Syllabus

Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session

Course Overview and Objectives

Technological innovation is increasingly the source of sustainable competitive advantage for firms around the world. However, building an organization to successfully and repeatedly bring technological innovations to market is a daunting managerial challenge. In this course we focus on the practices and processes that managers use to manage innovation effectively. Over the semester we will examine four aspects of technological innovation: exploring, executing, leveraging and renewing innovation. Our focus will be on entrepreneurial firms (new and established) and on firms that have been successful and unsuccessful in their innovation.

15.351 is designed to provide both a deep grounding in the field of technological innovation for managers and entrepreneurs whose goal is to play a leading role in innovation-driven firms. The course combines lectures, case analyses, visiting experts and student presentations. The readings are drawn from research in the management of technological innovation and technology-based entrepreneurship as well as from economics and organizational theory. The cases provide an extensive opportunity to integrate and apply these tools in a practical, business context, and draw from a wide variety of firms and industries: established and entrepreneurial, mainly from high technology and many originating at MIT.

The material moves deliberately between strategic issues (what should you do?) and organizational and managerial issues (how should you get it done?), though the focus of the course is more on examples of process and implementation. The course design is grounded in the belief is that it is particularly dangerous to separate strategy from implementation (the "why" from the "how") when innovation is the issue because having a great idea is worth little or nothing if a firm cannot figure out how to commercialize or monetize that idea.

Innovation management can include a variety of topics; here are three clarifications about the approach we will take in this course: First, we will approach innovation issues from the entrepreneur and manager's perspective. While most firms have specialized R&D, other functions must all interface with R&D. Indeed, building an organization that can continuously generate and commercialize innovations is one of the core concerns of top management. Thus any leader should be conversant with the leading thinking on innovation and should not leave this challenge to the R&D function alone. Second, this course will approach the management of innovation from a strategic perspective. As such, we will consider the relationship between processes and structures for innovation in firms, the strategies for exploitation and the environment in which these must be designed e.g., competition, rate of technological change, sources of innovation.

Readings, assignments, and cases will be used to highlight issues and problems that face leaders as they create and implement processes, structures and strategies to strategically manage their technological innovation. By completion of the course, you will have:

1. A familiarity with current topics in strategic innovation management, such as innovation networks, idea brokering, open innovation;
2. A familiarity with innovation processes and structures such as R&D team and incentive design, R&D portfolio management, idea generation processes, the pros and cons of various R&D organizational structures, and the challenges of innovation in large and small firms;
3. An understanding of the strategies most effective for exploiting innovations;
4. The ability to apply these concepts directly to real world situations;
5. Skills to identify, evaluate, and resolve a variety of issues relating to poor innovative performance in large firms as well as entrepreneurial firms.

To achieve these goals the course is divided into four modules. The first three modules cover the following three areas: exploring, executing and exploiting innovations. The fourth module is renewing innovation and examines how established firms re-energize their exploration, execution and exploitation practices to renew the innovation base of their firm:

1. Module 1 - Exploring innovations — the processes used to explore innovations along the technology, market and strategy dimensions as the innovation moves from idea to market.
2. Module 2 - Executing innovations — the structures and incentives organizations must put into place to effectively allow talented individuals (from different functions) to execute innovation processes.
3. Module 3 - Exploiting innovations — the strategies that a firm must consider to most effectively exploit the value of their innovation, including innovation platforms that incorporate multiple product options, portfolios and standards.
4. Module 4 - Renewing innovations — the processes, structures and strategies for exploring, executing and exploiting innovations that established firms can use to renew their innovation foundations in the face of potentially disruptive innovations.

Life in the Classroom

This is not a lecture-based course. Classroom discussion is a vital part of your learning experience and is important for your grade (see below). You will need to come to class prepared to discuss the day's case and readings and to respond to the ideas and comments of others. I will (generally) facilitate a dialogue among the class participants rather than deliver a monologue. I expect your interactions to be informative, well-reasoned and constructive.

Required Readings

This is a case-based course. The primary reading material for most sessions is a case study. Often there will be additional readings associated with a session. These readings provide some conceptual frameworks that may help you in your case analysis. These readings come from a number of different sources (including academic research articles, short articles from both popular and business presses, and case studies) and have been carefully chosen to reflect a variety of perspectives and stimulate your thinking. Not all class materials will be discussed to the same extent.

Course Requirements and Grading

There are two basic requirements for the course: participation in class discussion and assignments.

Class Participation

This course depends heavily on class participation. Participation has three main elements: class attendance, informed involvement in class discussions and exercises, and blogging on the course website in response to the posted assignments. Participation counts for 50% of your grade and will be evaluated on an ongoing basis throughout the semester. Students will be graded on the quality of their comments in class and on the course website blog. You are expected to comment at least 10 times during class and blog at least 10 times during the course (in response to the posted class assignments of your classmates— see below). More than three unexcused absence will rest in zero points for attendance. Quality is judged based on:

1. your rigorous and insightful diagnosis (e.g. sharpening of key issues, depth and relevance of analysis);
2. your ability to draw on course materials and your own experience productively;
3. your ability to add substantively to class discussion and blog debate;
4. your ability to use logic, precision, and evidence in making arguments.

Group Assignments

There are three group assignments designed to consolidate learning from the first three course modules - exploring innovations, executing innovations, and exploiting innovations. Together these three assignments will account for 40% of your grade. For each module the assignment directions are the same although you can work with different team members if you wish. The assignments must be completed in teams of no more than three people. Each assignment is designed to take the main lessons of the module and to examine and document how they could apply, are applied and could be improved upon in a particular company. This is an opportunity to examine how managing innovation works "in practice" building on the experience of managers.

Final (Individual) Assignment

The final assignment is an individual assignment and will account for 10% of your grade. This is a three page paper in which you will have a chance to individually synthesize the ideas you have learned across the four modules. Your directive is to take the various elements of process, structure and strategy outlined in modules 1-3 and revisited in module 4 and consider how they can most effectively be designed to work to support one another, using a specific example. Alternatively you can document and illustrate how these elements can work in opposition and lead to failure — for example how an appropriate exploitation strategy was undermined by the wrong approach to exploration and execution or some other "disjuncture". You can draw on your interviews or on other materials. This paper is due two days after the last session.

Grading

Further information: Sloan Professional Standards