Technology-based business transformation

Lectures: 1 session / week, 3 hours / session

This seminar will examine how to leverage major technology advances to significantly transform a business and an industry in the marketplace. The seminar will draw heavily from the concrete experiences of IBM's major transformation in the second half of the 1990s, when it aggressively embraced the Internet and came up with its e-business strategy. The Internet and e-business played a key role in helping IBM survive the near-death experience that it went through in the early 1990s, reinvent just about all aspects of the company and once more become a leader in the IT industry.

The course will focus on the major issues that a business must deal with to successfully transform its technical and market strategies, including the organizational and cultural aspects that often cause such business transformations to fail. We will place a special emphasis on transformations that are caused by highly complex, advanced technologies like the Internet. We will discuss how such transformations require that managers have a very strong "systems" and technical intuition to enable them to make general management organizational, business and marketing decisions. We will also explore how the kind of "holistic" thinking that you would expect from good engineers might translate into a business advantage in formulating and executing market strategies.

The first seminar will be an introduction to the overall course, including the huge competitive pressures that every business faces to keep innovating so they can survive. We discuss IBM's own near-death experience in the early 1990s, and how it reinvented itself by embracing a number of major technology, market and organizational innovations.

The next seminars will discuss what goes into formulation a technology-based strategy. This includes understanding how to evaluate the opportunities, risks and limitations that this presents to a business, and what other companies, including competitors are doing. We will have detail discussions for what it takes to formulate technical and market strategies, including what works and what does not and why, false starts and how to quickly evaluate them and change course.

We will next focus on how execute the strategy in the marketplace. This includes doing a detail market and application segmentation to identify the most promising and practical ways to get started, engaging with customers in early pilots so they can help shape the strategy, and the role of communications at various levels, from press to advertising, to have a simple set of messages in the marketplace and start building mind share. We will discuss the need for a close interplay between the technical work in the laboratories and the activities in the marketplace in order to arrive at a successful strategy.

Next we deal with the very important issues involved involved in trying to build any kind of new business in an existing company, especially a business like the Internet and e-business that cuts across the whole company and is transformational in nature. We will look at the role of internal and external communications in shaping the culture, the balance between grass roots efforts, - usually led by the technical community in the company, with top down leadership which is led by senior executives, and the many ways that things can go wrong and derail the business transformation, often with dire consequences to the business.

The critical role of technology-based, disruptive innovations to a business

The IBM near-death experience of the early 1990s

Gerstner, Louis V. Who Says Elephants Can't Dance. Part II; part I optional.

Christiansen, Clay, and Michael Raynor. Innovator's Solution. Chapter 1.

Strategy formulation - key external factors

Initial discussion of class project

Christiansen, Clay, and Michael Raynor. Innovator's Solution. Chapters 2 and 8.

Henderson, Rebecca. "Architectural Innovation."

Strategy formulation - the internet and the Web as major disruptive forces

Coming up with the IBM internet strategy

The future of the internet

John Patrick - President, Attitude LLC; Internet Pioneer; retired IBM executive

Christiansen, Clay. Meeting the Challenge of Disruptive Change.

Christiansen, Clay, and Michael Raynor. Innovator's Solution. Chapters 3 and 4.

Operationalizing the Strategy - key internal factors

Market and application segmentation, internal measurements, management reviews

Operationalizing the Strategy - Key external factors

Major role of market experimentation and end-user innovation

von Hippel, Eric. Democratizing Innovation. Chapters 1, 2, 3, 4; other chapters optional.

Thomke, Stefan. "Enlightened Experimentation."

Overview of course so far

Mid-term discussion of class projects based on team submission of short (2 page) proposal

Market-based experimentation as a major part of strategy formulation and execution

LL Bean and e-commerce strategy

LL Bean and technology-based innovation

Chris McCormick - CEO, LL Bean; e-commerce pioneer

The major role of marketing and communications in strategy formulation and execution

The IBM e-business marketing and communications strategy

Chris Wall - Senior Partner, Ogilvy and Mather; lead O&M executive in formulating IBM's e-business market strategy

"Dinosaurs?" Fortune 127, no. 9 (May 3, 1993).

"IBM Means e-business." Information Week, February 9, 1998.

"Internet Business Machines." Business Week e.biz, December 13, 1999.

Henderson, Rebecca. "Managing Innovation in the Information Age."

Nadler and Tushman. "Beyond the Charismatic Leader."

Leonard Barton, Dororthy. Core Capabilities and Core Rigidities. (Optional)

Gerstner, Louis V. Who Says Elephants Can't Dance. Parts III and IV; part V optional.

Christiansen, Clay, and Michael Raynor. Innovator's Solution. Chapters 7, 10, and epilogue.

Class project presentations and discussions (cont.)

Final overall discussions

Don't show me this again

This is one of over 2,200 courses on OCW. Find materials for this course in the pages linked along the left.

MIT OpenCourseWare is a free & open publication of material from thousands of MIT courses, covering the entire MIT curriculum.

No enrollment or registration. Freely browse and use OCW materials at your own pace. There's no signup, and no start or end dates.

Knowledge is your reward. Use OCW to guide your own life-long learning, or to teach others. We don't offer credit or certification for using OCW.

Made for sharing. Download files for later. Send to friends and colleagues. Modify, remix, and reuse (just remember to cite OCW as the source.)

Learn more at Get Started with MIT OpenCourseWare