Assignemt Innovation & Entrepreneurship

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Module Teaching Objectives

To introduce students to the concept of innovation

To explain why it is important for all types of firm or organisation and country economies

To learn how to innovate and the role of ‘entrepreneurial management’ in this context

BS2402 Innovation & Entrepreneurship

Module Learning Outcomes

Understand what is meant by innovation

Understand what is meant by entrepreneurship

Assess why innovation and entrepreneurial management are important for wealth and value creation

Evaluate the potential importance of innovation and entrepreneurial management in your own organisation by using what you have learnt

BS2402 Innovation & Entrepreneurship

Your Expectations for module? Think /note down, for 1min and be ready to share

BS2402 Innovation & Entrepreneurship

Module Structure Overview

Date	Content	Manual ref	Assignment link
Wed 5th Sept	Introduction to Innovation & defining Assignment Brief. Entrepreneurship. Importance of innovation	Unit s 1,2,3	Define innovation & types. Recent innovations in org’n Understand assignment. Define entrepreneurship/ entrepreneurial management.
Sat 8th Sept	Entrepreneurial/ innovation mgt process Context for Innovation. Factors supporting/ hindering. Managing the process Overcoming barriers	Units 4,5,6	Behaviours that impede or facilitate entrepreneurial management . Critical factors/barriers? Making the innovation happen

BS2402 Innovation & Entrepreneurship

“There’s nothing quite like doing it…”

Entrepreneur

Teaching innovation and entrepreneurship...

Tension

“This is how it should be done…”

University

BS2402 Innovation & Entrepreneurship

7.51pm

‘Teaching innovation and entrepreneurship’ does seem at odds.

Actually I disagree about the university ‘this is how it should be done’.

Purpose of university should be getting you to think critically. Skill can take to your workplace.

But even so there is a tendancy of university teaching to be all about analysis rather than the getting down to doing it trial and error of the entrepreneurial mindset.

Can’t say we will get fully past this, but perhaps you will leave with some appreciation of the importance of innovation and ideas as to how to foster successful innovation further in your organisations.

Unit1: Introduction to Innovation & Entrepreneurship

Unit Learning Outcomes

Understand broadly what is meant by innovation

Understand broadly what is meant by entrepreneurship

Understand broadly why innovation and entrepreneurial management are important for the creation of social and financial value

Introduction to a basic organisational process model

Recognise the potential importance of innovation and entrepreneurial management in your own organisation

BS2402 Innovation & Entrepreneurship

What is innovation? What is your understanding of the term?

Brief class discussion

BS2402 Innovation & Entrepreneurship

Flip-chart answers

What is innovation? Participants in the EC Lisbon Council's 2010 Innovation Summit

Listen to this video clip: What is innovation?

http://www.youtube.com/watch?v=2NK0WR2GtFs

Afterwards –

Write down as many of the innovation descriptions as you can!

Just who are these people? Where do they come from

Class Discussion

BS2402 Innovation & Entrepreneurship

5min 24.

EIT = European Institute of Innovation & Technology.

The EIT is a body of the European Union. Our mission is to increase European sustainable growth and competitiveness by reinforcing the innovation capacity of the EU. We facilitate transitions: from idea to product, from lab to market, from student to entrepreneur.

To do so, we integrate higher education, research and business in areas of high societal need through our Knowledge and Innovation Communities (KICs), focused on the following topics: climate change mitigation (Climate-KIC), information and communication technologies (EIT ICT Labs) and sustainable energy (KIC InnoEnergy).

EIT headquarters are based in Budapest, Hungary. Knowledge and Innovation Communities gather hundreds of partners in 17 co-location centres across Europe

Suggest Google EIT – interesting information on what EU doing to promote innovation.

INNOVATION: A Definition (E. Roberts)

Successful Exploitation and Implementation

INNOVATION

Good Idea

Invention

INPUTS

Group member

Knowledge, skills, effort

Entrepreneurial/ Innovation Management Process

OUTPUTS

adding value

BS2402 Innovation & Entrepreneurship

KEY:

Ie: can consider Innovation both as being a THING = OUTPUT that adds value. “an innovation”

OR/AND

As being the PROCESS of achieving these. (also called entrepreneurial management process). “innovation” as verb/process.

Will come back to concept as Innovation Management/Entrepreneurial Management as a process next week.

Evolutionary “Creative Destruction” Joseph Schumpeter

“This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in….”

introducing new commodities or qualitatively better versions of existing ones;

finding new markets;

new methods of production and distribution;

new sources of production for existing commodities;

introducing new forms of economic organisations” (Schumpeter, 1942)

Schumpeter's Innovation Definition:

BS2402 Innovation & Entrepreneurship

Joseph Schumpeter was the first economist who clearly identified innovation as an outcome of entrepreneurship (Schumpeter 1934). He identifies the economic effects of an entrepreneur on the system. Schumpeter argues, early in his career, that an entrepreneur disrupts markets and causes new ones to be formed in circular flows.

Nb: His focus was primarily private industry. Had some suggested types/modes of innovation. (poss share examples, or just continue)

Defined different modes of innovation as:

New commodities (products) – e.g. Ipad;

New markets – (new segments) e.g. India offering surgery to UK people; e.g. 3M with an eye-scan technology developed to understand how people see traffic signs, adapting for advertising research.

Methods of production – e.g. Key-hole surgery. (& minute robots- even smaller incisions possible in future); float glass; synthetic insulin

Methods of distribution – e.g. Downloading music; online streaming of music and film.

New sources of production – e.g. Silicone;

New forms of organisations – e.g. Amazon; e-bay; Streetcar;

Note he still talks about it in an active, process ways. “introducing.”; “finding”; i.e. Both the process AND the outcome can be considered as innovation.

Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value.BIS (2011) http://www.bis.gov.uk/innovation

‘innovation is the process of successfully bringing something new into use, to a market or community, that satisfies need or latent demand’ (Gurling, 2010, Unit 1)

‘A process starting with an invention or an idea, proceeds with the development of the invention/idea and results in the introduction of a new product, process or service to the market place” (Acs and Audretch, 1998)

Companies achieve competitive advantage through acts of innovation. They approach innovation in its broadest sense, including both new technologies & new ways of doing things’ (Michael Porter 2009)

At most simple level “Something new of value to the world, made to happen!”

Broad set of Definitions for Innovation:

BS2402 Innovation & Entrepreneurship

Schmpeter focussed on markets and capatilism. But it isn’t just that.

Here other broad definitions for Innovation.

These mostly focus on the process – with value as outcome.

Without “new things” appearing in the marketplace:-

No stimulus to demand and supply

Jeopardises sustainable economic growth

Innovation is therefore an essential ingredient to a free-market economy to encourage growth in demand and supply – basic economics

Creative tides of destruction destroying old markets and replacing them with new ones

BS2402 Innovation & Entrepreneurship

Innovation creates value

Types of Value

Economic

Financial

Social

Environmental

Aesthetic

BS2402 Innovation & Entrepreneurship

Examples:

Economic/Financial: New products; New simultaneous project management process – allowed reduced product to market time for medicines – financial for drug Co (but also potentially economic and social if treat diseases better, sooner)

e.g. Microfinance – economic and social

e.g. Oyster card – economic, financial?

e.g. Congestion charge - environmental

e.g. Boris Bikes – Environmental

e.g. Key-hole surgery – social & economic (coz less time in hospital so save money); Spain – using online technology to enable patients to manage themselves more from home. Pal – setting up remote medical diagnostics for oil platforms and remote rural areas. (Social, economic)

e.g. A new design of bridge (first suspension bridge; Goya’s architectural style) – Aesthetic

Your examples?

Innovation is not the same as Creativity

Creativity: The generation of new ideas

Innovation: The successful exploitation of new ideas

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Kuhn suggests

“creativity forms something from nothing but that innovation shapes that something into products and services “ (Kuhn, 1985).

BS2402 Innovation & Entrepreneurship

Generation of ideas

So how do you find ideas?

Discuss then watch video:

Watch Video: Steve Jobs Where do ideas come from?

http://www.youtube.com/watch?v=NugRZGDbPFU

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The Creative Thinking Process

Creative Process

Knowledge

Accumulation

Ideas

Evaluation

Implementation

Incubation

BS2402 Innovation & Entrepreneurship

Knowledge

Accumulation

Ideas

Evaluation

Implementation

Incubation

Individual or team – which is better?

BS2402 Innovation & Entrepreneurship

“Design” links creativity and innovation

Shapes ideas to become practical and attractive propositions for users or customers

Design may be described as creativity to point to a specific end (Cox review on Creativity in Business: building on the UK’s strength 2005)

Design Application

Prototyping

Piloting

Idea/Invention

Innovation

BS2402 Innovation & Entrepreneurship

Recognise opportunity

Find Resources

Develop Venture by picking and deploying resources

Create Value

Entrepreneurial

Goals and Innovation Context

Strategic Vision and direction

Learning

CG Adapted Innovation and E’ship Management Model: Bessant and Tidd 2nd Ed 2011

BS2402 Innovation & Entrepreneurship

Innovations can be classified (or categorised) in many different ways

All to help think about what you can do to achieve successful innovation

So.....here are some categorisations ..

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Dimensions of innovations space

Transformational

Radical

Incremental

Product Service Process

Perceived extent of change

What is changed

(Tidd, Bessant and Pavitt)

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One way of considering innovation.

We will go into this in detail as it is critical to your first task in the assignment.

Tidd,Bessant & Pavitt’s: Definition of Innovation

Incremental Innovation – small improvements to existing products, services or processes- “do what we do but better”

Radical Innovation – Significantly different changes to products, services or processes - “ do what we do differently”

Transformational Innovation – Offering something that provides the platform on which other variations and generations can be built. (e.g. The wheel, printing press, internet – one thing, wide impact)

BS2402 Innovation & Entrepreneurship

Transformational Innovation – not found a good source of a definition, but think it is about the basis on which other innovations are built.

Tidd & Bessant talk about robust platform design = offering something which provides the platform ion which other variations and generations can be built.

e.g. Sony’s original walkman architecture. – spawned several generations of personal audio equipment.

e.g. Boeing 737 – over 30 years old, but design still being adapted for different users.

e.g. Intel and AMD with microprocessor families.

Transformational innovation leads to new growth platforms - for example, redefining the the toothbrush business as oral care leading not only to electric toothbrushes, but to a thorough re-examination of the oral care ecosystem. http://oysterinternational.com/white_papers.htm

e.g: The invention of the wheel. The printing press. The internet. Lots of examples like that. Dramatically changed life for all of us. One thing, huge impact, new curve.

Tidd,Bessant & Pavitt’s: Definition of Innovation

Product innovation – change in the things that (products/services) which an organisation offers

Process innovation - changes in the ways in which they are created and delivered

Position innovation-changes in the context in which the product for services are introduced ( Market)

Paradigm innovation which frame what the organisation does ( Strategic / Domain Transformation)

BS2402 Innovation & Entrepreneurship

Finnegan's Fish Bar: Video clip applying Bessant & Tidd’s innovation model to a Fish & Chip shop

http://www.managing-innovation.com/vr_finnigans.php

Take note of the innovation examples given, ready to discuss

BS2402 Innovation & Entrepreneurship

Greg, Louise, Iain/Shazi you will need to register to the book website to access the video www.iande.info for this video and others.

Check time

Innovation: the OECD Definition - 4 types of innovation identified in the Oslo Manual for measuring innovation:

Product Innovation: a good or service that is new or significantly improved.

Process innovation: involves a new or significantly improved production or delivery method

Marketing Innovation: Marketing innovation involves a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.

Organisational Innovation : Organisational innovation involves introducing a new organisational method in the firm’s business practices, workplace organisation or external relations.

These innovations can be new to the firm/educational institution, new to the market/sector or new to the world

BS2402 Innovation & Entrepreneurship

Discuss Organisational Innovation with class

These a bit like/overlap with the Tidd & Bessant:

Positioning = a bit like Marketing Innovations

Paradigm = a bit like Organisational Innovation.

Plus...... Service Innovation

A new or significantly improved service concept put into practice.

e.g. can be a new customer interaction channel, distribution system or a technological concept or a combination of them.

Service innovation always includes replicable elements that can be identified & systematically reproduced in other environments.

Service innovation benefits both the service producer and customers

Competitive edge for the service provider can be based based on some technology or systematic method.

BS2402 Innovation & Entrepreneurship

Poss handout only

Technical / technological innovation

…a mix of physical appliances and human ways of doing things involving:

1. Creating new knowledge

Generating technical ideas aimed at new and enhanced products, manufacturing processes and services

Developing those ideas into working prototypes; and

Transferring them into manufacturing, distribution and use

Sources: Scarborough and Corbin (1992); Roberts, E.B. (1988)

BS2402 Innovation & Entrepreneurship

Poss handout only

Social Innovation – Mulgan and Albury 2003

“New ideas that meet unmet needs, social innovations – are all around us.

Include Fair trade and restorative justice, hospices and kindergartens, distance learning and traffic calming.

Over last two centuries, innumerable social innovations, from cognitive behavioural therapy for prisoners to Wikipedia, have moved from margins to the mainstream.

As this has happened, many have passed through the three stages identified by Schopenhauer for any new ‘truth’:

‘First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident” “

BS2402 Innovation & Entrepreneurship

Poss handout only

Watch and listen: Skoll Foundation Video

An example of a social entrepreneurship starting with - Mohammed Yunus

Nobel Prize Winner Grammeen Bank for microfinance

http://www.youtube.com/watch?v=jk5LI_WcosQ

9 mins

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So who carries out innovation?

Entrepreneurs!

Where do we find them?

Individuals in independent new ventures – new venture entrepreneurship

Working inside organisations – intrapreneurs as individuals or teams

Organisational level – corporate entrepreneurship - many different types depending on the organisation characteristics and what needs to be done

BS2402 Innovation & Entrepreneurship

“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced.”

Peter Drucker on the relationship between Innovation & Entrepreneurship

Drucker 1991 HBR The Discipline of Innovation

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Innovation & Entrepreneurship

Different sides of the same coin!

Innovation

Entrepreneurship

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So what is it entrepreneurs do?

Class Discussion...

BS2402 Innovation & Entrepreneurship

Definition of Entrepreneurship: Individual

‘A Human Creative Act that builds something of value from practically nothing.

It is the pursuit of opportunity regardless of resources….to hand.

It requires vision, passion and the commitment to lead others in the pursuit of that vision.

It also takes a willingness to take calculated risks’

Source: Timmons New Venture Creation 3rd Edition

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‘Entrepreneurship is process by which individuals - either on their own or inside organisations - pursue opportunities without regard to the resources they currently control’

Stevenson, Roberts and Grousebeck 89

Individual or Corporate entrepreneurship

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Stevenson and Gumpert 1990

“the process of discovering innovative opportunities, evaluating them and managing the innovation process to bring the innovation successfully into use”

Sharma and Chrisman 1999

“ a process whereby an individual or a group of individuals in association with an established company, creates a new organisation or instigates renewal or innovation within the current organisation”

Corporate Entrepreneurship Definitions

BS2402 Innovation & Entrepreneurship

A pattern of management behaviour that produces innovation (individual, group or firm level)

Perceives and Identifies innovative opportunities

Takes ‘Risk’ in pursuing this opportunity

Finds and Gathers scarce resources into appropriate combinations to create an organisation, which delivers innovation and value to customer, founder, investor and stakeholder

Continually ‘reaches’ for the necessary resources to solve problems and foster firm growth (Baumol)

Entrepreneurship:

BS2402 Innovation & Entrepreneurship

Fitting the entrepreneurial management process onto innovation using Robert’s innovation model

Successful Exploitation and Implementation

INNOVATION

Good Idea

Invention

INPUTS

Group member

Knowledge, skills, effort

Entrepreneurial/ Innovation Management Process

OUTPUTS

adding or creating value

BS2402 Innovation & Entrepreneurship

Unit 2: Role of Innovation & Entrepreneurship in the Economy

BS2402 Innovation & Entrepreneurship

Why is entrepreneurship & Innovation so important?

Class Discussion

National Level

Organisation Level

Individual Level

BS2402 Innovation & Entrepreneurship

National Level - The impact of entrepreneurship / new firm starts / innovation on economic performance

Number of new enterprises linked to overall GDP performance ( Link of TEA / global entrepreneurship monitor to economic performance / OECD Audretsch & Thurik

I.e. positive effect of start-ups on economic growth.

In Developed Economies

Industry structure is generally shifting towards an increased role for small enterprises.

Extent and timing of this shift not identical across countries.

Shift in industry structures towards a greater role for SMEs heterogeneous / shaped by country-specific factors.

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UK “Innovation Nation” White Paper Mar. 2008

“Innovation is essential to the UK’s future economic prosperity and quality of life. To raise productivity, meet the challenges of globalisation and to live within our environmental and demographic limits, the UK must excel at all types of innovation.”

UK Coalition Government 2011

Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value. http://www.bis.gov.uk/innovation 2011

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Why innovate? EU Commission considers http://ec.europa.eu/enterprise/sme/innovation_en.htm#

“Innovation is now widely understood to be the driving force in economic growth. ( Addition CG- in a free market economy)

It is new products and services, and new methods for making or delivering them which add value to our economy, and enable us to improve standards of living.

SMEs are responsible for much of the innovation which leads to new higher value products and services (even if ultimately larger firms may take on production and mass marketing of such innovations), and so the European Commission seeks to promote innovation to SME’s and all organisations across Europe”

Organisational level

BS2402 Innovation & Entrepreneurship

Entrepreneurship & firm creation long been recognised as a vital force driving innovation.

With globalization & co-incident shift towards a knowledge-based economy, link between entrepreneurship policy & innovation received renewed attention.

By underpinning firm creation & firm expansion, entrepreneurship policies strengthen innovation, increasing productivity in the enterprise sector.

In return, policies fostering innovation will tend to spur firm creation as the results of R&D are commercialized.

OECD Fostering Entrepreneurship

BS2402 Innovation & Entrepreneurship

Individual level: The Organisation for Economic Co-Operation and Development

Towards an Enterprising Culture. (OECD (1989)

"An enterprising individual has a positive, flexible & adaptive disposition to change, seeing it as normal and as an opportunity rather than a problem.

To see change in this way, an enterprising individual has a security born of self-confidence, & is at ease when dealing with insecurity, risks & the unknown.

An enterprising individual has the capacity to initiate creative ideas & develop them into action in a determined manner.

An enterprising individual is able, even anxious to take responsibility, is an effective communicator, negotiator, influencer, planner & organiser. An enterprising individual is active, confident and purposeful — not uncertain & dependent“

BS2402 Innovation & Entrepreneurship

Economic renewal / rejuvenation within the business environment (see J. Schumpeter, 1934) and enterprise

Response to accelerating pace of technological change, shorter life cycles, globalisation of markets (Krondatiev Waves) (Tidd, Bessant & Pavitt)

Socio - political cohesion improvement in communities as a means of furthering economic development through the third sector (Mort, Weerawardena & Carnegie 2003)

Value Creation and Competitive Advantage for those able to mobilize knowledge , technological skills and experience to create new products processes and services (Barney 91)

Reasons for intense focus on Innovation

BS2402 Innovation & Entrepreneurship

Recognise opportunity

Find Resources

Develop Venture by picking and deploying resources

Create Value

Entrepreneurial

Goals and Innovation Context

Strategic Vision and direction

Learning

CG Adapted Innovation and E’ship Management Model: Bessant and Tidd 2nd Ed 2011

BS2402 Innovation & Entrepreneurship

Dyson Case Study: see electronic manual p 8 Unit 1

http://www.dyson.co.uk/about/story/

http://news.bbc.co.uk/1/hi/business/1802155.stm

http://news.bbc.co.uk/1/hi/uk/3046791.stm

View, Read and Discuss

BS2402 Innovation & Entrepreneurship

Where do ideas come from within the company?

How does the company encourage

Opportunity selection

Innovation development

Successful implementation ie the management process adopted

What barriers did he face in introducing the Dyson vacuum cleaner?

Is Dyson an entrepreneur? Why?

Dyson Case Study: see electronic manual p 8 Unit 1

BS2402 Innovation & Entrepreneurship

Your Organisation: Task before next time

Ask around amongst your colleagues at work and find out what “new things” have been introduced in the past.

It is very easy to forget that the things that surround you were once probably new?

Eg zips, trainers, biros, plastic bottles....the same has probably been happening in your work context...

Try and identify their categories using the previous slide labelled Dimensions of Innovation Space

Any people around who consistently “ make new things happen? Could you categorise them as having an entrepreneurial approach through successfully introducing innovation?

BS2402 Innovation & Entrepreneurship

Recognise opportunity

Find Resources

Develop Venture by picking and deploying resources

Create Value

Entrepreneurial

Goals and Innovation Context

Strategic Vision and direction

Learning

CG Adapted Innovation and E’ship Management Model: Bessant and Tidd 2nd Ed 2011

BS2402 Innovation & Entrepreneurship

Dyson Case Study: see electronic manual p 8 Unit 1

http://www.dyson.co.uk/about/story/

http://news.bbc.co.uk/1/hi/uk/3046791.stm

http://www.youtube.com/watch?v=vjD69XIv0xs

(4min)

View, Read and Discuss

BS2402 Innovation & Entrepreneurship

Interview with James Dyson (4min) Might work as intro to the case.

http://www.youtube.com/watch?v=vjD69XIv0xs

Failure (59secs)

http://www.youtube.com/watch?v=P5eIyRVpwmc&feature=g-vrec&context=G2d93a4eRVAAAAAAAAAA

The Dyson Story (includes failure & quite good on learning from marketing research) 4min02

http://www.youtube.com/watch?v=E4jpQGV_1Hw&feature=related

Where do ideas come from within the company?

How does the company encourage

Opportunity selection

Innovation development

Successful implementation ie the management process adopted

What barriers did he face in introducing the Dyson vacuum cleaner?

Is Dyson an entrepreneur? Why?

Dyson Case Study: see electronic manual p 8 Unit 1

BS2402 Innovation & Entrepreneurship

Exercise (if time) - in 3s. 10min.

Discuss your own organisations and/or sector.

What innovations can you think of within them?

Some may be quite old

Are they innovations created by your organisation or innovations that you use?

What type are they?

process, service, product?

incremental, radical?

BS2402 Innovation & Entrepreneurship

Your Organisation: Task before next time

Ask around amongst your colleagues at work and find out what “new things” have been introduced in the past.

It is very easy to forget that the things that surround you were once probably new?

Eg zips, trainers, biros, plastic bottles....the same has probably been happening in your work context...

Try and identify their categories using the previous slide labelled Dimensions of Innovation Space

Any people around who consistently “ make new things happen?” Could you categorise them as having an entrepreneurial approach through successfully introducing innovation?

BS2402 Innovation & Entrepreneurship

Your Organisation: Task throughout module

Can you think of any nagging work problems or opportunities that need action?

Start to think, and jot down ,ideas for solving these problems or taking advantage of the opportunity.

Can you get a few colleagues together, or suggest it as a subject for a work meeting?

We will look further at prompting ideas and creativity on Sat 3rd March.

BS2402 Innovation & Entrepreneurship

Contributions to Study of Entrepreneurship

CAUSES

Why?

Psychology

Sociology

Importance of the individual culture and community

BEHAVIOUR

How?

Management

How to achieve entrepreneurial behaviour and outcomes

EFFECTS

What?

Economics

Function by which growth in the economy is achieved

(Derived from Stevenson and Jarillo SMJ 1990)



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Economics = main interest to the Govt.

So: Huge focus on small businesses, as greater potential for growth and belief of a greater propensity to get breakthrough innovations from these. + number of small businesses!

What Characteristics do you associate with an Entrepreneur?

BS2402 Innovation & Entrepreneurship

DISCUSSION: flip-chart answers. (or, if needed, get all on feet to do)

“Once have said something keep quiet.”

Make sure as many people as possible contribute

The Entrepreneur… (from Southon & West, 2002)

Entrepreneurs are:

confident

charismatic

obsessed with work

ambitious

in a hurry

arrogant

manipulative

high in energy

poor completers

impatient at times

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Psychology: The Causes

Why do people behave as entrepreneurs?

Why do we want to know?

Picking the right people / economic growth

Psychological approach: Understanding the entrepreneurial personality

Personality Traits (Hisrich & O’Brien 82, Chell 91)

Cognitive Theories of Behaviour

Socio-cultural:

Environmentally contingent

BS2402 Innovation & Entrepreneurship

Personality Trait Approach:

Internal Characteristics which explain Behaviour ? -

Internal Locus of Control (Miller & Freisen 84)

Need for Achievement (McCelland 61)

Desire for Autonomy (McCelland 61)

Tolerance of Ambiguity and Uncertainty (Schere 82)

Risk Taking /Overoptimistic (Begley & Boyd 87)

Financial motivation?

BS2402 Innovation & Entrepreneurship

Number of personality traits have consistently come out in research.

Some research shows clear financial motivation- as a means of keeping score- but there has been lots of interest in recent years about social entrepreneurs – motivated by the mission rather than financial gains (classic example would be Bob Geldof with Live Aid).

(NB: recent example where Richard Branson & ??Bob Geldof have set up a world leaders think-tank to try to get great minds to find creative solutions to some of the worlds biggest problems – Nelson Mandela, Bill Clinton & others)

Watch and listen: Skoll Foundation Video

An example of a social entrepreneurship starting with - Mohammed Yunus

Nobel Prize Winner Grammeen Bank for microfinance

http://www.youtube.com/watch?v=jk5LI_WcosQ

9 mins

BS2402 Innovation & Entrepreneurship

Problems with the Trait approach

Little predictive power: no guarantee of entrepreneurial performance

Personality traits change over time

Ignores influence and interaction with the Environment: Social and Cultural, Nature and nurture debate

Difficulty in distinguishing the innate from learnt patterns of behaviour

BS2402 Innovation & Entrepreneurship

Socio-cultural Approach

Environment acts as stimulus

Geographic and Demographic Factors (Urban / Rural, Location / Cluster effect, Age Profile etc)

Economic Factors (Economic Climate, Legislative Environment, Specific Govt Assistance Schemes)

Social Factors (Class,Gender, Education, Family antecedents, Experience, Cultural background)

Market / Technology Development Environment acts as stimulus

BS2402 Innovation & Entrepreneurship

People have looked at particularly entrepreneurial communities.

Q: To what extent do you think these environmental factors have an impact?

Some impact, but entrepreneurs come from lots of different backgrounds.

Some communities – eg chinese, seem to be more entrepreneurial wherever they go in the world.

(Example clusters: manual shows music clusters in London and Manchester)

Example Social Factors: Anita Roddick – Italian Immigrant background. Family self employed + travelled alot. Impacted her attitudes and experiences for ideas.

Cognitive Theories: Entrepreneurial Behaviour Models

Behaviour modified by interaction with the environment

Personality traits + Environmental Factors + Individual Attitudes & Motivation + Learning = Behaviour

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The ‘Cornerstones’ of Support

Entrepreneur

Financier

Sales specialist

Delivery specialist

Technical innovator

Source: Southon & West

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Innovator doesn’t do it on his or her own. They need support – think dragon’s den.

Does this look like the functions in an organisation? Ie: R&D = technical; delivery = supply chain/operations;

Sales = sales & marketing.

Entrepreneur can take one or several of the roles. (often they are the technical innovator, but not necessarily)

(could share a Dragon’s Den example) – what is their role and where are the other elements of support coming from?

A pattern of management behaviour that produces innovation (individual, group or firm level)

Perceives and Identifies innovative opportunities

Takes ‘Risk’ in pursuing this opportunity (link to self-confidence)

Finds and Gathers scarce resources into appropriate combinations to produce an organisation to deliver that innovation(s)

Continually ‘reaches’ for the necessary resources to solve problems and foster firm growth (Baumol)

Management approach

Decision-making based on bias and heuristics; networking; opportunism

BS2402 Innovation & Entrepreneurship

GOT TO HERE – NOW CHECK VERSUS MANUAL – BEST POINTS FOR SLIDES

Ie: recognises innovative opportunities and encourages pursuit of these. (Acutely tuned to spotting opportunities)

RISK: Not bigger risks , just a different approach to risk. Some say ‘overoptimistic’ (Cooper et al, 1988, p3.17), - perhaps it is a lower fear of failure – or just an unwillingness to let that stop you (what is the risk of not taking the opportunity?) . Others link it to the decision-making process

Appropriate combinations of resources – it is this dynamic resource building concept of changing patterns and combinations of resources to create something unique that makes entrepreneurial management exp different from traditional management.

Q? what do we mean by resources? – people, finance, ‘stuff’.

Q: Heuristics = process of discovering & learning by doing/trial and error

Sharon Wright - Magnamol

Where did Sharon get the idea?

Which roles is Sharon currently fulfilling and what does she want from the Dragon/ Dragon to fund?

What risks has/ is she taking? (you may have to infer). What do you think spurred her on to take the risks?

What resources is Sharon using currently?

What characteristics does Sharon have that have helped her succeed, and so impressed the Dragons?

BS2402 Innovation & Entrepreneurship

Video = to 7min 50 (or 8min 14 inc magic wand). Have to explain –get more money than requested from Dragons that wants.

Idea:

From previous employment /knowledge & practical problem that needs a solution.

Roles:

Sharon – technical innovator; delivery specialist; sales – all currently.

Dragon - finance + funds for delivery probably so can do her ‘sales’/ambassador role.

Risks:

Gave up own job; Single mum – no other income (e.g. from partner).

Spurred on by self-belief that could make this big.

Resources:

Just self, office, one part-time admin (1 day per week). (i.e. Very few resources – no fat)

Characteristics:

Self-confidence and belief ; ambition (going global); impatience – 2 years wants to be further forward; forward thinking – already next invention; determination & stamina; pro-active – approached BT & has achieved contracts + got patent;

Recognise opportunity

Find Resources

Develop Venture by picking and deploying resources

Create Value

Entrepreneurial

Goals and Innovation Context

Strategic Vision and direction

Learning

CG Adapted Innovation and E’ship Management Model: Bessant and Tidd 2nd Ed 2011

BS2402 Innovation & Entrepreneurship

Entrepreneurial Management Style (after Stevenson & Gumpert , 1989)

‘PROMOTOR’ ‘TRUSTEE’

‘Entrepreneurial’ ‘Administrative’

Proactive Disinclined to change

Tolerant of uncertainty and ambiguity Guards resources

Able to make incremental changes in Interested in maintaining

response to environmental pressures the status quo

Q: What type of manager is your manger?

BS2402 Innovation & Entrepreneurship

This and next slide – In groups of 3 or 4. Discuss where your manager and organisation are. Will show where potential barriers to your innovation could be.

Your type of manager – will influence how easily you can implement an innovation.

They could be a champion or a barrier.

(Q – what is an intrapraneur? Internal entrepreneur – think difficulty of this. Can you think of people in your organisation? – My example ‘Vivek’ – brought in to foster innovation. Continual battling against the tide – “overoptimism/overselling” required to get people to buy into new ideas)

Which Types is G-tec here of Organisation (Burns and Stalker, 1961)

‘mechanistic reproducer’ ‘organic innovator’

Routines and competencies similar to existing organisations

Copied routines

Decisions base on ‘rational’ and ‘scientific’ principles

Formal planning and budgeting

Risk averse resource maximisers

Structured heirarchy

Competencies and routines significantly different to others

Decisions based on cognitive biases and heuristics

Incremental change to direction and resource allocation expected.

New resource combinations

Overconfidence and optimism

Resource leveragers; use rather than own

Flat organisation structure

Where does your organisation sit on this continuum?

BS2402 Innovation & Entrepreneurship

At Organisational level = Corporate Entrepreneurship.

Rational /scientific principles – assumes can analyse the environment fully and make strategic decisions based on this. Classic annual strategic review/budgeting process w little in between.

Planning – still needed in the innovative organisation, but may not be as formal as the mechanistic reproducer. “Formal planning is often the enemy of organisational adaption to innovation opportunities” (Stevenson & Gumpert, 1985)

Q = why would this be so?

Incremental strategy – assumes you can’t know all environmental impacts and hence maintain acute awareness of environment and flexibility to change as needed.

New resource combinations – eg: Direct line insurance (?); First direct;

Q: If you look at these why do you think small organisations have a tendancy to be more entrepreneurial than large organisations? (NOTE: resource constraints tend to be the main reason small organisations manage differently. They don’t have the resources so have to be imaginative and network to get resources & pursue opportunities.)

Q: Think public sector – what are the particular issues for the public sector? Get people’s responses (Beaurocratic; formal planning; risk-averse: NOTE – risks perceived as big eg: education, health)

Where your organisation sits on this continuum - will influence how easily you can implement an innovation.

It could support or be a barrier in particular areas.

Summary

Defined innovation & considered types of innovation

Considered the importance of innovation for different groups

Assessed entrepreneurship from different perspectives.

Started to consider entrepreneurial management............more Saturday 10th September

BS2402 Innovation & Entrepreneurship

Lesson Plans/ Process

Date	Content	Manual ref	Assignment link
Wed 5th Sept	Intro to innovation	Unit 1	Introduction
	Assignment brief Importance of innovation. Entrepreneurship and intro to entrepreneurial management.	Unit 2, 3;	Understand assignment Defining innovation, entrepreneurship, entrepreneurial management & importance of innovation.
Sat 8th Sept	Context for innovation including management orientation Innovation process . Ideas generation	Units 4, 5 . Part unit 6	Critically analyse & evaluate behaviour that supports innovation in your organisation. Starting ideas generation for your specific innovation.
	Barriers to innovation. Assignment Q&A	Unit 6	Identify barriers to innovation in your organisation & how to overcome them

BS2402 Innovation & Entrepreneurship

7.42pm

Setup of sessions. How relates to manual and assignment.

Run through.

NB: done so that can start doing your assignment as we go through the sessions.