the organization’s knowledge and learning
environment 57
4.3 Knowledge internalization trajectory shown for deployment
of capabilities 60
5.1 The organization’s capabilities-building cycle 67
5.2 Institutional and revolutional innovation as a function of
the nature and scope of innovation 69
5.3 Innovation investment intensity and potential impact on
growth as an outcome of innovation strategy 70
5.4 Arthur D. Little’s innovation framework 73
5.5 Evolutional innovation in relation to institutional and
revolutional innovation 79
5.6 Innovation strategy option range and associated business
dimensions, showing the profile of a typical institutional
innovation-oriented firm 83
6.1 Market opportunity and the firm’s knowledge position in
disruptive markets 89
6.2 Aconceptual framework showing possible paths for
evolving disruptive innovation 93
6.3 Innovation cycles and management implications for their
strategic management 97
ix