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Summary Podcasts Innovation Strategies of Firms and Entrepreneurs
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Summary: Innovation Strategies of Firms and Entrepreneurs PodcastsPodcast 1
Try To Know Our Names
Innovations are unique new ideas that are implemented
- The process of developing innovations from concept to implementation follows
similar pattern
- This pattern follows a nonlinear cycle consisting of:
o Divergent and convergent activities
o These activities may repeat in unpredictable ways over time
There is said that managers can control the innovation process, and that they are
responsible innovation success
- In fact: they cannot control the innovation process
- Managers are responsible for increasing their odds of success by developing and
practicing skills in learning, leading, relating, and cycling through the innovation
journey
The ‘Innovation Journey’
1. Beginning convergent
- A set of seemingly random coincidental events occur that set the stage for diverging
into a new innovative direction
o This can lead to a ‘shock’ obtaining funding, proposal etc.
2. Proliferation divergent
- Exploring new directions
- Changing goals
- Learning by discovery
- Pluralistic leadership
- Building new relationships
- Problems, mistake and resource constraints arise
Divergent pathways
- Lead innovators into a convergent cycle of exploiting a given direction
o Learning by testing, executing relationships with unitary leaderships, goal
consensus
- This cycle of convergent behavioral may diverge again with further exploration of a
chosen direction and if additional resources permit
- Spreading risks not focusing on one thing
- Convergent behavior may diverge again further exploration of chosen direction
and if additional resources permit
The ‘Innovation Journey’ ends:
- Convergent pattern innovation implementation
- Divergent pattern behavior is terminated when resources run out; political
opposition prevails to terminate the developmental effort
,Complex innovations = reconceptualize the process of innovation
- Cannot be reduced to a simple process/sequence/stage
The ‘Innovation Journey’ consist of a nonlinear cycle of divergent and convergent activities
that may repeat in unpredictable ways over time
- The dimensionality or complexity of this nonlinear cycle of divergent and convergent
behavior dampens the innovations that ultimately get implemented
The ‘Innovation Journey’ stages:
1. Beginning random
2. Transition chaotic
3. End orderly pattern of behavior
This implies that entrepreneurs and managers cannot control innovation success, only its
odds by developing and practicing skills for traversing the obstacles encountered in the
divergent and convergent cycles
- The journey is like an uncharted river some people do not take the risk and some
people let them flow by the river they go where the course looks best
maneuver the river by learning and practicing
The ‘Innovation Journey’ entails maneuvering many obstacles through stretches of divergent
and convergent waters
- Divergent waters river branches and expands in multiple dimensions and flows in
chaotic or random patterns
o Obstacles: encountered while maneuvering these stretches include divergent
searching and decision-making, learning by discovery, leading pluralistically,
running in packs with others to create new relationships and institutions for
collective survival
- River converges particular direction orderly periodic pattern
o Management skills and practices are useful for maneuvering and exploiting
these stretches implementing strategic goals, trial-and-error learning,
unitary leadership, executing agreements within established institutions for
competitive advantages
The journey
- Divergent
o Branches and expand multiple dimensions
o Chaotic, random patterns
- Convergent
o Learning by testing
o Particular direction
o Orderly periodic pattern
Variance theory approach
- Overlooks the obstacles encountered and skills required for maneuvering processes
of innovation development and implementation
,Maneuvering transitions between divergent and convergent flows problematic
1. Convergent flow may transition again in divergent flow
2. The paths are unpredictable and beyond the control of these ‘floating down the
uncharted river’
Innovative leaders
- Intervene and place boundaries
o Divergent and convergent patterns resource investment, organizational
structuring, selecting participants
Repeated trials are essential for learning to occur and applying these learning experiences to
subsequent innovations
- Organization can build its repertoire of competencies increase odds of success
- Practical implication develops ways to let managers practice
Beginner slopes
- Small and inexpensive
On the Alps
- Major and expensive
,Podcast 2
You Can’t Always Get What You Want
Start-ups = young innovative enterprises
- Often seen to contribute to economic growth and to help solve societal challenges
- Also known as new technological-based firms
- Not all start-ups are innovative!
Entrepreneurs
- Are behind a start-up
- A team of entrepreneurs form a start-up
Incubators = programs and organizations that primarily support new technology-based start-
ups
- Institutionalized component of worldwide policies
- Aim = stimulate entrepreneurship, innovation and economic growth
- Supported by local or national government
- Provide start-ups with broad range of services and resources
o Physical infrastructure, business services, technological services and
knowledge, support network
- Complement the resource base of start-ups
- Effective instruments to support start-ups
Incubators help start-ups to create higher chances of survival and growth, but empirical
work shows they do not help in promoting the success of start-ups
- Start-ups do not fully take advantage of the incubator’s resources
Entrepreneur’s and incubator’s staff have different perceptions about the importance of the
incubator’s resources
- For example: incubator’s staff feels like training, coaching and networking are great
importance to incubated start-ups, but entrepreneurs disagree
Reason for different perception:
- Entrepreneurs may not make use of the incubator’s resources when these are of
insufficient quality
- Incubators do not sufficiently take the needs of the incubated start-up into account
mismatch
- Incubator’s services are too rigid not tailored to the specific needs of start-ups
- Incubator’s resources are superfluous supporting mature start-ups that already
have a solid resource base
Incubated entrepreneurs
- Have a technological background
- Have little entrepreneur experience
- Do not recognize gaps in their resource base
- Are often unable to recognize the value of the incubator’s resources
, If the incubator’s resources are of insufficient quality or not in line with needs of
entrepreneurs/start-up…
- Incubator should focus on developing their resources and listen more carefully to the
needs of entrepreneurs
If entrepreneurs are insufficiently aware of the needs of their start-up…
- Providing resources on request of entrepreneurs is not sufficient for incubators
- Incubators should actively identify the needs of start-up and stimulate entrepreneurs
to make use of resources that fit these needs
Differences in perceptions affects the incubator’s assertiveness
- This is the extent to which incubators see themselves as managers of the incubation
process or as external facilitators of a process primarily managed by the incubators
themselves
RBV = resource-based view
- RBV is used to identify and categorize both the resources that start-ups need to
survive as well as the resources that incubators may provide
- Indicates what makes firms successful based on resources
- Outlines the perceptions of entrepreneurs and incubator managers regarding the
importance of the incubator’s resources
According to the RBV firm can be seen as a bundle of tangible and intangible resources
- Resources = stock of available factors that are owned or controlled by the firm
o Competitive advantage if the resource is valuable, rare, inimitable and non-
substitutable (VRIN)
Start-up firms have incomplete resources and are still developing
- Liabilities of newness
o Incubators are seen as addressing these liabilities of newness by providing a
resource-rich environment that enables start-ups to complement their
resource base
- Incubators can provide resources directly or enable start-ups to access resources
externally through the incubator’s network
Tangible resources
- Physical capital
o Physical technology in firms: plant and equipment, location, access to raw
materials
o Difficult to find, because they are expensive to acquire on the small scale
needed by start-ups
o Incubators can provide shared office/facilities such as equipment, meeting
room, reception etc.
- Financial capital
o All of the different monetary resources available for the discovery and
exploitation of the venture idea
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