Strategy formation and business creation are rare and idiosyncratic events, characterized by high degrees of newness, resulting in inherent uncertainty and ambiguity which makes any attempt of interpretation and legitimation an ambitious project. The sixth RISE Workshop focused on the issue of uncertainty by elaborating its manifestations in two different contexts: First, it considered the problem of new business creation with an contribution of Ergon’s Teddy Graf talking about the building of a new business model; second, Daniel Bartl of RISE referred to Roche’s legitimation and rationalization practices in the context of its “innovation of the innovation model”. A central premise that derived from this discussion is that uncertainty and ambiguity is not only a factor to be reduced in processes of strategy formation and business creation but that they are enablers of innovative action at the same time.

Software factories: a feasible approach? (Teddy Graf, Chairman of the board, Ergon Informatik AG)
Teddy Graf, Chairman of the board of Ergon Informatik AG introduced the concept of the JET software factory with which his company develops software applications. The software factory automates the development of business applications consisting of a platform on which solutions are build and specialized languages for the modelling of the solution. Success demands a deep understanding of both, technical skills and the business model and processes of the customer.

Teddy Graf suggested that the development in the industry will have to change from a technological orientation to a business orientation. Neither standardized products nor offshore software develop-ment are solutions to this problem. Hence, it will not be sufficient to provide separated bundles of standard software but an integration of different software modules which is possible with the concept of the software factory. The goal has to be the fulfilling of the customer needs of an integrated solution and not to deliver software packages which have to be adapted through intense and expensive con-sulting projects. The advantage of the software factory model lies especially in the high efficiency with which integrated software solutions can be developed. Of high importance is also the efficiency with which the software can be adapted and changed after implementation, lowering costs dramatically. Important characteristics with which the result is evaluated by the customers are increasingly quality, accuracy and value added.

The discussion revealed that the concept of software factory not only helps to improve the cost, quality, and efficiency of software development and integration, but that the concept must also be understood as a frame of reference that helps software projects (and the organizsation overall) to structure a highly uncertain and ambiguous process.

Management practice/s under uncertainty: creating continuity in a discontinous environment (Daniel Bartl, RISE Management Research)
Building on intense fieldwork with F. Hofmann-La Roche and in particular on selected artefacts like investor presentations and statements of organizational members, Daniel Bartl’s talk was led by the question why and how high-tech firms, in particular R&D organizations can form coherent and con-tinuous strategies in the context of technological innovation, which is characterized by inherent uncer-tainties and discontinuities. As an empirical example, managerial and research practice at Roche was described as ambiguous, hypothetical, controversial and often contested. Nevertheless, the Roche model appeared to have been logically emerging over time.

The research revealed that the references built into the model are not specified in detail but provide an interpretative flexibility that enables different and diverse internal and external communities to apply and enact these references through creative managerial practices and to replicate them with discipline across events over time and space. Through those practices (historical) continuity can be demonstrated in an persistently changing, i.e. discontinuous environment. Findings point to the central role of man-agers’ interpretative practices for establishing stable references/patterns which normalize perceived discontinuities, and thereby generate a coherent, continuous, and thus credible strategy

Resources
Workshop program
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Literature
Software factories: a feasible approach?
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Orlikowski, W. (2000). Using Technology and Constituting Structures: A Practice Lens for Studying Technology in Organizations, Organization Science, 11(4): 404-428.

Management practice/s under uncertainty: creating continuity in a discontinous environment
Suchman, L. (2000). Problematizing ‘Innovation’ as a Critical Project, Technology Analysis & Strategic Management, 12(3): 327-333.
Suchman, M. (1995). Managing Legitimacy: Strategic and Institutional Approaches, Academy of Man-agement Review, 20(3): 571-610.
Wilson, D., P. Jarzabkowski. (2004). Thinking and acting strategically: New challenges for interrogat-ing strategy, European Management Review 1: 14–20.