Stevens Institute of Technology Howe School of Technology Management Syllabus MGT 752 – Corporate Entrepreneuring Spring, 2012 Peter A. Koen Babbio 404 Tel: 201-216-5406 Fax: 201-221-7788 pkoen@stevens.edu Saturday, 8:30pm to 12:30pm Office Hours: By appointment Course Web Address: Overview This course focuses entirely on Corporate Entrepreneuring (Intrapreneuring) and the Front End of Innovation – which is the beginning of the innovation development process – from a large company perspective. How do large companies start and develop entirely new initiatives and projects? What are the critical factors which influence the decision process? Where do breakthrough projects originate? Each of these questions will be answered during the course where the students develop a business model and then attempt to obtain actual funding for by conclusion of the course. (Over 60% of projects in the course receive funding where the average funding level exceeds $250,000.) As part of this course students will be able to evaluate critical front end weaknesses in their company. Topical areas such as lead user, open innovation and how to develop breakthrough projects utilizing the concepts embodied in the innovators solution, blue ocean strategy and ambidextrous organizations will also be discussed. Learning Goals After taking this course, the student will be able to: 1. Assess the corporate and political environment which affects new entrepreneurial projects in their company. 2. Understand the front end practices in top quartile companies 3. Determine organizational structures which are best suited to managing breakthrough projects 4. Develop a business model for their start-ups. 5. Gain support for their entrepreneurial project within the company through use of appropriate persuasional skills. Pedagogy The course’s major objective is to provide the students with the skills and knowledge to develop a new business or project within their company. Concepts and theories will be taught by lectures, videos, cases and guest lectures. The course is divided into three sections. The first section reviews the literature and the lessons learned so that the students develop a keen awareness of the elements that make for a successful new project. In the second section of the course the students learn how to develop a business model for their new project. The final section involves the development of an actual new business project for their company. This project is graded in part by executives from the employees companies. Required Text(s) None Required Readings 1. Von Hippel, Eric, Thomke, Stefan, and Sonnack. “Creating Breakthroughs at 3M.” Harvard Business Review, Sept-Oct., 1999. 2. Notes on Lead User research, Harvard Business Review, Case 699-014 3. Koen, P.A, Bertels, H. and Kleinschmidt, E., “Front End of Innovation – Part I,” Research-Technology Management, to be published in March 2014 4. Koen, P.A, Bertels, H. and Kleinschmidt, E., “Front End of Innovation – Part I,” Research-Technology Management, to be published in May 2014 5. Christensen, C.M., Cook, S. and Hall, T. “Marketing Malpractice: Its Causes and Cures,” Harvard Business Review, December 2005, pg. 74 – 83. 6. Amabile, T.M., Hadley, C.N. and Kramer, S.J., “Creativity Under the Gun.” Harvard Business Review, August 2002. 7. Kotter, J.P. “How to Save Good Ideas,” Harvard Business Review, October 2010. 8. Dyer, J.H., Gregersen, H. B., and Christensen, C.M., The Innovator’s DNA, Harvard Business Review, December 2009. 9. Amabile, T. and Kramer, S. “The Progress Principle: Optimizing Inner Work Life to Create Value, Rotman Magazine, January 2012. 10. Wenger, E. C. and Snyder, W. M., “Communities of Practice: The Organizational Frontier,” Harvard Business Review, January – February, 2000. 11. Conger, J.A., “The Necessary Art of Persuasion.” Harvard Business Review, May – June 1998, pg. 84-95. 2 12. Kotter, “Leading Change: Why Transformational Efforts Fail,” Harvard Business Review, March 1995: pg. 56 – 67. 13. Hansen, M. T. and Nohria, N., “How to Build Collaborative Advantage,” MIT Sloan Management Review, Fall 2004, pg. 22- 30. 14. Cross, R., Gary, P., Cunningham, S., Showers, M. and Thomas, R., “The Collaborative Organization: How to Make Employee Networks Really Work,” MIT Sloan Management Review, Fall 2010, pg. 83 – 90. 15. Chesbrough, Henry, “The Era of Open Innovation,” MIT Sloan Management Review, Spring 2003, pg. 35 – 41. 16. Huston, Larry and Sakkab, Nabil, “ Connect and Develop: Inside P&G’s New Model for Innovation, Harvard Business Review, March 2006, pg 58 -66. 17. Christensen, C. M., Raynor, M., Verlinden, M., “Skate to Where the Money Will Be,” Harvard Business Review, November 2001, pg. 71 – 81. 18. Reilly, C. A. and Tushman, M., “The Ambidextrous Organization,” Harvard Business Review, April 2004, pg 2 – 9. 19. Johnson, Mark, Christensen, Clayton and Kagermann, Hemming, “Reinventing Your Business Model,” Harvard Business Review, December 2008. 20. Immelt, Jeffrey, Govindarajan, Vijay and Trimble, Chris, “How GE is Disrupting Itself,” Harvard Business Review, 2009. 21. Eyring, Matthew, Johnson, Mark and Nair, Hari, “New Business Models in Emerging Markets,” Harvard Business Review, January – February 2011. For those who would like to hear Matt Eyring live: www.youtube.com/watch?v=uLHwOsNLWKY 22. Govindarajan, V. and Trimble, C., “Organizational DNA for Strategic Innovation, “California Management Review, 47(3), pg 47 - 76, Spring 2005. 23. Kim, W. C. and Mauborgne, R., “Blue Ocean Strategy: From Theory to Practice,” California Management Review, 74(3), pg. 105 – 121, Spring 2005. 24. Gavetti, Giovanni, “Strategy Formulation and Inertia,” HBS School Case 9-705468, January 10, 2005. 25. Anderson, Chris, “How to Give a Killer Presentation, “ Harvard Business Review, June 2013, pg. 1—6. 3 26. Ellet, William, “How to Analyze a Case,” in Ellet, William The Case Study Handbook: How to Read, Discuss and Write Persuasively About Cases,” Harvard Business School Press, 2007 - read 27. Ellet, William, “How to Discuss a Case,” in Ellet, William The Case Study Handbook: How to Read, Discuss and Write Persuasively About Cases,” Harvard Business School Press, 2007 - read Assignments CLASS PROJECT (Team Exercise and presentation) The objective of this case is to have the students develop an actual new project in your company. The students should develop an actual new project for your company. The students build a business model in classes 2 through 6. All team members participating in a project which receives actual funding, as substantiated by a letter from the company, by the last day of the course will receive an “A” for the course. However, the team is still required to complete the business model and give a final presentation CASE I. PATH AND THE SAFE WATER PROJECT (Individual Assignment) The objective of this case is to have the student begin to become familiar with the critical elements of the FEI canvas: the problem, the customer circumstance, the solution attributes and the solution. Each student in the class receives a case grade following the discussion. (Reference: Path and the Safe Water Project: Empowering the poor through user-centered design. Stanford Business School, Case OIT-107, April 1, 2013.) Case problem statements: 1. What is the problem that the safe water project is trying to solve? 2. What are the customer segments, or customer circumstances who would benefit from the solution 3. What are the solution attributes and does new super tunsai meet these attributes. What other solutions can you envision CASE II – TCHIBO IDEAS: LEVERAGING THE CREATIVITY OF CUSTOMERS (5% grade weight) The objective of this case is to understand the front end practices for generating innovative ideas from customers. The student is responsible for coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. Each student in the class receives a case grade following the discussion. (Reference: Tchibo Ideas: Leveraging the creativity of customers (Case ESMT 512-0129-8, May 20, 2012.) 1. Is Tchibo ideas a platform that can generate products that will really support performance or will these products mainly be products that only sell to a niche? 2.Should Tchibo also use the information and discussions on the platform for 4 general product development? What problems can occur from this? 3. Is Tchibo ideas a sustainable idea? What should Tchibo do about Tchibo ideas? CASE III. MANAGING CORPORATE ENTREPRENEURSHIP (Individual exercise) The objective of this assignment is to understand best practices in corporate entrepreneurship and the roles and responsibilities of managers at different levels of the organization. The student is responsible for coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. Each student in the class receives a case grade following the discussion. (Reference: 3M Optical Systems: Managing Corporate Entrepreneurship, Harvard Business School Case Study (Case 9-395-017, revised May 28, 1999). 1. As Andy Wong, how would you handle the authorization for expenditure (AFE) for the relaunch of the privacy screen? 2. As Paul Guehler, would you approve the AFE if Wong sent it to you? 3. How effective has Wong been as a front line manager in the 3M context? How effective has Guehler been as 3M division president? CASE IV – CHANGE MANAGEMENT SIMULATION (Individual Exercise) The objective of this simulation is to allow the students to better understand how change happens and the relative power of the change agent and the relative urgency associated with the change initiative. The student is responsible for coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. The grading for this case is broken in 2 equal elements. The first part of the grade is dependent on the simulation and the 2nd part is dependent on the case discussions. (Change Management: Power and Influence – HBR Simulation 2011 1. Discuss the differences in how the change management process should be handled in low urgency and high urgency projects. 2. Discuss why change efforts are so difficult. 3. What are the critical 1st steps in any change process. Case V. INNOVATION AND COLLABORATION AT MERRILL LYNCH (Individual exercise) The objective of this case is to understand the influence of group dynamics on product innovation through teams, team collaboration, alignment of incentives and decision making under uncertain conditions. Each student in the class receives a case grade following the discussion. (Reference: Innovation and Collaboration at Merrill Lynch. Harvard Business School Case Study (Case 9-406-801, March 26, 2007:) 1.Why is Candace Browning trying to encourage coloration among the research analysts at Merrill Lynch? 2. What are the biggest obstacles to collaboration at Merrill Lynch? Please be specific. 3. What actions should Candace Browning take to encourage more collaboration? Please be specific. 5 CASE VI – OPEN INNOVATION AT SIEMENS (Individual exercise) The objective of this assignment is to address the strategic and cultural issues associated with outsourcing innovation. The student is responsible for coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. Each student in the class receives a case grade following the discussion. (Reference: Open Innovation at Siemens, Harvard Business School Case (Case 9-613-100, September 2013) 1. Discuss the value and overall benefit of the different open innovation initiatives including innovation jams and idea generation contests to Siemens. 2. Develop a series of metrics which Siemens can use to measure the benefits of open innovation. The metrics should be able to differentiate between traditional internal R&D efforts and those related to open innovation. 3.Compare the open innovation efforts at Siemens to those at P&G (Houston and Sakkab). Account for the differences and evaluate the pros and cons. CASE VII – FLIGHT OF THE KITTY HAWK (Individual exercise) The purpose of this case is to apply the principles of developing a breakthrough project. The student is responsible for coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. Each student in the class receives a case grade following the discussion. (Reference: Hewlett-Packard: The Flight of the Kittyhawk, Harvard Business School Case Study (Case 9-697-060, revised March 10, 2003.) 1. Rate the strengths and weaknesses of the way Hewlett-Packard structured and supported the Kittyhawk development team? 2. Discuss the way the team set out to find a market for the Kittyhawk? What do you believe that they did correctly? What do you believe they did wrong? 3. Discuss the root causes of the failure of the Kittyhawk program? Is there any way HP could have avoided this fate? CASE VIII – BACK BAY SIMULATION (Individual exercise) This simulation is designed to present disruptive technology in a real world context in which managers must make decisions about investing in innovative technologies under conditions of uncertainty. The student is responsible for running the simulation prior to class and coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. The student is also graded on the overall profit that they obtain at the end of the simulation. (Reference: Shih, Willy and Christensen, Clay, “Back Bay Battery, Inc” HBR Online Simulation, 2008.) 1, Describe your strategy and how you managed the conflict between NiMH Battery and Ultracapacitor technology. 2. Discuss and provide rationale for the specific information you focused on after each round. 3. Describe the reasons for your success and failure in running Backbay within the context of being successful with radical technology. 6 CASE IX – EMERGING NEW BUSINESS OPPORTUNITIES AT IBM (Individual case) The objective if this case is to understand how companies develop new businesses and the problems that they encounter. The student is responsible for coming to class prepared to answer the following three questions and is graded on his or her knowledge, understanding and insights made during the case discussion. Each student in the class receives a case grade following the discussion. (Reference: Emerging Business Opportunities at IBM (A), Harvard Business School Case Study (Case 9-304-075 , revised August 2, 2004) 1. Why do large companies like IBM find it so difficult to create new businesses? What are the primary barriers to success? 2. How did the Emerging Business Opportunity (EBO) management system evolve? What was accomplished during both the Thompson and Corporate Strategy era? 3. How should Harreld deal with those businesses now reaching Horizon 2 status and should he increase the number of EBO’s? The assignments and their weights are as shown below: Assignment Project Dallies where the students make comments on other students projects Final class project (team) Case class participation (individual) – Nine case and simulation Total Grade Grade 10% 45% 45% 100% 7 Ethical Conduct The following statement is printed in the Stevens Graduate Catalog and applies to all students taking Stevens courses, on and off campus. “Cheating during in-class tests or take-home examinations or homework is, of course, illegal and immoral. A Graduate Academic Evaluation Board exists to investigate academic improprieties, conduct hearings, and determine any necessary actions. The term ‘academic impropriety’ is meant to include, but is not limited to, cheating on homework, during in-class or take home examinations and plagiarism. “ Consequences of academic impropriety are severe, ranging from receiving an “F” in a course, to a warning from the Dean of the Graduate School, which becomes a part of the permanent student record, to expulsion. Reference: The Graduate Student Handbook, Academic Year 2003-2004 Stevens Institute of Technology, page 10. Consistent with the above statements, all homework exercises, tests and exams that are designated as individual assignments MUST contain the following signed statement before they can be accepted for grading. ____________________________________________________________________ I pledge on my honor that I have not given or received any unauthorized assistance on this assignment/examination. I further pledge that I have not copied any material from a book, article, the Internet or any other source except where I have expressly cited the source. Signature ________________ Date: _____________ Please note that assignments in this class may be submitted to www.turnitin.com, a webbased anti-plagiarism system, for an evaluation of their originality. 8 Course Schedule Date Class Sept 6 1&2 Sept 20 3 Oct 4 Oct 25 Lecture Modules and Exercises Module I – Introduction Module II – Business Models Module III – Problem Formulation Module IV – Customer Visits Module V – Lead User Training Module VI – Front End of Innovation Module VII – Prototyping Prototyping Exercise Readings (REQUIRED readings are underlined) 1. Creating Breakthroughs at 3M 2. Notes on Lead User Research 1.Front End of Innovation – Part I 2. Front End of Innovation – Part II 3. Marketing Malpractice 4. The progress principle 5. Creativity Under the Gun 6. Innovator’s DNA 7. How to save good ideas Communities of Practice 8. How to Analyze a Case 9. How to Discuss a Case Cases Deliverables Case I – Path and the safe water project Grade Weight 5% Case II –Tchibo Ideas Case III – 3M Managing Corporate Entrepreneurship Project IA. One Half of the teams present. POV, Customer Circumstance and Solution Attributes. (5 customer visits). All teams post canvas. Name of executive champion. 10% Case IV – Change Management Simulation Case V- Innovation and Collaboration at Merrill Lynch Project IB – One Half of Class Presents CVP. (15 customer visits). 10% No class. 4 Module VIII – Collaboration Strategy Exercise 1. Necessary Art of Persuasion 2. Leading change 3. How to Build Collaborative Advantage 4. How to Make Employee Networks Really Work 5.Change Management foreground reading Module IX – Open Innovation Module X – Exponential Technologies Module XI - Developing Breakthroughs Module XI – Corporate Entrepreneur Story Telling Nov 1 5 Nov 15 6 Nov 22 7 Practice telling TED type of story Dec 13 8 Final Project 1. The Era of Open Innovation 2. Connect and Develop 3. Skate to where the money will be 4. The Ambidextrous Organization Case VI – Open Innovation at Siemens Case VII – Flight of the Kitty Hawk Project IC – One Half of Class Presents CVP and Operating Model. (20 customer visits). 10% 1. Reinventing Your Business Model 2. How GE is Disrupting Itself 3. New Business Models in Emerging Markets 4. Organizational DNA for Strategic Innovation 5. Back Bay Battery foreground reading 6. Blue Ocean Strategy 7. Strategy Formulation and Inertia Case VIII – Back Bay Simulation Case IX – Emerging Business Opportunities at IBM Project ID. One Half of Class Presents. Entire canvas. (25 customer visits). All teams post canvas. 10% for cases + 10% for entire canvas 1. How to give a killer presentation. TED presentations at Stevens Final Presentation Practice One page executive write-up due on Dec 6 Final Project. Ted Presentation (8 min) + Lessons Learned ppt ( 4min) 30% 10