1

Prof. Dr. Andreas König, MBA, MMusChair of Technology, Innovation, and EntrepreneurshipUniversity of Passau

Industrie 4.0 als unternehmerische Gestaltungsaufgabe: Die fundamentale Rolle der Strategischen Sensitivität

Passau, 21. November 2014

2

Why do great companies fail?

What makes breakthrough innovations succeed?

3

Value capturingValue creation

Valuecreated

Value created

CostsPerceivedbenefit

Competitive discount

Strategic sensitivity scrutinizes paradigms about how value is created and created in an industry

Self-authenti-zation

More time for family

Happi-ness

…

Profit

Price

Material Costs

Labor

Other costs

Benefit that is:• important• perceivable

1

Source: Enders, König, Hungenberg, Engelbertz ”Towards an integrated perspective of strategy,” Journal of Strategy and Management, 2009

„Value Process Framework“ as basis of a strategic paradigm

Potential trade-off between benefit and costs

2

Value created that is:• unique• sustainable

3

5

6

Established players are in danger if they lack strategic sensitivityIncumbent inertia as reaction to discontinuous strategic innovations

“Incumbent inertia”

Difficulties of established players to enact internal

change in the face of significant external change

Strategic breakthrough innovations

• New dimensions of customer value (e.g., Hilti, Amazon)

• New ways of value creation (e.g., Ikea, Airbnb, Blue Nile)

• New revenue structures(e.g., Google, Nespresso)

7

Develop a culture of „Strategic Sensitivity“ in your organization!Fundamental steps towards breakthrough innovations in the context of Industry 4.0

1. Develop strategic understanding at the bottom level of your organization and stay in touch with the world at the top (away from silos and PPT charts)

2. Observe and think “beyond the obvious” – this is where the big and rich ponds are

3. Develop a team culture of small failures instead of the big quick win

4. Foster communication skills of your employees to allow cross-functional teamwork (especially with IT)

5. Balance: think in innovation portfolios

6. Use your tools and connections – it’s all right there!

Source: König, 2013

8

9

10

Besides lack of touch with „the world out there,“ established organizations lack strategic sensitivity at their fundamentResource-allocation process according to Bower (1976) and Burgelman (1983)

Commitment

• Defines goals and strategy of the organization

• Mediates between top and lower management

• Translates strategy into operations

• Defines economical and technical characteristics of new investments

• Evaluates project proposals

• Evaluates project proposals

• Supports project proposals

• Develops and argues for project proposals

Impetus Definition

• Decides for/against projects

• Continuously re-commits resources

• Commits time and attention to projects

• Commits time and attention to projects

Structural context / Strategic context / Cognitive framing

Top-Management

Middle-Management

LowerManagement

Lacking strategic understanding and

mindset

Out of touch with “the world out there”

Source: Adapted from Bower (1970), Burgelman (1983b), Gilbert (2006); see König, 2009, p. 42

11

12