OPERATIONAL AND STRATEGIC MANAGEMENT

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OPERATIONAL AND STRATEGIC MANAGEMENT
S-72.124 Product Development of
Telecommunication systems Strategic and
Operational Design

• Antti Ainamo, Professor, Ph.D.
• University of Tampere
• and
• Helsinki School of Economics and Business
  Administration

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Material on which this talk is based

• New organizational forms and strategy
• Ainamo, A. (1997)The Role of Nokia in the
  Finnish System of Innovation In. Competing from
  the Periphery. Edited by B. Fynes and S. Ennis.
  The Dryden Press.
• Fynes, B. and Ainamo, A. (1998) Organizational
  Learning and Lean Supply Relationships. Supply
  Chain Management., Vol. 3, Nor 2.
• Djelic, ML Ainamo, A. (1999) The Coevolution
  of New Organization Forms in the Fashion
  Industry A Historical and and Comparative Study
  of France, Italy and the USA. Organization
  Science, Special Issue on Strategic and New
  Organizational Forms, September-October
• Ainamo, A. Djelic, ML (2000)
  Image-and-Communication Portfolios, Strategic
  Management Society, submitted.
• Pantzar, M. Ainamo, A. (2000) Nokia the
  Suprising Success of Textbook wisdom, EGOS.
• Ainamo, A. Tienari, J. (forthcoming) Rise and
  Fall of a Local Version of Management Consulting
  The Case of Finland. In Management Consulting
  An Emerging Knowledge Industry. Edited by M.
  Kipping and L. Engwall. Oxford University Press.
• Product design and development
• Sakakakibara, K., Lindholm, C. Ainamo, A.
  (1995) Product Development in Emerging Product
  Markets The Case of Personal Digital Assistants
  (PDAs), Business Strategy Review.
• Ainamo, A. (1999) Strategic Product Planning.
  Hallinnon tutkimus.
• Ainamo, A. Pantzar, M. (2000) Design for the
  Information Society What Can We Learn From the
  Nokia Experience. The Design Journal.
• Ainamo, A. (2001) Knowledge Brokering A
  Perspective on the Birth, Evolution and
  Institutionalization of Models of Consumption.
  Finnish Journal of Administrative Studies.
• Case examples IDEO, Apple, Fujitsu, Palm, Nokia,
  Linux...

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Contents

• IDEO, a product design firm
• Some general principles of management
• Operational and strategic management
• Middle-up-down management
• Product design and development (PDD)
• A stages (relay-race) model
• A parallel (football) model
• A product-system-delivery matrix
• Knowledge brokering
• Managing, organizing and leading PDD strategically

(Ainamo 1999a, 1999b)
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The Need for Management in PDD

• Turbulent competitive landscape
• Technology
• Markets
• Other
• The customer values quality holistically
• Tensions between PDD disciplines
• Engineering
• Marketing
• Industrial design and graphic design
• The humanities
• Reasons for tensions Education, training, ...

(Ainamo 1999a, 1999b)
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Management

• Management is an interface between the
  organizational environment and the organization
• It involves day-to-day administration and
  paperwork, but also strategy and leadership, in
  the face of doing both at the same time and in
  many places
• Within this context
• Several alternative ways to integrate and
  coordinate organizational action
• Various kinds of attitudes to turbulence
• Many ways to cope with change resistance

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The alternatives to integrate and coordinate
organizational action

• Operational or bottom-up management
• Strategic or top-down management
• Middle-up-down management and knowledge management

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Operational management

• Bottom-up implementation
• Staying within boundaries / constraints
• Incrementalism
• Case Personal Digital Assistants
• Fujitsu, mid-1990s
• Palm Computing, late 1990s

(Ainamo 1999a, 1999b)
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Strategic management

• Top-down management of the general
• Creating and changing boundaries
• Radical (re)positioning of the business
• Case Personal Digital Assistants
• Apple Newton, early 1990s
• Case mobile phones
• Nokia, early to mid-1990s

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Middle-Up-Down Management Knowledge Management

• Strategy
• Middle-up-down
• Operational

Knowledge management
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Attitudes to turbulence

• Adapt
• Strategic choice
• Coevolution
• Being shaped
• Shaping the environment
• Dynamic interaction and interventions

(Ainamo 1999a, 1999b Djelic and Ainamo, 1999)
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Coping with change resistance

• Which alternative is more appealing for most
  people
• Win-lose and lose-win, or
• Win-win and lose-lose?
• Which alternative is more likely to decrease
  change resistance
• A performance gap and quick feedback, or
• A performance gap and slow feedback?
• Most people are willing to follow a leader

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A stages model of product development
(see also 1999b, 327)
Implementation delivery
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Design

• Conceptualizing new products
• The current state
• Ideal state(s)
• Conceptualization bridging the gap
• Refining concepts
• Drawings
• Mock-ups
• Prototypes

(Ainamo 1999a, 1999b)
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Technical product product engineering

• Translating the product concept into technical
  language
• Refining, reorganizing, analysing, and - in some
  cases - reconceptualizing design
• Product generations and product families
• Product architecture
• Product platform

(Ainamo 1999a, 1999b)
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Product generations, product families, and
product platforms

• Product generations
• Products follow a historic technical choice or
  theme
• Technical implications
• Living history analyze that history
• Product families
• Variations on a theme
• Marketing implications
• Groups of products
• Product platform
• the central component or module in the
  architecture
• Can be discovered or planned dominant design,
  architectural innovation, and/or mass
  customization
• Link between design, production and marketing
  faster, cheaper, and/or better

(Ainamo 1999a, 1999b)
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Managing complexity

• Break down complex systems into simple
  (sub)systems
• Manage each subsystem separately
• Manage the system of subsystems as a whole

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A product that is simple...

• is technically easy to handle
• is easy to use for the user
• can be boring for the user (!)
• introduces need to make product exciting
• Key drivers - marketing and design

(Ainamo 1999a, 1999b)
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Find role for each type of product
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Strategic PDD

• People busines
• Develop common language
• Understand subordinates but dont overdo it
• Treat tensions
• Explicit or tacit interventions
• Strategy is making choices
• Funding and support for learning and innovation
• Link with market development industry analysis
• Leadership
• An ideal
• constraints
• Bridging the gap, walking the walk

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New trends in PDD

• Always need for new product development
  methodologies
• Hero designers rare (Bell, 1999)
• Product development is multidisciplinary
• Organization design more important than product
  development
• Interaction
• Incorrect use of products (Ainamo Pantzar
  2000, Ainamo 2001)
• Learning
• Flexibility and customization
• Knowledge brokering
• Strategic design
• Knowledge brokering at several levels of the
  organization
• Peer relationships, fashion, and lifestyle
  (Ainamo and Djelic, forthcoming)

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Intraorganization and Interorganizational networks

• IBM ThinkPad in the early 1990s was based on
  parallel projects USA, Italy, and Japan, with
  Japanese bento box becoming the global choice
• Sony Walkman in the 1980s was based on an
  intraorganizational network and several
  technologies, including a small portable
  dictaphone, and ear phones, with convergence
• Product generations Nokia Mobile phones 1970s
  thru 2000s
• 1st Generation analog phones were based on
  complex systems and technical product engineering
• 2nd Generation digital phones which, once systems
  in place, both 1st and 2nd G were simple
  products, based on marketing
• 3rd G smart phones, communicators etc. are based
  on parallel PDD of all subsystems, esign of
  usability and user-friendliness critical

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Interorganizational networks the fashion industry

• Interorganizational networking is global only
  on a high level or abstraction
• Trust is the glue
• The basis of trust differs from one country to
  the next
• France regulation
• Italy socially embedded flexible networks
• The U.S.A the virtual organization
• Interorganizational networking differs from one
  country to the next
• (Finland government-technology links?)

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Lessons from fashion industry for mobile phones

• New strategic organization forms (input)
• Morphing constantly changing ideas
• and techniques (process)
• Identity and brands (output)

(Ainamo 1999a, 1999b) Ainamo, A. (1999c)
Fashion as Strategy Ideas and Techniques about
organizing in the Fashion Industry as a Model for
Stategy. Invited Paper and Presentation at INCAE,
San Jose, Costa Rica, Aug. 31. Hosts N. Phillips
and P. Martin de Holan. Ainamo and Djelic
(fortcoming) Reconstruction of an Organizational
Field.
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Knowledge Brokering

• Knowledge brokering is a process view of
  knowledge management (Ainamo 2001)
• Transfer of knowledge from where it is well
  known to where it is new and valuable (Ainamo
  2001, Hargadon 1998)
• Knowledge brokering cycle (Ainamo 2001, Hargadon
  1998)
• Access
• Learning
• Linking
• Implementation
• Middle-up-down management intermediates between
  strategic operational managemeent