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Start-up Zaplet, Inc., has radical software, prestigious venture capital funding, and a multitude of business opportunities. New CEO Alan Baratz must select a strategy and redesign the organization to deliver. This case describes the roles and philosophies of the founders and the Kleiner, Perkins venture capitalist in building the company, the creation of the options for various business applications, and the process of selecting a business focus. Issues include the role of experimentation in selecting a market for new technology, the influence of venture capital, the importance of recruiting key employees, transitions for founders, and matching organizational form to strategy. The key decision is how to further focus the company.

Scott Rozic, CEO of start-up Verge Software, has just told his board that he is taking the company in a totally new direction, moving from enterprise knowledge management software to Internet direct marketing. This case covers the start-up of the business, and Rozic's mentoring by a key angel investor. It leaves open the question of whether this decision is wise or whether Rozic should go back to the enterprise business, now that venture capital funding preferences have shifted once again.

Before the days of the Internet, it was primarily venture capitalists who coached young entrepreneurs in Silicon Valley. Today, because of the phenomenal number of new companies, venture capitalists are just too busy. To fill the void, a new breed of adviser has stepped in to coach entrepreneurs. Called mentor capitalists, they help entrepreneurs with everything from recruiting top talent to attracting their first million in seed money. The mentor capitalists in Silicon Valley are cashed-out, highly successful business architects who no longer want to start businesses but who love the thrill of the entrepreneurial game. They spend hours and hours with first-time entrepreneurs, guiding them as they create and refine a business model, test their ideas in the marketplace, build business processes, raise money, and find talent. Mentor capitalists seed Silicon Valley with expertise and knowledge, augmenting or even substituting for classes in entrepreneurship at local universities. But, as the authors note, the role of the mentor capitalist is essential to any start-up, anywhere.

Supplements the (A) and (B) cases.

Almost all companies today compete to some degree on the basis of continuous innovation. And many turn to customers for information to guide that innovation. The problem is that customers' ability to guide new product and service development is limited by their experience and by their ability to imagine and describe possible innovations. How can companies identify needs that customers themselves may not recognize? A set of techniques Harvard Business School Professors Dorothy Leonard and Jeffrey Rayport call empathic design can help resolve those dilemmas. Its basic principle is observation--watching customers use products or services. But the critical twist is that such observation is conducted in the customer's own environment--in the context of normal, everyday routines. In such a context, the company is privy to a host of information that is not accessible through other observation--oriented research methods such as focus groups or usability laboratories. This article explores a new way for companies to spark innovation--a new way for them to identify consumer needs, and thus design successful new products to meet those needs. The techniques of empathic design--effectively gathering, analyzing, and applying information gleaned from observation-are familiar to top engineering/design firms and a few forward-thinking manufacturers, but are not common practice.

Innovate or fall behind: The competitive imperative for virtually all businesses today is that simple. Responding to that command is difficult, however, because innovation takes place when different ideas, perceptions, and ways of processing and judging information collide. And it often requires collaboration among players who see the world differently. As a result, the conflict that should take place constructively among ideas all too often ends up taking place unproductively among people. Disputes become personal, and the creative process breaks down. The manager successful at fostering innovation figures out how to get different approaches to grate against one another in a productive process the authors call creative abrasion. Managers who want to encourage innovation need to examine what they do to promote or inhibit creative abrasion.

Supplements the (A) case.

Supplements the (A) case.

Supplements the (A) case.

In late 1994, James Down, member of Mercer's Executive Committee, has to decide whether or not he should push ahead with the writing and publication of a book on growth--at a time when the more successful business publications focus on reengineering and cost cutting. He sees this as an opportunity to position Mercer in the consulting market and align the organization--itself a result of several mergers--around a common platform. He is facing resistance within the firm, however, especially from the firm's European offices, which see little need for this knowledge product. Proceeding without Europe could result in an incomplete product and a divided firm. If he waits, though, he may miss a critical market window. The case provides early versions of the growth framework. The product in this case is built from the firm's knowledge assets, and is very different from manufactured hardware or software.

To be a leader in global manufacturing in the 1990s, a company must excel in two seemingly contradictory ways. First, it must constantly build and refresh its individual areas of expertise so that it has the critical capabilities needed to stay ahead. And second, it must get its ever-changing mix of disciplines to work together in an ever-changing competitive environment. Most manufacturers, especially those companies that have reorganized themselves by cross-functional processes, have already discovered how difficult it is to integrate various disciplines and still maintain functional excellence. But development projects offer a solution. Development projects are the critical juncture where functional groups meet and are therefore the true test of an organization's integrative abilities. More important, they can be used as a tool for strengthening the relationship among functions, while still giving those functions the room they need to advance their own expertise. The Kodak FunSaver project illustrates how a company can encourage functions to work together effectively, enhance functional expertise, and create a winning product to boot.

The transformation of technology into commercially successful products is a process fraught with risk and uncertainty, and increasing pressure on time to market is exacerbating the difficulties. This note first describes a study conducted by Hewlett-Packard to improve its product development process as an illustration of the increasing focus companies are placing on understanding user needs. A framework of different technology commercialization situations is proposed and the concept of empathic design introduced as a potent mechanism for anticipating user needs, especially under conditions of moderate technical and market uncertainty. Researchers often find traditional market research techniques incompatible with creatively understanding user needs. That is, in many situations, customers cannot ask for a new product (or even a new feature) because they do not know what is possible, technologically.

In the over 20 years since Hewlett-Packard (HP) set up a manufacturing site in Singapore to produce calculators, HP has invested managerial talent and resources in developing its licensor into a technology development partner. The case details the growth of high-volume manufacturing capabilities and the setting up of an R&D facility. Various projects are described in which Singapore contributed an increasing amount of skill, leading up to an abortive attempt to completely co-develop a new printer. Singapore now feels ready to develop a printer on its own for the Japanese market, and the case poses the question of whether or not it is ready to do so. There is also an issue of whether the developers understand the Japanese market well enough to proceed.

Discusses the printer Hewlett-Packard has developed.

Discusses the printer Hewlett-Packard has developed.

Monsanto has yet to receive FDA approval for BST, a growth hormone for cows. Anti-BST groups have successfully lobbied Wisconsin and Minnesota, major milk producing states, to ban milk from BST-injected cows; the FDA has charged Monsanto with improperly promoting BST before receiving approval and eventual consumer acceptance of BST generated produce is uncertain.

One of the nation's foremost mini-mills' core competence is the rapid realization of technology into products. This case describes the development of a highly innovative casting technique and features the role of the company's culture in achieving its goals. The company exemplifies a learning organization.

Very early in the history of biotechnology (about 1979), Monsanto made a major commitment to move into this field. This case recounts the history from the point of view of the eminent scientist hired to head up corporate R&D. He took Monsanto from a very traditional agricultural chemicals technology base to one of the world's finest biotechnology centers and oversaw the purchase of Searle Pharmaceuticals. Raises a number of issues: How can a company move into a totally new technology? What are the advantages and disadvantages of sourcing technology from small firms and universities? How should research be organized? Emphasizes the very long-term view that Monsanto took in justifying their huge investment.

Kodak must decide whether to make a major investment in a production facility designed around a new technique for producing the gelatin critical to so many film and paper products. Currently, gelatin making is an arcane art, unchanged in 150 years and heavily dependent upon the sensory skills of experienced foremen. The new process, in a pilot stage now, is a chemical reaction which reduces the process time for one step from 6 months to 48 hours and which is much more "scientific." However, the old plant is fully paid for, the new process is only one potential avenue for improvement, and demand for gelatin is falling.

When introducing a new technology to their company, implementation managers must bridge the gap between the designers and the users of the innovation, and make the transition as smooth as possible. This task is especially difficult when they are met with employee ambivalence and resistance. Moreover, those employees who enthusiastically accept the innovation may not be regarded as leaders in the company. Implementation managers, then, must learn to see themselves as internal marketers, guiding the innovation from the laboratory to the workplace and meeting both developer and user needs, while preparing the organization to receive the technology.