Strategic management of technology and innovation 2023: A reflection

Last June to August I got an opportunity to teach the course “Strategic management of technology and innovation” again at IIM Bangalore. I have been teaching this elective for the last five years. The class is a mix of part-time MBA (PGPEM) and full-time MBA (PGP) students. Every time I learn a lot through the process of preparation and class interaction. In this article, I present three things that stand out in my reflection and two questions where my gut feeling was significantly different from the class.

Starting a business, Dunzo, and the art of iteration: During the first half of the course, we explored the question, “How do I build innovation stamina systematically?” One of the frameworks we used was 2-loops of innovation – the idea-to-demo loop validated feasibility and desirability assumptions while the demo-to-cash loop validated scalability and profitability assumptions. We used the 2-loops lens to look at the starting of various businesses like Kodak, Dunzo, Ather Energy, Husk Power Systems, etc. For each iteration, we analyzed four parameters - speed, cost, quality of feedback, and cognitive biases, especially confirmation bias.

Dunzo turned out to be interesting on multiple fronts. It was more relatable as compared to Kodak (hardly anyone had used Kodak camera) and Husk Power (little experience with off-grid villages). For the first six months, until it grew to a few thousand customers, Dunzo was running on WhatsApp. Later it adopted mobile apps, cloud, and analytics. Dunzo also experimented with drone delivery. It was a good example of how a business can start low-tech and iteratively become more high-tech. Founders spoke the language of hypothesis testing and customer focus. Customer and delivery partner experience was also improved over the years. And yet, Dunzo remained in the news for cash crunch and market share erosion throughout the course duration. When asked, which is easier to fix – a broken customer experience or a broken business model? Almost the entire class felt a broken business model was easier to fix. However, we found it easier to find counter-examples for the latter – Dunzo, WeWork, Micromax, and Kingfisher – all had decent customer experience but struggled to fix their business model. In case you have any examples where a broken customer experience couldn’t be fixed, happy to learn from you.

Titan, smartwatches, and the surfing of technology waves: In the second half of the course, we shifted focus to enabling and management of innovation. We restricted ourselves to listed companies and used only secondary sources for discussion such as annual reports, CXO interviews, and quarterly earnings call transcripts.

Surfing a technology wave is not easy, too early and you might create technology debt, too late and you risk losing to the competition. We explored how various companies responded to technology waves – IBM-Internet, Titan-smartwatches, Vimeo-video marketing, Amara Raja Batteries-Li-Ion, Lego-sustainability, Amazon-speech recognition, and AMD-data centers. For example, we asked, “Was Titan late in responding to the smartwatch wave?” This was interesting because 75% of the class wore smartwatches and none had a Titan. So, on the face of it, the answer was obvious. However, as we dug into the reports, we found the answer to be much more nuanced and the game is far from over. We used the "real-win-worth it" framework to guess investment, no-investment, and divestment decisions. For example, we asked, “Was it real, win, or worth it criteria that may have led to Ford Motors divesting in Level-5 autonomous car startup, Argo AI?”

AI, creativity, and artificial insight: When the course began in June, ChatGPT hangover was still lingering. I didn’t change the nature of assignments or projects. However, referencing norms became stricter. The fact that AI is going to be a powerful force going forward was given. The challenge for me was to show how to see through the fog and hype. This is where guest lectures helped. Ravi Aranke showed how to use ecosystem tracking – users (individual and paid), startup investments, enterprise adoption, regulatory bodies, expert conversions (experts shifting their opinions), and professionals (marketing, lawyers, doctors, CAs, recruiters) to create one’s view. Sunil Mishra showed how one can build a local chatbot using Python’s langchain library and highlighted generative AI’s banking uses-cases.

We looked at the surprising move 37 during AlphaGo vs Lee See dol 2016 Go game and asked, “Was move 37 creative?” It was one of the moves which the professional Go players thought as a mistake at the first sight and then realized it was part of an intentional strategy. Almost the entire class felt that the move 37 was not creative. Personally, I felt the move was creative, but it also created an opportunity to learn about what creativity means to different people. I also tried to give a glimpse of how Karl Friston shows curiosity and insight can be simulated by synthetic agents using active inference framework. Of course, active inference is primarily used to explain natural intelligence but he and other researchers have also put forward a proposal for how it may lead to distributed super-intelligence.

A potentially game-changing emerging technology which I thought I could spend some time on was genetic engineering - CRISPR, prime editing, etc. Unfortunately, I fell short on my preparation as well as the availability of time. However, I managed to use fiction for the first time as a source of use cases. We looked at a short case prepared from Kazuo Ishiguro’s novel “Klara and the Sun” to classify use cases into current, near-future, distant future / impossible buckets. Ishiguro’s novel unfolds on the backdrop of AI, robotics, and genetic engineering.

Building innovation stamina: 4 basic workouts

When it comes to building running stamina, workouts may include a combination of stretching, slow runs, sprints, strength training, etc. What kinds of workouts are involved in building innovation stamina? Let’s look at 4 key components of innovation stamina and identify a basic workout for each of them. The 4 components are curiosity stamina, experimentation stamina, communication stamina, and collaboration stamina. Innovation is a team sport and hence innovation stamina is more relevant for a team than an individual. However, let’s focus on an individual in this article.

1.  Curiosity stamina: This stamina depicts one’s ability to remain curious about one challenge area for a long duration.

Daily workout: Listening: Spending time listening to people who may be facing the challenge or have overcome the challenge or carry some expertise related to the challenge area. If you are curious about a technology trend, then the workout may involve listening to / studying what experts/friends have to say on the topic.

Listening may also happen by watching a video, reading a book, research paper, etc. Any serious study would need the discipline of taking notes, keeping recorded interviews, etc.

A typical by-product of this exercise is framing one or more challenges with additional constraints e.g. focusing on specific types of people, using different metaphors or analogies, etc. With input from people, the challenge statement may undergo changes. Keeping a diary of challenge statements along with assumptions and constraints helps.

2.  Experimentation stamina: This stamina represents one’s ability to perform experiments to validate one or more assumptions or hypotheses associated with an idea. 

Daily workout: Prototyping: A prototype can be feels-like such as a before-and-after storyboard, or it may be a looks-like prototype such as app wireframes or it may be works-like such as a simulation model. Building higher fidelity prototypes typically needs more sophisticated tools, specialized skills, and more effort. The key parameters to watch out for are cost and speed of prototyping. You want the cost to be as low as possible and the speed to be as high as possible.

Like how a gym enables workouts, a lab enables prototyping by providing access to tools, platforms, and coaches. Hence, serious stamina builders try to get access to a gym or build a low-cost gym of their own.

3.  Communication stamina: This stamina depicts one’s ability to communicate one’s idea effectively in a short time again and again despite unfavorable responses in the past.

Daily workout: idea pitching: Idea pitching can start with friends and family. And it gets extended to mentors, investors, potential/current customers, partners, etc. A key by-product is a feedback which may be used to improvise the idea, the prototype, and the pitch. Investment is also a by-product, not necessarily in the form of money but it could also be in the form of time from a mentor or an influencer opening a channel to potential customers. 

4.  Collaboration stamina: This stamina represents one’s ability to collaborate with and co-create new products/services with colleagues despite differences in opinions or priorities.

Daily workout:  Brainstorming: It is common to meet over a cup of coffee but not so common to meet with a specific challenge as agenda to be discussed. And it is even more difficult to retain an interest in the challenge for all the parties involved. Collaboration stamina is the toughest and trickiest stamina to build. Who is contributing more? Who should get the credit? Questions like these would pop up sooner or later and need to be resolved amicably.

A typical by-product of collaboration is a joint project. Many challenge campaigns make it mandatory for the submission to be teamwork. Quality of listening and mutual respect play a big role in cultivating collaboration stamina.

To summarize, we looked at 4 components of innovation stamina: curiosity, experimentation, communication, and collaboration, and 4 associated basic workouts to cultivate those components viz. listening, prototyping, idea pitching, and brainstorming.