Table of Contents
Week 1 – The Innovators Dilemma ........................................................................................................................ 2
Christensen (1997): The Innovator’s Dilemma: when new technologies cause great firms to fail ...........................2
Moore (2004): Darwin and the Demon: innovating within established enterprises .................................................3
Week 2 – Disruptive Innovation and Block Chain ................................................................................................... 3
Week 3 – Ambidexterity ........................................................................................................................................ 4
Christensen & Overdorf (2000): Meeting the Challenge of Disruptive Change .........................................................5
Birkinshaw & Gibson (2004): Building Ambidexterity into an Organization ..............................................................6
He and Wong (2004): Exploration vs. Exploitation: An Empirical Test of Ambidexterity Hypothesis .......................7
Week 4 – Managing Corporate Entrepreneurs ....................................................................................................... 7
Ling, Simsek, Lubatkin & Veiga (2008): Transformational Leadership’s Role in Promoting Corporate
Entrepreneurship: Examining the CEO-TMT Interface ..............................................................................................8
Sykes (1992): Incentive Compensation for Corporate Venture Personnel ................................................................9
Herzberg (1987): One More Time: How do you motivate employees? ...................................................................10
Week 5 – Managing Internal Corporate Ventures ................................................................................................ 11
Sethi & Iqbal (2008): State-Gate Controls, Learning Failure and Adverse Effect on Novel New Products ..............14
Christensen, Kaufman & Shih (2008): Innovation Killers: How financial tools destroy your capacity to do new
things .......................................................................................................................................................................16
Burgelman & Valikangas (2005): Managing Internal Corporate Venturing Cycles ..................................................17
Week 6 – Planning Under Uncertainty ................................................................................................................. 19
McGrath (1999): Falling Forward: Real Options Reasoning and Entrepreneurial Failure .......................................21
McGrath & MacMillan (2000): Discovery Driven Planning ......................................................................................22
Black (2013): Why the lean start-up changes everything ........................................................................................23
Week 7 – Sourcing External Knowledge ............................................................................................................... 24
Chesbrough (2003): The Era of Open Innovation ....................................................................................................28
Chesbrough (2002): Making sense of Corporate Venture Capital ...........................................................................30
Garvin & Levesque (2006): Meeting the challenge of Corporate Entrepreneurship ...............................................32
1
,Week 1 – The Innovators Dilemma
Christensen (1997): The Innovator’s Dilemma: when new technologies cause great firms to fail
The innovators dilemma – the logical, competent decisions of management that are critical to the success of their
companies are also the reasons why they lose their positions of leadership.
Sustaining technologies Disruptive technologies
Improve product performance Worsen product performance (short-term)
Can be both incremental and radical Can be both incremental and radical
Improve the performance of established products Bring a very different value proposition that has been
available before
Most technological advances are sustaining General underperform in mainstream markets
Address the needs of customers But, have other features that a few (new) customers value
Didn’t precipitate the failure of leading firms Do not precipitate the leadings firm’s failure
However, it is in the disruptive innovations, where we know least about the market, that there are such strong
first-mover advantages.
The innovator’s task is to ensure that this innovation – the disruptive technology that doesn’t make sense – is
taken seriously within the company without putting at risk the needs of present customers who provide profit and
growth
Incremental vs. radical: size of the change
Sustaining vs. disruptive: how does it relate to your current business?
Why firms not invest in disruptive technologies:
1. Companies depend on customers and investors for resources
Solution: set up an autonomous organization charged with building a new and independent business
around the disruptive technology free from the power of customers and nestle themselves among a
new type of customer that wants the disruptive technology
2. Small markets don’t solve the growth needs of large companies
Solution: often large firms give responsibility to other organizations (whose size matches the size of the
market) to commercialize the disruptive technology.
3. Markets that don’t exist can’t be analyzed
Solution: discovery-based planning
4. An organization’s capabilities define its disabilities
Capabilities are processes and the organization’s values. Are not flexible and cannot be changed for
different tasks
5. Technology supply may not equal market demand
Technological advances grow faster than customer demands.
2
,Solutions: managers should ensure that disruptive technologies are taken seriously within the company, without
putting at risk the needs of present customers who provide profit and growth.
This can best be done by setting up a new division where resources are assigned to disruptive activities.
Moore (2004): Darwin and the Demon: innovating within established enterprises
Failure to innovate failure to differentiate failure to get the profits and revenues needed to attract capital
investment
DEMON = inertia (traagheid)
DARWIN = the different stages of innovation to beat inertia (evolution, survival of the fittest)
Which type of innovation depends on the place in the product market life cycle.
First three stages: disruptive, application and product innovation are rewarded because they dominate the
technology adaption life cycle and create new markets
Inertia = the deeper the enterprise is into the life cycle and the more successful it has been, the greater the
tendency to return to its former ‘’way of doing business’’.
How to overcome? Introduce new types of innovation while deconstructing old processes and organizations
productivity0-creating deconstruction: focus rather on productivity than differentiation to make it as efficient as
possible and to use money to invest in business in the future.
Construction – the goal is to create a new competitive advantage focus on innovation
Deconstruction – the legacy work still needs to be done, but it does not longer improve market results. These
resources merely prevent underperformance about productivity, not differentiation
Differentiation-creating innovation and productivity-creating deconstruction must be conducted at the
same time, otherwise the Inertia Demon will defeat you.
Week 2 – Disruptive Innovation and Block Chain
Exploitation – refine old competences efficiency, production, selection, execution, incremental innovations
Exploration – pursuing new competences variation, experimentation, flexibility, risk-taking, radical innovations
Many people believe the current financial system is about to collapse, because there is less trust. If there is no trust,
money is worthless – this is why people are shifting to bitcoin, because it is independent from the government.
Small companies can have a bigger impact because they respond quicker than large firms
- Core competences of large firms are turning into core rigidities.
3
, - New companies don’t have old factories, or have to do lay-offs – they can start from scratch. You need
dynamic capabilities.
- Competence trap = do either too much exploitation or too much exploration
Blockchain is:
- A distributed ledger – you register how much money you have and transactions that have been made
- You don’t have to trust a central authority
- Everyone owns the same ledger (a copy) and can check if the transactions made are correct
- Every time there is a transaction, everyone updates the ledger
- Everyone has a private key that confirms if you have the right to make the transaction
- You cannot make any changes
- Every 10 minutes a block as to be “mined” (guessing the number), which will get you a reward
- There is a limit to bitcoins, but one bitcoin can be divided. This makes it less prone to inflation
Often people compare new technologies to the old paradigm.
Old paradigms always have a limit to improving – in new technologies the
performance might be lower at this moment at time, but it is increasing really fast
After a while, new paradigms have been created.
If you are in the discontinuity circle – it is too late to switch to new
technologies
Week 3 – Ambidexterity
Ambidexterity combining exploitation and exploration
Each of these requires different organizational structures
1. Mechanistic
- Uniform and restricted operating styles
- Reluctant adaption
- Tight control through sophisticated control systems
More stable or controllable external environment conservative management style is more appropriate
mechanistic / bureaucratic structure is effective
2. Organic
- Operating styles allowed to vary freely
- Free adaption
- Loose, informal control with emphasis on norm of cooperation
More hostile and changing external environment management style more entrepreneurial organic
structure is needed to facilitate entrepreneurship
Small firms outperform large firms in patenting, new drug introduction and new product improvements
Large firms outperform small firms in incremental & process innovations + some industries that are scale intensive
Ambidexterity requires double-loop learning (change of underlying mental model)
Ambidexterity within firms:
4
Week 1 – The Innovators Dilemma ........................................................................................................................ 2
Christensen (1997): The Innovator’s Dilemma: when new technologies cause great firms to fail ...........................2
Moore (2004): Darwin and the Demon: innovating within established enterprises .................................................3
Week 2 – Disruptive Innovation and Block Chain ................................................................................................... 3
Week 3 – Ambidexterity ........................................................................................................................................ 4
Christensen & Overdorf (2000): Meeting the Challenge of Disruptive Change .........................................................5
Birkinshaw & Gibson (2004): Building Ambidexterity into an Organization ..............................................................6
He and Wong (2004): Exploration vs. Exploitation: An Empirical Test of Ambidexterity Hypothesis .......................7
Week 4 – Managing Corporate Entrepreneurs ....................................................................................................... 7
Ling, Simsek, Lubatkin & Veiga (2008): Transformational Leadership’s Role in Promoting Corporate
Entrepreneurship: Examining the CEO-TMT Interface ..............................................................................................8
Sykes (1992): Incentive Compensation for Corporate Venture Personnel ................................................................9
Herzberg (1987): One More Time: How do you motivate employees? ...................................................................10
Week 5 – Managing Internal Corporate Ventures ................................................................................................ 11
Sethi & Iqbal (2008): State-Gate Controls, Learning Failure and Adverse Effect on Novel New Products ..............14
Christensen, Kaufman & Shih (2008): Innovation Killers: How financial tools destroy your capacity to do new
things .......................................................................................................................................................................16
Burgelman & Valikangas (2005): Managing Internal Corporate Venturing Cycles ..................................................17
Week 6 – Planning Under Uncertainty ................................................................................................................. 19
McGrath (1999): Falling Forward: Real Options Reasoning and Entrepreneurial Failure .......................................21
McGrath & MacMillan (2000): Discovery Driven Planning ......................................................................................22
Black (2013): Why the lean start-up changes everything ........................................................................................23
Week 7 – Sourcing External Knowledge ............................................................................................................... 24
Chesbrough (2003): The Era of Open Innovation ....................................................................................................28
Chesbrough (2002): Making sense of Corporate Venture Capital ...........................................................................30
Garvin & Levesque (2006): Meeting the challenge of Corporate Entrepreneurship ...............................................32
1
,Week 1 – The Innovators Dilemma
Christensen (1997): The Innovator’s Dilemma: when new technologies cause great firms to fail
The innovators dilemma – the logical, competent decisions of management that are critical to the success of their
companies are also the reasons why they lose their positions of leadership.
Sustaining technologies Disruptive technologies
Improve product performance Worsen product performance (short-term)
Can be both incremental and radical Can be both incremental and radical
Improve the performance of established products Bring a very different value proposition that has been
available before
Most technological advances are sustaining General underperform in mainstream markets
Address the needs of customers But, have other features that a few (new) customers value
Didn’t precipitate the failure of leading firms Do not precipitate the leadings firm’s failure
However, it is in the disruptive innovations, where we know least about the market, that there are such strong
first-mover advantages.
The innovator’s task is to ensure that this innovation – the disruptive technology that doesn’t make sense – is
taken seriously within the company without putting at risk the needs of present customers who provide profit and
growth
Incremental vs. radical: size of the change
Sustaining vs. disruptive: how does it relate to your current business?
Why firms not invest in disruptive technologies:
1. Companies depend on customers and investors for resources
Solution: set up an autonomous organization charged with building a new and independent business
around the disruptive technology free from the power of customers and nestle themselves among a
new type of customer that wants the disruptive technology
2. Small markets don’t solve the growth needs of large companies
Solution: often large firms give responsibility to other organizations (whose size matches the size of the
market) to commercialize the disruptive technology.
3. Markets that don’t exist can’t be analyzed
Solution: discovery-based planning
4. An organization’s capabilities define its disabilities
Capabilities are processes and the organization’s values. Are not flexible and cannot be changed for
different tasks
5. Technology supply may not equal market demand
Technological advances grow faster than customer demands.
2
,Solutions: managers should ensure that disruptive technologies are taken seriously within the company, without
putting at risk the needs of present customers who provide profit and growth.
This can best be done by setting up a new division where resources are assigned to disruptive activities.
Moore (2004): Darwin and the Demon: innovating within established enterprises
Failure to innovate failure to differentiate failure to get the profits and revenues needed to attract capital
investment
DEMON = inertia (traagheid)
DARWIN = the different stages of innovation to beat inertia (evolution, survival of the fittest)
Which type of innovation depends on the place in the product market life cycle.
First three stages: disruptive, application and product innovation are rewarded because they dominate the
technology adaption life cycle and create new markets
Inertia = the deeper the enterprise is into the life cycle and the more successful it has been, the greater the
tendency to return to its former ‘’way of doing business’’.
How to overcome? Introduce new types of innovation while deconstructing old processes and organizations
productivity0-creating deconstruction: focus rather on productivity than differentiation to make it as efficient as
possible and to use money to invest in business in the future.
Construction – the goal is to create a new competitive advantage focus on innovation
Deconstruction – the legacy work still needs to be done, but it does not longer improve market results. These
resources merely prevent underperformance about productivity, not differentiation
Differentiation-creating innovation and productivity-creating deconstruction must be conducted at the
same time, otherwise the Inertia Demon will defeat you.
Week 2 – Disruptive Innovation and Block Chain
Exploitation – refine old competences efficiency, production, selection, execution, incremental innovations
Exploration – pursuing new competences variation, experimentation, flexibility, risk-taking, radical innovations
Many people believe the current financial system is about to collapse, because there is less trust. If there is no trust,
money is worthless – this is why people are shifting to bitcoin, because it is independent from the government.
Small companies can have a bigger impact because they respond quicker than large firms
- Core competences of large firms are turning into core rigidities.
3
, - New companies don’t have old factories, or have to do lay-offs – they can start from scratch. You need
dynamic capabilities.
- Competence trap = do either too much exploitation or too much exploration
Blockchain is:
- A distributed ledger – you register how much money you have and transactions that have been made
- You don’t have to trust a central authority
- Everyone owns the same ledger (a copy) and can check if the transactions made are correct
- Every time there is a transaction, everyone updates the ledger
- Everyone has a private key that confirms if you have the right to make the transaction
- You cannot make any changes
- Every 10 minutes a block as to be “mined” (guessing the number), which will get you a reward
- There is a limit to bitcoins, but one bitcoin can be divided. This makes it less prone to inflation
Often people compare new technologies to the old paradigm.
Old paradigms always have a limit to improving – in new technologies the
performance might be lower at this moment at time, but it is increasing really fast
After a while, new paradigms have been created.
If you are in the discontinuity circle – it is too late to switch to new
technologies
Week 3 – Ambidexterity
Ambidexterity combining exploitation and exploration
Each of these requires different organizational structures
1. Mechanistic
- Uniform and restricted operating styles
- Reluctant adaption
- Tight control through sophisticated control systems
More stable or controllable external environment conservative management style is more appropriate
mechanistic / bureaucratic structure is effective
2. Organic
- Operating styles allowed to vary freely
- Free adaption
- Loose, informal control with emphasis on norm of cooperation
More hostile and changing external environment management style more entrepreneurial organic
structure is needed to facilitate entrepreneurship
Small firms outperform large firms in patenting, new drug introduction and new product improvements
Large firms outperform small firms in incremental & process innovations + some industries that are scale intensive
Ambidexterity requires double-loop learning (change of underlying mental model)
Ambidexterity within firms:
4
