MBA 624 Strategic Management of Technology and Innovation

enrolled in Medaille College's MBA 624 in Summer 2006

interested in information technology and organizational change

interested in Medaille's curriculum

Broadband Nation

Once a leader in Internet innovation, the United States has fallen far behind Japan and other Asian states in deploying broadband and the latest mobile-phone technology. This lag will cost it dearly. By outdoing the United States, Japan and its neighbors are positioning themselves to be the first states to reap the benefits of the broadband era: economic growth, increased productivity, and a better quality of life.

In the first three years of the Bush administration, the United States dropped from 4th to 13th place in global rankings of broadband Internet usage. Today, most U.S. homes can access only "basic" broadband, among the slowest, most expensive, and least reliable in the developed world, and the United States has fallen even further behind in mobile-phone-based Internet access. The lag is arguably the result of the Bush administration's failure to make a priority of developing these networks. In fact, the United States is the only industrialized state without an explicit national policy for promoting broadband.

That article is from a year ago. Now, the US has dropped to 19th in household broadband penetration. If these trends continue, we will be passed by Slovenia in early 2007. Not only that, but what we call broadband is anything faster than a 56K modem.

	Price/ Month (USD)	Top Speed Downstream (Mbps)	Top Speed Upstream (Mbps)	Price/Month/ Downstream Mb (USD)
US - FIOS	199	30	5	6.63
US - DSL	38	3	.7	12.65
US - Cable	60	6	.7	9.99
Korea	38	100	100	0.34
Japan	41	100	100	0.41

The playing field is being leveled, says globalization guru Thomas Friedman - from Shanghai to Silicon Valley, from al Qaeda to Wal-Mart.

If the world is flat, then nationality doesn't matter. The internet doesn't care that some geopolitical abstraction called the United States is the world's consumer while another geopolitical abstraction called China is the world's manufacturer.

Does it matter how one country ranks against another? Is that any different from how one region of a country ranks against the other regions? So what, as long as the world's economy is prospering as a whole?

If NY or some other state is at the bottom of some ranking, so what? Some state will always be at the bottom, just as some country will always be 19th in household broadband penetration.

The Internet Made Me Do It

I went to my first computer conference at the New York Hilton about 20 years ago. When somebody there predicted the market for microprocessors would eventually be in the millions, someone else said, "Where are they all going to go? It's not like you need a computer in every doorknob!"

Years later, I went back to the same hotel. I noticed the room keys had been replaced by electronic cards you slide into slots in the doors.

There was a computer in every doorknob.

Danny Hillis

Factoid: According to Business Week, by 2005, factories produced more transistors world-wide (and at a lower unit cost) than farms produced grains of rice.

On January 21, 2000, President Clinton told an audience at California Institute of Technology, as reported by the Associated Press:

"It is changing everything about the way we work and live and relate to each other," Clinton said of the Internet, saying the computer network is a major reason for the nation's continued economic growth, which is on pace to break all previous records next month.

His own administration also should get credit for managing a changing economy well, Clinton told students and faculty at the California Institute of Technology. But he acknowledged that to a degree, what the government did best was stay out of the way.

"The real reason this thing keeps going on and on and on is all we did in the government was to set the conditions and provide the tools for the American people to succeed," Clinton said in his address.

"The real reason is the exponential growth in information technology and how it is rifling through every other sector of our economy," creating jobs no one had heard of a few years ago and reinforcing other scientific advances, he said.

On the other hand, economics columnist Robert Samuelson wrote recently for Newsweek about Big Things:

Technologies acquire historical weight by reshaping the human condition. Gutenberg's press led to mass literacy, fostered the Protestant Reformation and, through the easy exchange of information, enabled the scientific revolution. In the 19th century railroads created a truly national American market that favored mass production and the consumer society. To join this league, the Internet must be more than e-mail or a marketing platform. If you buy a book or car on the Net, the critical part of the transaction is still the book or car. Especially in business-to-business commerce, the Internet may improve efficiency through more price competition and supplier choice. But these are changes of degree, not kind. ...

Even if the Internet flourishes, it may remain smaller than earlier Big Things. Our historical amnesia could benefit from the words of a Tennessee farmer at a church meeting in the 1940s. "Brothers and sisters, I want to tell you this," he said. "The greatest thing on earth is to have the love of God in your heart, and the next greatest is to have electricity in your home." Can the Internet really top that?

Can it? How important is the Internet? Is it the biggest Big Thing since the printing press around 1450? Since the steam engine around 1800? Or since the CB radio craze around twenty years ago? (Raise your hand if you even remember CB radio!)

The Living Company (Harvard Business School Press, 2002), Arie de Geus looked at thousands of companies to discover what it takes to adapt to changing conditions. He found that the life expectancy of the average company was only 40 years. He also looked at the 100 largest U.S. companies at the beginning of the 1900’s. Only 16 are still in existence. He concluded:

Companies die because their managers focus on the economic activity of producing goods and services, and they forget that their organizations' true nature is that of a community of humans.

To try to control a community of humans is poor leadership, in my opinion. But as we all know from personal experience, leadership and management are not the same thing.

What about when you're running things? How will you decide what's going to happen next?

Takeaways

Important ideas to take away from this course:

Ideas are cheap. The essence of business success is execution, not ideas.

What's coming soon with digital networks will make the innovation so far look tame.

These driving forces of change are highly disruptive and inexorable.

The resistance to change is massive and powerful, roughly proportional to the degree of disruption.

A lot of money will be made and lost in the process.

Code is law: first the technical architecture changes, then the social norms, then the markets, and finally the politicians and regulators catch up.

Our public and corporate policies are changed by policy makers and decision makers who are not prepared to change fast enough. Most of them don't "get it".

In an organization, innovation happens best as it does in society and in nature, in an environment conducive to it. It does not happen according to a top-down strategic plan. The parallels with biological evolution are illuminating.

It is difficult to tell the difference between deviance and innovation, especially at first glance.

Most businesses leading their markets today will not be able to adapt; they will be replaced by start-ups and spin-offs.

Most supervisors you have had and most organizational structures you have known are negative, not positive, models for the future.

This course ...

It's easy to say that change is the constant, that the only thing that doesn't change is the fact of change. When you don't know what's going to happen next, it's hard to manage change, especially innovations, and even more especially innovative technology. These days, that means the Internet, which some would say is more than innovative. It's disruptive. It's revolutionary.

The questions MBAs must answer: do you make it up as you go along? or do you have a management philosophy firmly rooted in human nature and history? do you see into the future clearly?

The larger questions: can change be managed? or does stuff just happen? If it doesn't just happen, why does it happen? Why do things change? What drives change? What restrains it?

What kind of wizard are you? The fantasy figure, top left? John Napier, right, (1550–1617) was a Scottish mathematician, physicist, astronomer / astrologer and necromancer at a time when the distinction between science and magic was not well understood. Napier used the Book of Revelation to predict the Apocalypse and the end of the world in 1688 or 1700. He is most remembered as the inventor of logarithms and for popularizing the use of the decimal point.

What research and developing technologies will, in the future, provide innovative products and services worth investing in?

18

When the great Tao is forgotten, kindness and morality arise. When wisdom and intelligence are born, the great pretense begins.

When there is no peace within the family, filial piety and devotion arise. When the country is confused and in chaos, loyal ministers appear.

If we could abolish knowledge and wisdom, then people would profit a hundredfold.

If we could abolish duty and justice, then harmonious relationships would form.

If we could abolish artifice and profit, then waste and theft would disappear.

The Course

Find out all the official stuff. How is this course described in the college catalog? What are you going to know more about? What are you going to know how to do better? What's the self-assessment all about?

Note | Although automating shop-floor production, the subject of many MBA 624-type courses and textbooks, is interesting and important, we have an ops management course in the program, so managing current technology will get pushed to the sidelines in our MBA 624 because of the imperative of the Internet and the astounding opportunities in the near future for those who can see it coming.

The Syllabus

This is the page to bookmark. It will change often and be the place to learn what we're going to do in class and what you should do before class.

The Case

In this course, you'll learn by doing. We're going to pretend that you work for Parkside Partners, and that I'm your boss. If the course were Mission Impossible, the Case page would be the tape-recorded message at the beginning, except that it wouldn't self-destruct until the end of June, when the course is over. "If you choose to accept this mission ...."

The Roundtable

Carefully chosen words, crafted paragraphs, and logical arguments are terrific tools for communicating in organizations and for influencing others. This course addresses so many hot current issues and events that it's hard to know where to begin. The Roundtable gives you common readings and focused questions to address yourselves to in an orderly manner.

The Bistro

The ideas at the top of this page are meant to be provocative. The Ground Zero Bistro is the place to talk about it. Ask questions and get answers.

The Reports

In addition to the final presentation, you have several preliminary reports to do in class and on the Web. What are the other students doing? When are the preliminary reports due? How will they be evaluated?

Something's happening here but you don't know what it is, do you, Mr. Jones?
-- Bob Dylan

Any sufficiently advanced technology is indistinguishable from magic.
-- Arthur C. Clarke

MBA 624: Strategic Management of Technology and Innovation

Medaille College - Summer 2006