Value Architecture: Building an Innovative Organization - IEDP
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Value Architecture: Building an Innovative Organization

To transform, adapt, gain competitive edge and make a mark


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The business landscape today is very different to how it was in the previous decade of high economic growth, now haunted by the recent global recession. Businesses are working hard to transform and adapt in order to stand out from their competition and make their mark in a new environment. If you look at research on this subject, the key concepts for executives to focus on are the same everywhere: strategic thinking, creativity, innovation, etc.

Business schools are offering executive education programs specifically highlighting these directions. In particular, the importance of innovation and its need to be strategically incorporated in business planning is being stressed by professors at leading institutions. It is no longer enough to simply consider innovation in the context of new products or services; companies need to think about reinventing their entire business models altogether.

“In today’s global economy, few business models last for long, even when very successful” says Professor Ron Williams of UNC Kenan-Flagler Business School, who previously worked at IBM for 15 years. Alongside other professors, he teaches the “Strategic Innovation for the New Business Environment” open program. His session is titled “Beyond Innovation: Making Transformation Business as Usual,” in which participants study how companies like Amazon and Apple search for market opportunities, manage their resources and continue to create value in the face of expanding choices.

Through the example of industry-leading companies, participants examine business innovation at its best, and ultimately learn how to make innovation “the norm” in their business models. “Every company has ‘value architecture,’” says Williams whose research focuses on business model innovation. According to Williams, this value architecture defines how a company manages its resources and the unique ways it adapts and changes according to the external environment. Today’s leading companies are redefining their value architecture and building new business models, now becoming predators not the protectors of the traditional models that made them.

Understanding these changes and the role of innovation in the new business environment forms a key part of this program at the school. Some of the other sessions on the program include looking at the design and delivery of world-class innovation, innovation and corporate entrepreneurship, and marketplace trend analysis.

In fact, trends in innovation and their analysis, such as the increasing appeal of collaborative arrangements, or “co-creation,” is also stressed upon by other professors at other schools. In a Forbes’ article, IMD’s Professor Bill Fischer said that “for decades, business school teaching on innovation focused on building more effective filters to avoid the pursuit of ideas that wouldn't lead to commercial success. Today it's almost the reverse.” Fischer teaches on the “Driving Strategic Innovation: Achieving High Performance Throughout the Value Chain” open program, which is offered in conjunction with MIT Sloan Executive Education. According to Fischer, previous participants of the program all leaned towards co-creating with value-chain partners (i.e. suppliers or customers) when asked to describe innovation solutions. He goes so far as to say “co-creation is the way of the future for all corporate innovative activity and collaboration,” and this is a key focus of the IMD-MIT program.

The challenge of innovation is being faced by executives everywhere, as companies struggle to find their place and make their mark in a new, post-downturn business landscape. Leaders will need to think outside of their comfort zones and a number of business schools have caught on to this and are providing them with the needed guidance, tool kits, action plans, etc.


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