Transformation of Technology to a Core Competency June

Transformation of Technology to a Core Competency June 2010 Gigi Johnson Executive Director, Maremel Institute June 2010

Question at hand: Technology Becoming Core Competency • “inventing new markets…” • “create an organization capable of infusing products with irresistible functionality… • “spawn unanticipated products…” Core Competency: Pralalad & Hammel, 1990 Core Rigidities: Leonard-Barton, 1995 June 2010

When You See a Wall of Water Coming, When Do You Do What? June 2010 3

• • • Proactive vs. passive on innovation Integration Differentiation Core Issues June 2010 4

Media: Past Visions of Technology Innovation • Warner Bros. -- early film sound - bet the company on a technology change • CBS early innovator in Color -- bet different than the industry; early CGI in-house, low cost • Turner – satellite to get content out to cable headends and create a national platform June 2010

Drivers: Powerful End-User Computing Deregulaton Low-cost distance connections Cartoon, Gordon Moore article Electronics, Volume 38, Number 8, April 19, 1965. June 2010

New Companies as Filters Media Object Filter • Risk: Distribution, Discovery, Adoption • Packaging of Time and Place • Assumptions of Context • Assumptions of Risk for Creation • Advantage: Inputs, Brand, Relationships June 2010 Distribution • Risk: Trust, Comparative • Risk: lack of flow Value • Advantage: • Explicit or Network on each implicit end • Temporal, • Advantage: geographic, by quality, technology, or by perceived cost advantage quality or Significant Change branding Factors Interface • Risk: Lack of adoption; vary • User Interface • Cultural context • Similarities to other UIs • Universal design or specialized • Trained usage patterns – experiential “sale” Direct Connection/Conversation with Consumer a la Cluetrain Manifesto? ?

Time/Space -- New Connections • Change in perspective from Single delivery dates and street dates to multiple modalities across wide varieties of platforms -- and back again • Changing nature of relationship with the consumer? Giving away or keeping the filtering role? June 2010 8

Result -- new aggregation, new middlemen, new tools • Netflix - 17 formats to distribute digitally • Mobile -- hundreds of combinations -- 2300 handsets to port to • Album distribution – hundreds of SKUs and digital distribution platforms, with return data paths June 2010

Common Change Scenarios • • Committees & Pilot Projects Digital executives + old job titles Eventual merging into “norms” Digital mavens move to next digital space • Tinker: in or out Trial - Pilots June 2010 Grow • Outsource to zero risk partners • Bring it inside; normalize Build Competencies 10

Resources and Competencies for the Future? Competencies to acquire? Resources to deploy? Stories to tell? Current Processes STEP Analysis of what is Known “Known” Possible Futures? External Unknowns: Discontinuities Cross-Effects Regulatory Surprises “Inventions” June 2010 Page 11

Strategic Choices: Techn. Determinism or Crafting the Show • Knowledge- or Resource-based view of the firm – a competency based view? • Stories of the firm in the future in terms of technology as a competitive advantage? A real technology story instead of "Content is King"? • Usual response -- let's create a committee sound, DCI, consortiums in digital video and audio June 2010

Different Visions: Netflix vs. Blu. Ray vs. Red Box vs. RED • Internal vs external changes • UMG -- Vevo, distributed new technology to create a new platform June 2010

Core Infrastructure Buy, Build, Contract, or Partner? In-House or Outside? • Disney -- outsourced core tech backbone to IBM; now restructuring in-house with new CIO • Sony – driving company-wide metadata to the frame level • Changing work processes -- not just in production, but driving forces of information about information June 2010 14

Creative Tech. Toolboxes Integration of Creative and Technology • Production -- Creativity Design Tools • Competitive Advantage in cutting edge integration: Disney Animation -- software engineers working side by side with animators, assigned to film projects Cc 2. 0 flickr/Let Ideas Compete - Pa June 2010

KM, CRM, and DSS: Knowing more • CRM -- understanding the consumer through 2 -way data • Who owns that data and is CRM a core two-way competency to be acquired? • Changing nature of distribution deals – who owns the data, who needs the data? • Changing nature of Advertiser needs – data-driven future June 2010

Understanding the competencies of the future • • Mobility and just-in-time media Massive geography changes of int’l markets Massive changes in local distribution & content Role as technology innovator -- who has permission to have innovative ideas in the organization that aren't story ideas? • Hellström & Hellström, 2002 June 2010 Page 17

Your Story? June 2010 Page 18

Innovation as a Core Competency • Needed resources? – Own assets or resources – Partnerships – others’ assets & resources – Competencies (including change)? • Needed knowledge? – Awareness everything going on in related circles? • Needed vision, coherence, viewpoints? June 2010 Page 19 CC 2. 0 flickr/kevindoole

Telling Stories of Technology Changes • Existing Story Structures (How) – Find framing similar to current decision-making? Work with existing organization structures and measurements? – Or change the story structures (harder) • Existing Power Bases (To Whom) – Current Experts or “types” (product champion, Business Innovator, Tech Gatekeeper)? (Rothwell & Zegveld 1985) • Import Story Experts – Nurture experts or export decisions and information to experts (e. g. Consultants)? • Construct scenarios for discussion? CC 2. 0 flickr/xmatt June 2010 Page 20

June 2010 CORE RIGIDITIES…BUT SPEEDING UP? ? Cc-2. 0 Mr. Thomas/flickr

Gigi Johnson gigi@maremel. com 626 -603 -2420 Twitter: @maremel Skype: maremel 5 June 2010 Page 22