ENTREPRENEURIAL MANAGEMENT

Welcome to MGT 246 Entrepreneurial

Management

Session 1

Professor Haibo LIU 1

About the Course

 Zoom

 Syllabus  Questions?

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About Zoom

 Switch on your camera (facilitate discussion and keep you focused)

 Display name: first name, last name

 Please note that Zoom automatically logs your attendance (duration you are online). Please make sure your display name is consistent with your registered name (otherwise I cannot tell it is you).

 How:

 Click on the “Participants” button at the top of the Zoom window

 Next, hover your mouse over your name in the “Participants” list on the right side of the Zoom window

 Click on “Rename”

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Ice breaker

 Your name

 Where are you from?  Where have you travelled to would like to go

recently? Why did you (not) like it?

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Syllabus

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Individual Creativity Challenge

 How creative are you?

 Prepare a piece of paper and a pen.  You have 60 seconds to complete the following

task.

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Individual Creativity Challenge

 Think of different ways you can use a paper clip

 List as many as possible

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Creative Destruction

 A process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one

 By Joseph Schumpeter in "Capitalism, Socialism and Democracy" in 1942

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Innovation Matters

 Innovation is the motor of the modern economy, turning ideas and knowledge into products and services

 According to Statistics Canada, the following factors characterize successful small and medium-sized enterprises SMEs:  Innovation is consistently found to be the most important

characteristic associated with success.

 Innovative enterprises typically achieve stronger growth or are more successful than those that do not innovate.

 Enterprises that gain market share and increasing profitability are those that are innovative. 9

Innovation Matters

 The consultancy Arthur D. Little conducts a regular survey of senior executives around the world exploring innovation. In its 2012 survey of 650 organizations, the following emerged:

 Top quartile innovation performers obtain on average 13% more profit from new products and services than average performers do, and 30% shorter time-to-break-even.

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GLOBAL INNOVATION INDEX

 Countries that are entrepreneurial and innovative

 https://www.wipo.int/global_innovation_index/en/

 Author(s): Cornell University, INSEAD, WIPO

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Companies that are most entrepreneurial and innovative

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Source: BCG

The World's Most Innovative Companies of 2020 – Fast Company

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https://www.fastcompany.com/most-innovative- companies/2020

Innovation

 What is innovation?

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Innovation

 The word ‘innovation’ comes from the Latin, innovare, and is all about change.

 Innovation is ‘the process of creating value from ideas’. o It is a process o Creating value: economic or social value o Idea: new and useful

 Innovation is all around us https://www.ces.tech/

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Entrepreneurship

It is a process where a solo start-up venture or a key group within an established organization trying to build/renew its products or services.

It is the powerful mixture of energy, vision, passion, commitment, judgement and risk taking which provides the motive power behind the innovation process.

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Innovation & Entrepreneurship

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Innovation is the specific tools of entrepreneurs, the means by which they exploit change as an opportunity for a different product or service.

It is capable of being presented as a discipline, capable of being learned, capable of being practiced.

Innovation & Entrepreneurship

 Explore the role of entrepreneurs as the agents of innovation – ‘innovation is what entrepreneurs do’. o The lone genius who battles single-handedly to bring

his/her idea to fruition (James Dyson) o The start-up team whose creative interchange helps

shape something new (Larry Page and Sergei Brin of Google, Bill Gates and Paul Allen at Microsoft)

o Social entrepreneurs (Mohammed Yunus, Nobel prizewinning founder of Grameen bank)

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Types of Entrepreneurs

 Self-employed, small business entrepreneur o Eg. Owner of a pet grooming shop

 Social entrepreneur o Eg. The Grameen Bank, a Nobel Peace Prize-winning microfinance

organization and community development bank founded in Bangladesh by Muhammad Yunus

o Is social innovation only about making changes in underdeveloped or developing world?

 Technical entrepreneur o Eg. Elon Musk, James Dyson, Caterina Fake, etc.

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Innovation isn't easy

 Barriers to innovation include: o Not recognizing the need for change;

o Complacency – core competence becomes core rigidity;

o Closed information network, insulated from new ideas.

 Most innovation efforts fail!

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10 Minutes break!

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Successful Entrepreneurs...

 Explore and understand different dimensions of innovation (ways in which we can change things)

 Manage innovation as a process  Create conditions to enable them to repeat the innovation trick

(building capability)  Focus this capability to move their organizations forward

(innovation strategy)  Build dynamic capability (the ability to rest and adapt their

approaches in the face of a changing environment)  They see failures as learning, they are risk-taking rather

than risk averse.

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Collaboration in Innovation

 Many of the most successful innovations and new ventures were co-created.

 Collaboration: It is the interaction of talent that is at the core of radical innovation

©2015 John Wiley and

Sons Innovation & Entrepreneurship 3e by Bessant & Tidd

Collaboration in Innovation/Entrepreneurship

©2015 John Wiley and

Sons

Innovation isn't easy

 Barriers to innovation include:  Not recognizing the need for change;

o Complacency – core competence becomes core rigidity;

o Closed information network, insulated from new ideas.

 Most innovation efforts fail!

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Factors influencing new venture creation

©2015 John Wiley and

Sons

Can we manage innovation?

 Innovation as a series of experiments;

 Building ‘routines’ – behavior patterns which become embedded;

 Structures, policies, procedures for making innovation happen;

 Culture – ‘the way we do things around here’

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Dimensions of innovation – what can we change? Dimension Type of change

Product Changes in the things (products/services) which an organization offers

Process Changes in the ways in which these offerings are created and delivered

Position Changes in the context into which the products/services are introduced

Paradigm Changes in the underlying mental models which frame what the organization does 33

Dimensions of innovation – what can we change?  Incremental innovation: small improvements to existing

products/services/processes, or ‘do what we do but better’

 Radical innovation: significant different changes to products/services/processes, or ‘do something completely different (and better)’

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Dimension Incremental Radical Product Process Position Paradigm

Examples of the 4Ps model: Product

Innovation type

Incremental: do what we do but better

Radical: do something different (and better)

‘Product’

– what we offer the world

Newer Windows OS replacing previous versions – essentially improving on existing software idea

New to the world software – for example the first speech recognition program

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Examples of the 4Ps model: Process

‘Process’

- how we create and deliver that offering

Improved factory operations efficiency

Online shopping

Innovation type

Incremental: do what we do but better

Radical: do something different (and better)

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Examples of the 4Ps model: Position

‘Position’

– where we target that offering and the story we tell about it

Banking services targeted at key segments – students, retired people, etc.

Low cost airlines opening up air travel to those previously unable to afford it – create new market and also disrupt existing one

Innovation type

Incremental: do what we do but better

Radical: do something different (and better)

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Examples of the 4Ps model: Paradigm

‘Paradigm’

– how we frame what we do, eg. Business model

IBM from being a machine maker to a service and solution company – selling off its computer making and building up its consultancy and service side.

Amazon, Google, Skype (redefining industries like retailing, advertising, and telecoms through online models)

Innovation type

Incremental: do what we do but better

Radical: do something different (and better)

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Dimensions of innovation – what can we change?

 Ford Model T https://www.youtube.com/watch?v=S4KrIMZpwCY

https://www.history.com/topics/inventions/model-t

 While watching the video, think about the following questions: o What were the innovations at that moment?

o Were those changes incremental or radical? Why so? 39

Poll from Socrative

 Go to https://b.socrative.com/login/student/

 Room number: MGT246

 Name: (First name) space (Last name initial). For example: Haibo L.

 There is only one question

 Click “finish quiz” after you finish

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Ford Model-T’s Innovations

 Higher wage

 Three shifts of 8 hours

 Standardization

 Large-scale mass production using the assembly line

 Much more affordable price

 Changes the transportation scene

Note: In 1901 Ransom Olds designed and introduced the Curved Dash Oldsmobile. This was the first American motor vehicle produced on the first assembly line.

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Dimensions of innovation – what can we change?  Incremental innovation: small improvements to existing

products/services/processes, or ‘do what we do but better’

 Radical innovation: significant different changes to products/services/processes, or ‘do something completely different (and better)’

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Dimension Incremental Radical Product Process Position Paradigm

Exploring innovation space

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To dos

 Form team of up to four, email me by 09/27 • If you only have two or three people, you can email me your list

too. • If you have no preferences, I will assign you to a team (there is no

need to email me in this case). • I will combine teams in the end, so do expect new members.

 Individual reflection: • I1. By 09/29 (Business model)  Syllabus  session summary 

Session 2  Individual reflections • We will discuss it in the next class (participation!) • No submission required

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