Organization for Innovation

1. Organization for Innovation Rev: Nov, 2012 Euiho (David) Suh, Ph.D. POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management EngineeringPOSTECH

2. The Range of Structural Options

3. Intrapreneurship • Intrapreneurship • Act of behaving like an entrepreneur while working within a large organization

4. Skunkworks (1/2) • Skunkworks • Project typically developed by a small and loosely structured group of peoplewho research and develop a project primarily for the sake of radical and creative innovation • Origin of the name • Originated during World War II when the P-80 Shooting Star was designed by Lockheed’s Advanced Development Projects Division in Burbank, California • A closely guarded incubator was set up in a circus tent next to a plastics factory in Burbank. The strong smells that wafted into the tent made the Lockheed R&D workers think of the foul-smelling “Skunk Works” factory in Al Capp’s Li'lAbner and the job no one wanted: to be the inside man at the Skunk Works.  Generalized to similar high-priority R&D units Typically referring to technology projects developed in semi-secrecy (e,g., Google X Lab) • Characteristics of Skunkworks • Often operating with a high degree of autonomy and unhampered by bureaucracy,tasked with working on advanced or secret projects • Often undertaken in secret with the understanding that if the development is successful then the product will be designed later according to the usual process

5. CEO Engineering R&D Production Marketing Skunkworks Skunkworks Organization

6. Matrix (1/2) • Matrix structure • Form of organization based on horizontal(project) and vertical relationships(function) • Combining the best of both separate structures • Simple lattice emulating order and regularity demonstrated in nature. • Hypothetical example: A company that producing two products, "product a" and "product b“ • Organizing functions within the company as follows:“Product a" sales dep., “Product a" customer service dep., “Product a" accounting dep.,“Product b" sales dep., “Product b" customer service dep., “Product b" accounting dep. • Types of matrix structure • Weak/Functional Matrix • A project manager: Overseeing the cross- functional aspects of the project with only limited authority • The functional managers: Controlling over their resources and project areas. • Balanced/Functional Matrix • A project manager: Oversee the project • Equally shared power between the project manager and the functional managers • Bringing the best aspects of functional and projectizedorganizations • The most difficult system to maintain as the sharing power is delicate proposition • Strong/Project Matrix • A project manager: Primarily responsible for the project • Functional managers: Providing technical expertise and assign resources as needed.

7. Matrix (2/2) Matrix structure

8. CEO Engineering IBU Production Marketing R&D R&D Eng Prod MKT Independent Business Unit • Independent Business Unit (IBU) • Separate business unit for the innovation • Including their own functions which are required

9. CEO V1 V2 V3 V4 New Ventures Dept. Product Div. Product Div. Product Div. Product Div. New Venture Department • New venture department • Separate department for the new innovations • Concept of venture company within the holding company