Organizations’CapabilitiestoInnovateHenryC.CoTechnologyandOperationsManagement,CaliforniaPolytechnicandStateUniversityOrganization'sCapabilitiestoInnovate(HenryC.Co)2Recapitulation:APPPlanOrganization'sCapabilitiestoInnovate(HenryC.Co)4Organizations’CapabilitiesOrganizationshavecapabilitiesanddisabilities.Taketwosetsofidenticallycapablepeopleworkingonaprojectandputthemtoworkintwodifferentorganizations,whattheyaccomplishwouldlikelybesignificantlydifferent!Factorthataffectwhatanorganizationcanaccomplish:Values(non-transferable)Processes(non-transferable)Resources(transferable).Organization'sCapabilitiestoInnovate(HenryC.Co)5ValuesCriteriabywhichdecisionsaremade;standardsbywhichemployeesjudge.Whetheranorderfromacustomerisapieceofgoodbusinessorunattractivebusiness;Whetheracustomerisanimportantonewhoseinputsshouldbesolicitedandvalued,orisunimportant;Whetheranewproductideaisattractiveornot;Whetheraproductwhosedimensionshoverattheouterboundofacceptedtolerancesshouldbeshippedornot;etc.Organization'sCapabilitiestoInnovate(HenryC.Co)6ClearandConsistentValueEmployeesatmultiplelevelscanmakeindependentdecisionsthatareconsistentwiththestrategicdirectionandbusinessmodelofthecompany.Valuesreflectaconsensusaboutwhatmakessenseforthecompanyandtheindividualswithinit.GOALCONGRUENCY!Organization'sCapabilitiestoInnovate(HenryC.Co)7ProcessesPatternsofcommunications,interaction,coordinationanworkthroughwhichinputs(information,material,equipment,technology,labor,andmoney)aretransformedintoproducts/services.Processdifferinpurpose,visibility(formalversusinformal),‘embedded’routines(“That’sthewaywedothingsaroundhere.”)ProcessesandEfficiencyTwodifferentorganizationswithidenticalsetsofinputs,onemightcreatemorevaluethantheother.Organization'sCapabilitiestoInnovate(HenryC.Co)8ResourcesPeople,equipment,technology,productdesigns,brandreputations,information,cash,andrelationshipswithsuppliersandcustomers.Resources=assetsthatcanbehiredandfired,boughtandsold,upgradedanddepreciated.Transferableacrossthebordersoforganizationsmuchmorereadilythanprocessesorvalues.Knowledgeandskillsofapersonresideintheindividual,andleavetheorganizationifheorsheleaves.Processesandvaluesresidewithprofoundresiliencewithintheorganization.Organization'sCapabilitiestoInnovate(HenryC.Co)9CoreCapabilitiesOrganizations’CapabilitiesOrganizations’corecapabilitiesresideinitsprocessesandvalues.Processesandvaluesdefinewhatanorganizationcanandcannotdowithagivensetofresources.CoreCapabilitiesandCoreRigiditiesProcessesandvaluesthathaveenabledcertaintypeofinnovationsinthepast,canacttoconstraintheeffortsofcapableemployeestoinnovateindifferentways.Processestendtofacilitateanorganization’sabilitytocreatevaluewhennewtaskmatchescloselythetaskforwhichtheprocesswasoriginallydesigned.Thesameprocess,however,canimpedeemployees’effortstoexecuteothertypesoftasks.Organization'sCapabilitiestoInnovate(HenryC.Co)10AlternativeRoutesToPerformanceImprovementRelyonsuperiorresources.GMinvested$60billionduringthe1980sinautomatedmanufacturingequipmenttoimprovequalityandreducecost.TheLosAngelesLakersinthe60s.Developsuperiororganizationalcapabilities.Toyotaemployedmuchlesssophisticatedequipment,andhoneditsprocessestomakebetterproducts.TheBostonCelticsinthe60s.Organization'sCapabilitiestoInnovate(HenryC.Co)11StructureofDevelopmentTeams&OrganizationsLightweightteamsToexploitthecapabilitiesthatarerootedintheorganization’sestablishedprocessesandvalues.Membersareassignedtorepresenttheinterestsandcapabilitiesofmarketing,engineering,manufacturing,finance,procurement,etc.Theteam’sprimaryroleisacoordinativeone.HeavyweightandautonomousteamsVehiclesforbuildingnewprocessesandvalues--newcapabilities.Possessfullauthoritytomakealldecisionsrequiredfortheprojecttobesuccessful.Memberstakecollectiveresponsibilitiesforthesuccessfulexecutionofeveryaspectoftheproject.