Cross-Domain Alignment

The SAM uses the concept of alignment perspectives to describe multiple cross-domain alignments. The same approach can be applied in iSAM. Companies with different overall philosophies, strategies and goals and that are appropriately aligned, will adopt a specific alignment perspective, which best fits its specific strategy. The alignment perspectives describe the way in which a company adapts to changes in its internal and external environments in order to regain alignment after such a change. The main alignment perspective provides a guide and represents the general approach a company should follow to achieve re-alignment after change. The other alignment perspectives may also be relevant under certain circumstances, but the main alignment perspective of a company should always be the most dominant. Three alignment perspectives have been defined for iSAM:

1. Business Strategy Perspective

2. Innovation Transformation Perspective 3. Innovation Potential Perspective

Each perspective has one dominant domain, which is the driving force and usually the initiator of change. This domain often has the strongest representation at executive level in the company. It is often referred to as the anchor domain. Coleman et al. consider the anchor domain to be the quadrant that is the strongest area of the business. It directs the change that the business is to undergo [19] [76]. There seems to be some disagreement between Luftman et al. [76] and Henderson and Venkatraman [162] regarding the description of the remaining two domains and their relationships to the anchor domain as far as IT alignment is concerned. In the context of innovation alignment, the impacted domain is the domain, which is directly impacted by changes in the anchor domain. It is the

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domain, which follows straight after the anchor domain in the alignment perspective - either horizontally or vertically. The implication domain is implicated in the change to the anchor domain by the subsequent change to the impacted domain.

4.3.3.1 Business Strategy Perspective

The business strategy perspective is presented in Figure 15. In this perspective the business strategy is the main driver or anchor domain. The innovation infrastructure and processes is the implicated domain and needs to fit with the current organisational infrastructure and processes, which is the impacted domain, designed to support the business strategy. The innovation infrastructure and processes are constrained by the organisational design. There is likely no explicit innovation strategy to guide the design or operations of the innovation infrastructure and processes.

Figure 15: Business Strategy Perspective

In this perspective there are unlikely to be people or other resources dedicated directly to innovation. Therefore, from an external innovation domain perspective, the scope of innovation would be limited (focusing on incremental improvements), the innovation governance activities would be minor and the innovation capability level of the company would be low, without much on-going effort to improve it. From an internal innovation domain perspective the innovation model would not rely heavily on an innovation team. The innovation leadership would come from already established management teams or individuals.

The type of company that would best fit the Business Strategy Perspective is that with a strong operational focus that has to perform the same activities over and over again. These companies gain a competitive advantage through operational efficiencies and have significant capital invested in operational infrastructure.

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4.3.3.2 Innovation Transformation Perspective

The innovation transformation perspective places the innovation strategy (impacted domain) and innovation infrastructure and processes (implicated domain) at the centre of implementing the chosen business strategy, which is the anchor domain (Figure 16).

Figure 16: Innovation Transformation Perspective

In this perspective, a company has made a decision that the innovation activities should not be constrained by the current business infrastructure and processes. Instead, the innovation strategy, made up of the scope, governance and innovation capability, should be aligned with the overall business strategy. The correct innovation infrastructure, including: model, processes and skills, should then be designed and implemented in order to support the implementation of the innovation strategy. As an example, a company with a first-to-market generic strategic perspective (business strategy) should have an innovation strategy, which focusses on radical and disruptive innovation (scope), which in turn would require a mature innovation capability and governance structures. To successfully implement this innovation strategy, it would need to select an innovation model geared for this level of innovation and will need to support this model through appropriate innovation processes, systems and skills. The type of company that would best fit the Innovation Transformation Perspective is that which gain a competitive advantage through its ability to adapt and change to shifts in the external environment. Innovation is not at the core of these companies, but they have the capability to innovate in order to implement successful change and significantly improve their core business. 4.3.3.3 Innovation Potential Perspective

In the innovation potential perspective, a company designs a new business strategy (impacted domain) on the potential competitive advantage its innovation strategy (anchor domain) could provide. The business infrastructure and processes (implicated domain) are then designed to implement the new business strategy (Figure 17).

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Figure 17: Innovation Potential Perspective

In this perspective a company realises that the broad scope of innovations it is able to deliver together with its significant innovation capability and innovation governance structures, places it in a position to make changes to its business strategy so that it can better exploit its innovation capability. If this new business strategy is supported by a changed and aligned business infrastructure and processes then a significant competitive advantage may be gained. This approach requires strong innovation leadership and will more than likely be driven by the CEO or senior management team and employ a “visionary leader” innovation model. The type of company that would best fit the Innovation Potential Perspective is that whose business is innovation. These companies are found in fast changing industries with high levels of uncertainty about the future and where innovation has the capability to disrupt the entire structure and pecking order. Innovation is not being applied in order to improve other core competencies such as low cost or improved quality, innovation is the core competency and these companies gain a competitive advantage from being able to innovate better and faster than their competitors.