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Lecture 1
- Henderson & Clark: architectural innovation: the reconfiguration of existing
product technologies and the failure of established firms
Traditional categorization of innovation as either incremental or radical is incomplete and
potentially misleading and does not account for the sometimes disastrous effects on industry
incumbents of seemingly minor improvements in technological products.
Incremental innovation: relatively minor changes to the existing product, exploits the potential of
the established design, and often reinforces the dominance of established firms.
Radical innovation: opens up whole new markets and potential applications, and so, create
great difficulties for established firms. And can be the basis for the successful entry of new firms
or even the redefinition of an industry.
> both innovations require quite different organizational capabilities.
Organizational capabilities are difficult to create and costly to adjust. Incremental innovation
reinforces the capabilities of established organizations, while radical innovation forces the mto
ask a new set of questions, to draw on new technical and commercial skills and to employ new
problem-solving approaches.
Conceptual framework
Architectural Innovations: change the way in which the components of a product are linked
together, while leaving the core design concepts (and thus, basic knowledge) untouched.
- En dan radicaal, compleet nieuw en incrementeel beetje nieuw, toepassing op..
Component: physically distinct portion of the product that embodies a core design concept and
performs a well-defined function.
The choice of design concepts establishes a core concept of the design.
Successful product development requires two types of knowledge: component knowledge
(knowledge about each of the core design concepts and the way in which they are implemented
in a particular component) and architectural knowledge (knowledge about the ways in which the
components are integrated and linked together into a coherent whole).
Types of technological change
Schumpeter has an emphasis on creative destruction.
Figure 1> horizontal dimenson> innnovation’s impact on components. Vertical dimension>
linkages between components. There are other ways to characterize different kinds of
innovation.
- Radical and incremental innovations are extreme points along both dimensions. Radical
innovation establishes a new dominant design and a new set of core design concepts
linked together in a new architecture. Incremental innovation refines and extends an
, established design. Improvement occurs in individual components, but underlying core
design concepts and the links between them, remain the same.
- Figure 1 is designed to suggest that a given innovation may be less radical or more
architectural, not to suggest that the world can be neatly divided into four quadrants.
The essence of an architectural innovation is the reconfiguration of an established system to link
together existing components in a new way. Architectural innovation is often triggered by a
change in a component that creates new interactions and new linkages with other components
in the established product. The core design concept behind each component remains the same.
Improvements in blade design (is voorbeeld van ventilator) or in the power of the motor would
be incremental innovations. A move to central air conditioning would be a radical innovation. For
the maker of large, ceiling-mounted room fans, the introduction of a portable fan would be an
architectural innovation (because primary components would be largely the same) but
architecture of the product would be quite different. There would be significant changes in the
interactions between components.
Incremental innovation reinforce competitive positions of established firms cause it builds on
their core competencies or is competence enhancing. On the existing architectural and
component knowledge, radical innovation creates unmistakable challenges for established
firms, it destroys the usefulness of their existing capabilities.
Architectural innovation presents established firms with a more subtle challenge. What the firm
knows is useful and needs to be applied in the new product, but some of what it knows is not
only not useful but may actually handicap the firm. Recognizing what is useful and what is not,
and acquiring and applying new knowledge when necessary, may be quite difficult for an
established firm because of the way knowledge is organized and managed.
,The evolution of component and architectural knowledge
Two concepts to understanding the ways in which component and architectural knowledge are
managed inside an organization are: dominant design and that organizations build knowledge
and capability around the recurrent tasks that they perform. Thus, one cannot understand the
development of an organization’s innovative capability or of its knowledge without
understanding the way in which they are shaped by the organization’s experience with an
evolving technology.
The merge of a new technology is usually a period of considerable confusion, there is a great
deal of experimentation. This comes to an end by the emergence of a dominant design, which is
characterized by a set of core design concepts that correspond to the major functions performed
by the product and embodied in components and by a product architecture that defines the
ways in which these components are integrated.
Dominant design often emerges in response to the opportunity to obtain economies of scale or
to take advantage of externalities.
Once a dominant design is established, the initial set of components is refined and elaborated,
and progress takes the shape of improvements in the components within the framework of a
stable architecture.
Before the dominant design, organizations competing to design successful products experiment
with many different technologies. After the emerge of a dominant design, acceptance of a single
architecture, firms invest in learning about alternative configurations of the established set of
components. New component knowledge becomes more valuable to a firm than new
architectural knowledge because competition between designs revolves around refinements in
particular components. Successful organizations switch limited attention from learning a little
about many different possible designs to learning a great deal about the dominant design.
Since architectural knowledge is stable in an industry characterized by a dominant design, it
becomes embedded in the practices and procedures of the organization.
Channels, filters, and strategies.
An organization’s communication channels are critical to its task and thus critical to effective
design. They are the relationships around which the organization builds architectural
knowledge.
Communication channels that are created between groups (bv motor en blade group) will reflect
the organization’s knowledge of the critical interactions between them. They report to the same
supervisor.
The information filters of an organization embodies its architectural knowledge. An organization
is constantly barraged with information, so the organization develops filters that identify
immediately what is most crucial in its information stream. The emergence of a dominant design
molds the organization’s filter. They will ignore irrelevant information.
, As a product evolves, information filters and communication channels develop and help
engineers to work efficiently, but the evolution of the product also means that engineers face
recurring kind of problems: the engineer does not re examine all possible alternatives, but
focuses on those that he/she has found to be helpful in solving previous problems. So
problem-solving strategies summarize what an organization has learned about ways to solve
problems in its immediate environment. This can also give routine problems (niet alles bekeken)
The strategies designers use, their channels for communication, and their information filters
emerge in an organization to help it cope with complexity. Using them becomes natural.
Architectural knowledge is stable once a dominant design has been accepted, thus becomes
implicit. Actively engaged in incremental innovation organizations, with stable architectural
knowledge, manage their architectural knowledge implicitly by embedding it in their
communication channels, information filters, and problem-solving strategies. Component
knowledge is more likely to be managed explicitly because it is constant source of incremental
innovation.
Problems created by architectural innovation
Differences in architectural and component knowledge managing give insight into why
architectural innovation often creates problems for established firms: Established organizations
require significant time (and resources) to identify a particular innovation as architectural , cause
it can be accommodated within old frameworks. Radical innovation need new modes of learning
and new skills. But information that might warn that innovation is architectural may be screened
out by information filters and communication channels from old architectural knowledge since
radical innovations change core design concepts.
The introduction of new linkages is much harder to spot since core concepts of design remain
untouched, the organization may mistakenly believe that it understands the new technology.
Now different designers may be talking about the wrong things that may only become apparent
after failures or problems. (unexpected architectural innovation)
Organizations facing threats may continue to rely on their old frameworks and misunderstand
the nature of a threat, they go back into patterns with which the yare familiar.
Once the nature of an architectural innovation is recognized, it faces more problems: the need
to build and to apply new architectural knowledge effectively. They need to switch to a new
mode of learning and invest time and resources in learning about the new architecture. They
are handicapped in attempts to do this by the difficulty all organizations experience in switching
from one mode of learning to another and by the fact that it must build new architectural
knowledge in a context in which some of its old architectural knowledge may be relevant.
As long as the dominant design remains stable, an organization can segment and specialize its
knowledge and rely on standard operating procedures to design and develop products. New
entrants find it easier to build the organizational flexibility that abandoning old architectural
knowledge and building new requires.
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