Entrepreneurial management differs from corporate management in its strategic orientation, commitment of resources and organizational design (Hisrich and Peters 2010 Transplantations of Entrepreneurial DNA in large firms. Implantation of entrepreneurial DNA in large firms can be done through its entrepreneurial architecture. Burns (2012) Elements of Entrepreneurial Architecture The link Entrepreneurial Architecture Leadership Culture Structure Strategies Leadership Senge (1992) explained that leaders in entrepreneurial organizations have three primary tasks. It includes the following: Designing organizational architecture that promotes learning Make everyone in the organization believe in their vision Exploit and manage change Transformation leaders are proven to promote innovation in organizations
Leadership and Innovation
Innovation Type Leadership Skills Building new product and service design Internal marketing build a team of innovators and garner support Building new business models Pragmatic architect. Skillful in imagination, thorough in implementation New and improved customer solution Deep understanding of unmet customer needs, vision, charisma and sensitivity towards customer needs New and improved product, process or service offering
Build team, work at great speed because time to market is critical, strategic thinking, coordination and tough coaches Culture and Innovation Involvement Consistency Adaptability Longterm vision Mission
Market oriented Customer oriented Cost oriented Efficiency oriented Innovation oriented Innovation oriented culture Amabile (1999) and Woodman and Schoenfeldt (1990) studied the individual traits that support innovative culture and values. These dimensions were:
Risk Tolerance curiosity persistence, self-confidence intuition creativity and intellectual honesty energy, ability to deal with uncertainty
Structure and Innovation Flexible Less hierarchical Flat Team centered Power distance Informal networks Decentralized Empowerment Organizational Climate: Structure Loose structure Radical creativity Strategies and Innovation Differentiation Competencies Processes
Capabilities and competencies sometimes becomes core rigidities..
Innovation strategies: market intelligence, customers feedback and responsiveness
Strategies for stability or change.
Innovation Strategies In terms of strategic choices, entrepreneurial firms have strategic options available from the three main innovation strategies. These include:
First to the market Second to the market Late to the market
Opportunity cost versus risks. Entrepreneurial Intensity Morris and Kuratko (2002) attempted to measure innovation in large firms by developing the concept of entrepreneurial intensity
Entrepreneurial intensity can be measured through the size of breakthrough termed as entrepreneurial degree and number of small but continuous innovations termed as entrepreneurial frequency.
The former is defined by Conway (2009) as a major advance in a particular field leading to radical innovations and the later is explained by Clark (2004) as learning by doing and experience curve leading to incremental innovations. Entrepreneurial Intensity How they differ? Possible within existing culture, structure ,systems and competencies Minor changes to products and services Incremental Innovation Requires changes in structure, culture, systems, values and mind-sets New markets, new products, services, and solutions Radical innovation Innovation Types Transformational: Developing breakthroughs Adjacent: Expanding existing businesses Core: optimizing existing products and customers Human Resources and Entrepreneurial Intensity The organizations should facilitate both incremental and radical innovation
Employee attitude towards creativity and CPS in particular Employee behavior Group effects
Innovation Management Strategies: Build the climate for creativity and innovation KEYS (Amabile et al)
Creative climate questionnaire (Ekvall) Situational Outlook Questionnaire (Isaksen et al)
Models useful in highlighting important factors that influence creativity and innovation
...without creative ideas to feed the innovation pipeline so they may be promoted and developed, innovation is an engine without any fuel. (McLean 2005). Pressures: Challenging Work and Work Pressures
Task Employees Match Stretch and balance Information Information Freedom Promotes creativity Organizational Support Autonomy Sense of ownership Change goals frequently Prescribed paths Kills Creativity Kills Creativity Resources: Time Promotes creativity Organizational Support Exploration Incubation Fake deadlines Tight Deadlines Burnout Distrust Resources: Money Increasing the budget does not increase creativity Lower budget restricts creativity Threshold sufficiency Encouragement of Creativity: Work Group Organizational Support Excitement over team goals Value diversity: Different perspectives Procedures Willingness to help Promotes creativity Encouragement of Creativity: Supervisory Encouragement
Organizational Support Praise, recognition, appreciation Acceptance of new ideas No value for failure Critique or deferral Kills Creativity Promotes Creativity Kills Creativity Encouragement of Creativity: Organizational Encouragement
Organizational Support Values Rewards Procedures Systems Situational Outlook Questionnaire (Isaksen 2007) Challenge/Involvement Trust/Openness Idea time Idea support Playfulness and humour
Freedom Risk taking Debate Conflict
Innovation Management Strategies: Risk and Innovation Lussier Sonfield & Lussier (1997) have suggested that a more helpful way of entrepreneurial venture, strategically, is in terms of innovation (its ability to create a unique and different product) and risk (the probability of financial loss). This is termed as entrepreneurial strategic matrix. These involve:
High innovation low risk (I-r) High innovation high risk (I-R) Low innovation low risk (i-r) Low innovation high risk (i-R)
Your Organization What is the single most important factor supporting creativity and innovation in your current work environment? What is the single most important factor inhibiting creativity and innovation in your current work environment? What is the single most important suggestion for improving the climate for creativity and innovation in your daily work environment? Organizational climate for innovation at Google Google appears to have learned a few lessons from other innovative organizations, such as 3M. Technical employees are expected to spend 20% of their time on projects other than their core job, and similarly managers are required to spend 20% of their time on projects outside the core business, and 10% to completely new products and businesses. This effort is devoted to new, non-core business is not evenly allocated weekly or monthly but when possible or necessary. These are contractual obligations, reinforced by performance reviews and peer pressure, and integral to the 25 different measures of and targets for employees. Ideas progress through a formal qualification process which includes prototyping, pilots, and tests with actual users. The assessment of new ideas is highly data-driven and aggressively empirical, reflecting the IT basis of the firm and is based on rigorous experimentation with 300 employee user panels, segments of Googles132 million users and trusted third parties. The approach is essentially evolutionary in the sense that many ideas are encouraged, most fail but some are successful, depending on the market response. The generation and market testing of many alternatives and tolerance of failure are central to the process. In this way the company claims to generate around 100 new products each year, including hits such as Gmail, AdSense and Google News.
However, we need to be careful to untangle cause and effect, and determine how much of this is transferable to other companies and contexts. Googles success to date is predicated on dominating the global demand for search engine services through unprecedented investment in technology infrastructure estimated at over a million computers. Its business model is based upon ubiquity first, revenues later, and is still reliant on search-based advertising. The revenues generated in this way have it to hire the best and to provide the space and motivation to innovate. Despite this it is estimated to have only 120 or so product offerings, and the most recent blockbusters have all been acquisitions: YouTube for video content; DoubleClick for web advertising; and Keyhole for mapping (now Google Earth). In this it looks more like Microsoft than 3M. Source: Bala Iyer and Thomas H Davenport (2008) Reverse engineering Googles innovation machine. Harvard Business Review, April 58-68. Cited in Tidd and Bessant (2009) Reflections Questions for today?
Does too much education kill creativity ?
Does ideas of the past support creativity or it limits ones ability to break from the past and think differently?
Activity Think of creative problem solving in organizations How does it occur? How would you encourage creative problem solving in your organization? Activity How would you deal with it? What would you be doing? How would you behave? What company might you be working in?