Nathan R. Furr

CROSSROADS---Microfoundations of Performance: Balancing Efficiency and Flexibility in Dynamic Environments

Our purpose is to clarify the microfoundations of performance in dynamic environments. A key premise is that the microfoundational link from organization, strategy, and dynamic capabilities to performance centers on how leaders manage the fundamental tension between efficiency and flexibility. We develop several insights. First, regarding structure, we highlight that organizations often drift toward efficiency, and so balancing efficiency and flexibility comes, counterintuitively, through unbalancing to favor flexibility. Second, we argue that environmental dynamism, rather than being simply stable or dynamic, is a multidimensional construct with dimensions that uniquely influence the importance and ease of balancing efficiency and flexibility. Third, we outline how executives balance efficiency and flexibility through cognitively sophisticated, single solutions rather than by simply holding contradictions. Overall, we go beyond the caricature of new organizational forms as obsessed with fluidity and the simplistic view of routines as the microfoundation of performance. Rather, we contribute a more accurate view of how leaders effectively balance between efficiency and flexibility by emphasizing heuristics-based “strategies of simple rules,” multiple environmental realities, and higher-order “expert” cognition. Together, these insights seek to add needed precision to the microfoundations of performance in dynamic environments.

Intergenerational Hybrids: Spillbacks, Spillforwards, and Adapting to Technology Discontinuities

During technological discontinuities, incumbents frequently develop hybrids of competing technical generations. Although some prior work implies that such intergenerational hybrids may be the result of organizational dysfunction, we propose that in some cases hybrids may be sophisticated learning tools that shape organizational adaptation to a technological discontinuity. In this paper, we suggest two mechanisms through which intergenerational hybrids may affect organizational adaptation: spillbacks and spillforwards. In an empirical test among the population of automobile carburetor manufacturers during a technological discontinuity, we observe that organizations developing intergenerational hybrids capture spillback benefits-knowledge spillovers from an emerging technology generation to the current generation. Furthermore, we find that these same organizations also capture spillforwards-spillover benefits from developing higher-performing intergenerational hybrids that improve their product performance in the future technology generation. These results suggest that intergenerational hybrids may be stepping-stones for organizations to learn about and adapt to technology discontinuities.

The Science of Social Impact Innovation: How to Deliver More Impact through Innovative Business Models

Rather than spend an inordinate amount of time and resources on planning what is inherently unknown and uncertain, socially-focused organizations like Panera Cares, Banco Davivienda, and Brigham Young Universitys (BYU) Design Exploration lab quickly map out their assumptions, run experiments to test those assumptions, and adjust their plans based on their learnings. In this article, we explain and expand on how organizations of all kinds (whether they be large corporations, social ventures, or government agencies) have bought into the idea of using innovation and experimentation for impact; and how despite recent advancements of design thinking on the social impact front, the actual implementation of innovative ideas remains elusive for many organizations. The article further presents a more systemic model for social impact innovation: social impact models, which provide one possible solution by enabling social ventures to achieve a more robust validation of their new- and not-so-new-to-the-world ideas b...

Leading your team into the unknown

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