Strategy-making for innovation management and the development of corporate universities

Abstract

Innovation is now seen as a question of corporate survival and international competitiveness. While most innovation fails, companies that don’t innovate in the long term die. The importance of crafting a sound and coherent innovation strategy appears crucial in many industries, even more in turbulent environments where clear guidelines help managers allocate R&D resources internally or acquire technologies outside the firm. The paper is organized the following way: in Sect. 2 the rigidity and structure related with strategic planning are compared with the flexibility and learning approach of strategy-making. In Sect. 3, organic (or internal) growth and external development of innovation are analyzed. In Sect. 4, the link between innovation strategy-making and R&D resource allocation is covered. In Sect. 5, a discussion section integrates and compares the key streams in the strategy-making literature that is particularly relevant for innovation management. Finally, in conclusion some areas for further research are suggested. Some authors argue that formal planning and incrementalism both form part of good strategic planning, especially in unstable environments. They also report that a period of learning in planning is also important. The crucial issue seems to be how individual learning is transferred to the organization and the shared mental models are what make the rest of the organizational memory usable. One tool which can stimulates such individual and organizational learning is the recent popularity of corporate universities. The aim of managers should be to institutionalize learning. It is necessary to strengthen and diversify competencies in an organizational process to so called “metacompetencies”. For Hamel and Prahalad, strategy is more than the allocation of scarce resources across competing projects; it is the quest to overcome resource constraints through a creative and unending pursuit of better resource leverage with the corporation conceived as a portfolio of competencies as well as a portfolio of businesses, and innovation projects. Incumbents that focus their network strategy on exploiting complementary assets through alliances generally outperform incumbents that focus on exploring the new technology. The technological strategies of corporate firms have several similarities to the investment strategy of venture capitalists. They are looking for complementarities between investments to nurture specialized knowledge and extract greater value with synergies. Appendix 2 proposes a new integrative model by making the connections between the strategy-making process and the R&D strategic resource allocation management process. Top managers should try to control the initial cost structure of new growth business, because it influence greatly the critical resource allocation decisions in that business, and also recognize emergent strategies through process such as discovery-driven planning and select the right mix of emergent versus deliberate strategies for each businesses in the organization. The determinants of product innovation in firms are mainly explained by the strategy being pursued and managers should be careful to not drift toward excessive conservatism or excessive entrepreneurship over innovation management. Some experts argue that strategic management, when continuously practised may develop in a firm core capability may have more enduring effects on the firm’s long-term performance than one-time strategies. Flexible strategic planning for innovation management appears more efficient, particularly in turbulent environments. A bottom-up approach of technology strategy-making favorizes the crafting of emergent strategies. One tool, communities of practice has an important influence on strategy-making for innovation management due to empowerment. A corporate university can become another influent knowledge management strategic tool, only if enough resources are devoted to its development and managers adopt a long-term perspective.

Appendices

Appendix 1

See Fig. 2.

Fig. 2

The process by which strategy is defined and implemented [38]

Appendix 2

See Fig. 3.

Fig. 3

Adapted from Rhéaume [39]