I have seen quite a few companies obsessed with innovation and falling short on milking working/existing business models. OTOH i have also seen companies neglect innovation to their own peril resulting in subsequent loss of market share. But in any case any strategic model, shiningly new or reliably old, is no use if not implemented and delivered properly. Having said that Innovation is also very necessary for sustained and continuous improvement, staying ahead of the market, etc; Thus balancing between the two aspects creativity-innovation and delivery should be taught in B-Schools, along with evaluating on which of the two should the spotlight be focussed on depending on the dynamics of the market. A workshop or two with simulations and case studies would be nice
- an aspiring strategist

Thank you for all the helpful information I found Sunday on your site. I was doing a search for the keyword phrase “survival” and your site answered a lot of questions. I will bookmark and visit again….

I thought the following (I am a recent MBA) might be of interest.

The HBR article you quote follows its statement on innovation with …

“In an initiative we call DesignWorks, our MBA students work hand in hand with design school students and design professors”.

I also attended a product design course at business school with design students from a reputed design school.

However, on this course one concept (should that be ‘hypothesis’?) proposed was a distinction between creative activities and process driven activities; between the early stages of product design, and later stages of production; between smaller entrepreneurial businesses and larger process driven organisations; and between the respective cultures of such departments, and businesses. Another (strategy) course highlighted this as a distinction between Innovation, and Discipline. Yet another (entrepreneurship) suggested a distinction between creating new businesses, building and growing business, taking care of established businesses, (and winding down declining businesses?), and the different skill-sets and personalities of people who enjoy and thrive in working in these different areas.

I might fall into the same trap as the HBR article if I promoted this view as a truth or “simple rule”, rather than as the hypothesis that it clearly is, but thought it an interesting counter perspective to the HBR article, which allows room for some value outside innovation and creativity.

finereach

Is anything different this time?

Senior management claim to have learned their lessons. Capacity is increasingly added in small increments, and signaling via public announcements of new projects includes the total potential capacity as well as size and timing of first phase. Some even announce their explicit decision rule: only spend for next phase when existing plant is at 70% capacity.

However, the data is not so simple. Forecasters (cheerleaders) all predict 20% demand CAGR vs. 6-10% capacity CAGR over next 5 years, leading to very tight capacity and outstanding operator returns. But forecasters use an easy capacity measure, square footage, when actual capacity is driven more by power and cooling availability, seldom published. In addition, demand is served by many competing technologies, some of which are far more power-efficient than others, and the crystal ball is very unreliable in forecasting their future success.

The credit crunch is widely cited as holding back investments in this space at present, perhaps forcing some players into the cash-accumulation stance you cite, or at a minimum driving some deleveraging and balance sheet cleanup.

But for an investor considering getting into this space, it is both a promising time and a scary one.

Thanks for posting this South American presentation.

Absolutely right on the money. Absorbing, pithy and riveting. Just what is needed to try to explain why the “credit crunch” was inevitable. We have been here before, but what has been learned?

As I may have mentioned previously, I have been trying to interest the decision-makers [sic], at the place where I do some teaching, that MBA and MSc students need the exposure to the Strategy Dynamics to begin to engage in joined up thinking. As you mention several times in your excellent presentation, this is not rocket science; it just needs people to open their minds to different and more productive ways of thinking. To ignore the BOT aspects of strategy is completely to miss the big picture.

More power to your elbow!