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Hi,please follow the requirement to finish Due in 3 days APA format 6 pages The demands of leadership almost invariably exceed the capacity of a single person to meet the needs at hand. Even the most successful and iconic leaders of the past century—Churchill, Roosevelt, Mandela, Thatcher, Gandhi, and King—were not complete leaders. Although Churchill and King may go down in history as two of the 20th century’s most successful communicative leaders, their perfor- mances as either analytical or relational leaders are undistinguished. Mandela and Gandhi were deeply reflective leaders, seeing their own place in the context of the struggles of millions, but neither showed distinction in systems leadership. In the context of education, many leaders seem less inclined to grasp the architectural vision of leader- ship that was posited in Chapter 3 and more likely to embrace the faux composite historical models in which the leader is simultane- ously the great communicator, analyst, and a master of reflection. From such mythology are born the unrealistic expectations of com- munities, colleagues, and leaders themselves. Even the best of the lot frequently think of themselves as a failure because of their inability to attend three events simultaneously. 32 – 4 – The Dimensions of Leadership 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 32 The Dimensions of Leadership 33 This chapter is not about identifying leadership failures or destroying historical figures. Rather, the focus of this chapter is to explain the dimensions of leadership in a way that allows leaders to capitalize on their strengths and take a complementary approach to their weaknesses. We need not fantasize about Churchill’s missing analytical skills or engage in fruitless presumption that Gandhi was a master of systems thinking in order to appreciate their exceptional leadership qualities. Similarly, leaders with prodigious analytical and confrontational talents have made enormous contributions to gov- ernment, education, and business, even though those leaders lacked abilities in communication and introspection. Great leaders are not mythological composites of every dimension of leadership. Instead they have self-confidence, and without hubris they acknowledge their deficiencies and fill their subordinate ranks not with lackeys but with exceptional leaders who bring complementary strengths to the organization. The dimensions of leadership in the following paragraphs repre- sent a wide range of leadership characteristics and skills. A good case can be made that these complementary dimensions are particularly important for educational leaders. Although these dimensions can form the basis for thoughtful self-assessment and organizational evalu- ations of leaders, such assessments must be used with care. A deficiency in one dimension of leadership is not necessarily a prescription for improving that apparent failing, but rather a suggestion that the lead- ership team should be broadened to include complementary dimen- sions. Unfortunately, the vast majority of contemporary leadership evaluations fall into one of two extremes, either omitting many of these dimensions or including all of them in a fruitless pursuit of per- fection. In one recent study, we found that almost 20 percent of edu- cational leaders had never been evaluated in their current position, 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 33 34 The Learning Leader: How to Focus School Improvement for Better Results and more than half of the remaining 80 percent received evaluations that were ambiguous, inconsistent, and unrelated to their most important responsibilities (Reeves, 2004c). The dimensions of leader- ship are neither a checklist of things to accomplish nor a scale of per- fection against which leaders measure themselves. Rather, these dimensions describe components of leadership that are necessary in every leadership team, but rarely present in a single leader. Leaders need not, indeed they cannot, be every dimension themselves, but they can and must ensure that every leadership dimension is provided by some member of the leadership team. Visionary Leadership “The last thing IBM needs right now is a vision.” Louis Gerstner (2002, p. 68) famously said this at the beginning of his turnaround at IBM. Gerstner, credited with saving IBM from oblivion, clearly had run out of patience with traditional strategic planning and “visioning” exercises. The leader, faced with a crisis, needed to make some pro- foundly important decisions about products, markets, and people, and then he had to flawlessly execute those decisions. Gerstner’s implication was that the concept of creating a vision was a squishy relic of the last century, when favorable economic conditions allowed leaders to indulge in such frivolities. Gerstner relented, however, and acknowledged the need for a dramatic change in vision for IBM. Without this profound change in direction, the company might have joined others on the technology scrap heap. The first obligations of leadership are articulating a compelling vision and linking clear stan- dards of action that will accomplish the vision. This approach applies to tasks small and large, from respecting the time of colleagues by 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 34 The Dimensions of Leadership 35 starting and ending meetings on time to keeping commitments and meeting goals. Success is not an ephemeral concept, but it is clearly described. Every team member knows every day what the word “suc- cess” means and how it has been achieved. Visionary leaders are not grandiose, as their visions are more likely to be the blueprints of the architect than the uncertain and cloudy visions of the dreamer. Great visionary leaders challenge the status quo with terminology that is clear and vivid. Perhaps half of the readers of this book remember the Berlin Wall, the dividing line between the Communists of the East and the promising democracies of the West. When President Reagan encouraged his Soviet counter- part to “Tear down this wall!” it was a vision that few had conceived since the end of World War II, yet within years it was realized. In ear- lier generations Thomas Paine and the anonymous authors of The Federalist Papers created a vision not as a skeleton, but as a living and breathing democracy, equipped with bones, muscle, sinew, and flesh. Centuries earlier, the authors of The Magna Carta envisioned a world of laws, and both Hammurabi in the ancient East and Hebrew schools in the ancient West believed that a society based upon jus- tice, mercy, and walking humbly with one’s god (Micah 6:8) would survive long past those societies whose gods were rife with covetous- ness, greed, and self-aggrandizement. By definition, vision contemplates the future, and the future inevitably involves uncertainty, change, and fear. Therefore, visions that are fuzzy and described in a haze of mystic reassurance have a counterproductive effect. “My vision is of infinite possibilities, global expansion, and unlimited horizons,” the leader claims. “But what does that mean?” followers inevitably ask. Unfortunately, the foot soldiers who are supposed to be inspired by a vision rarely express their doubts in a manner that reaches senior leadership. As a result, vision 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 35 36 The Learning Leader: How to Focus School Improvement for Better Results statements, like many traditional strategic planning processes, remain a fiction of the executive suite and have little practical importance outside the confines of the annual offsite retreat, where leaders are safely isolated from organizational realities. Indeed, I would question the excessive formality and awkward phrasing that committees bring to vision statements. The cynicism that abounds in organizations, with few employees trusting their leaders, frequently stems from the gulf between the ordinary details of daily organizational life and the earnest protestations of leaders as seen in vision statements (Kouzes & Posner, 2000, 2003a, 2003b). The organization need not be this way. Leaders can use vision to build trust rather than break it if they are willing to let their rhetoric give way to reality and allow their vision to become a blueprint rather than public relations baloney. Effective visions help individuals understand that they are part of a larger world and also reassure them of their individual importance to the organization. Equipped with an effective vision, the leader can respond in a consistent and coherent way to these questions: • Where are we headed as an organization this year? • Where will we be three to five years from now? • What parts of our organization will be the same, and what will change? • Will there still be a place for me in the future? • How will my work change? • What will I need to learn in order to be more valuable to the organization in the future? • Why will I still want to be a part of this organization in the future? 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 36 The Dimensions of Leadership 37 The answers to these questions are personal and are communi- cated in dozens of moments of truth and in informal contacts between leaders and colleagues throughout the year. Formal annual reports and after-dinner speeches may address these issues in a general way, but vision must be communicated by leaders through- out the organization in personal encounters. Some visions in edu- cational organizations are decidedly scary, particularly for people who may feel that their skills and abilities are not part of the leader’s vision. Consider this statement: “We will be a learning organization, using cutting edge technology to deliver world-class educational opportunities for our students.” What does that mean to the literature teacher who associates computers with plagiarism, fragmentary speech patterns, and emotional isolation? What does that mean to the finance clerk and personnel specialists who have seen a growing workload with no increases in staff? While technology will play a role in the vision of most organizations, there is a better way to communi- cate the impact and meaning of that vision. As an alternative to the formal vision statement, consider this conversation: Jean, you’ve got a great future here. Your integrity and work ethic are terrific, and the way that you collaborate with your colleagues is a real model for others. You’ve probably noticed that we’re using a lot more technology now than when you first came here, and I see us moving in that direction in the future. Technology will never replace human intelligence and creativity, but we’ve got to use every technology tool we can, including some new ones that neither one of us has learned yet, to serve our stakeholders. With your abilities and advanced technology, I can see you doing great things in the future. I’d like to support you in some professional development to build your technology skills. What do you think about it? 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 37 38 The Learning Leader: How to Focus School Improvement for Better Results Visionary leadership, in sum, may include the big picture, but it is insufficient for giving meaning and substance to a vision. Commit- ment depends upon knowing one’s personal role in the vision and seeing a clear path to how to get there. Relational Leadership When talk turns to human relationships and emotional intelligence in some leadership circles, eye rolling and finger tapping are the most obvious signs of impatience with the soft side of organizational life. There has been a great deal of uninformed blather written and said about these subjects, and some of it is not only wrong but destructive. In education in particular, the presumption that self- esteem is a characteristic to be nurtured and developed in students and adults has morphed into a justification for narcissism, insulating people from honest feedback that is necessary for improved perfor- mance. In an important article entitled “Exploding the Self-Esteem Myth,” Baumeister, Campbell, Krueger, and Vohs (2004) concluded after a review of multiple studies, “We have found little to indicate that indiscriminately promoting self-esteem in today’s children or adults, just for being themselves, offers society any compensatory benefits beyond the seductive pleasure it brings to those engaged in the exercise.” These are hard words indeed for educational leaders who have been force-fed a gospel that says high self-esteem is the root of success and low self-esteem is the root of problems ranging from employee disengagement to teenage drug abuse. This conclu- sion might be welcome news for pathological jerks who have been complaining for years that faculty meetings are not group therapy, administrators are not therapists, and the workplace is not your 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 38 The Dimensions of Leadership 39 family. “The firings will continue,” they might add, “until morale improves.” Surely there is a middle ground between leadership by Barney the dinosaur and leadership by Attila the Hun. Relational leadership does not depend on false affirmations provided in vain attempts to build the self-esteem of subordinates, but rather on the trust and integrity that are at the foundation of any enduring relationship. Interestingly, the foremost expert on emotional intelligence, Daniel Goleman, makes the case for relational leadership in strik- ingly cold and analytical terms. Citing a mountain of research including long-term longitudinal studies of organizational effective- ness, Goleman and colleagues (2002) conclude that relationship skills account for nearly three times as much impact on organizational performance as analytical skills do. Casciaro and Lobo (2005) found that those who lack relationship skills, the “competent jerks” in the words of the researchers, have negative influences on the organiza- tion despite their technical prowess, because so few people in the organization can stand to work with them. Kouzes and Posner (2000, 2003a, 2003b) find that in studies of more than 1 million leaders, the trust and credibility that stem from meaningful relationships are essential for leadership success. Researchers differ on how to approach the challenges of emotional intelligence and relational leadership. Some, like Goleman, assert vigorously that specific rela- tionship skills can be taught and learned. Others differ, asserting that someone with good relationship skills can likely be taught technical skills, whereas someone deficient in relationship skills will likely have some difficulty learning the nuances and intuitive practices that are associated with building and maintaining successful relationships. In other words, you can send a jerk to charm school, but at the end of the day, he’s still a jerk. 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 39 40 The Learning Leader: How to Focus School Improvement for Better Results Tolerating jerks and a climate of incivility has a tangible as well as emotional cost. Gardiner Morse (2005) suggests that the costs of uncivil climates, including time wasted avoiding malcontents, worry- ing about their actions, and, worst of all, looking for other jobs, could exceed $50,000 per employee per year across all industries in the United States. An astonishing amount of turnover, which creates huge costs in training, lowers productivity, and creates poorer service quality, is due to people leaving toxic work environments. What can relational leaders do? You might want to listen to your own colleagues describe the elements of the effective relational leader, but the fol- lowing list is a good start: listening without interruption or prejudg- ment, respect for confidentiality, and genuine empathy achieved through deliberate inquiry. Relational leaders listen to their colleagues without interrupting or prejudging their statements. Tape a meeting or phone call with a sub- ordinate and confront the data. How many times did each of you speak? Interrupt? Ask for clarification before coming to a judgment? Leaders frequently ascend to their positions because they are good communicators, or at least it appears that way. They make wonderful presentations to community groups and governing boards. When they talk to colleagues, they do so with conviction and enthusiasm. They are accustomed to hearing applause rather than questions and challenges. They are far more comfortable “communicating” through talking rather than listening. When senior leaders experience decades of positive reinforcement for such one-sided communica- tion, it is little wonder that so few leaders understand the value of listening. Every leader needs a Nathan, the only member of King David’s entourage who was willing to publicly confront the king when he was wrong. 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 40 The Dimensions of Leadership 41 Relational leaders respect confidences, never betraying a secret or private conversation. The only exceptions are when the leader has a legal obligation to reveal a confidential conversation, such as when there are allegations of child abuse, employee harassment, or other illegal activities. Relational leaders practice empathy through deliberate inquiry. They don’t say, “I know just how you feel,” because, in fact, they do not know how others feel. Recognizing this, relational leaders ask their colleagues directly about what gives them great joy and what causes them heartache. They follow the advice of Marcus Buckingham (2005b) and provide the unique attention, feedback, and support that each colleague needs. Some employees need to be heard in a one to one setting, while others would be nervous and feel put on the spot in such an environment. Some colleagues would appreciate recognition before a group, while others would find the attention embarrassing and threatening to their peer relationships. Some employees appreciate recognition for their daily technical expertise, while others prefer recognition that is rare, unusual, and reserved for exceptional performance. Unskilled relational leaders presume that the rest of the world is a reflection of themselves, and they motivate, reward, and communicate in the way that reflects their own preferences. If they are comfortable with technical jargon, they pour it on their colleagues, presuming that people are impressed rather than bewildered by it. If they find financial rewards motivat- ing, they presume that colleagues should be grateful for a raise or improvement in benefits, despite evidence that their colleagues find personal appreciation more rewarding. If relational leaders organize their lives in bullet points sent through e-mail, they communicate that way, even if they discover that some colleagues prefer rich and 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 41 42 The Learning Leader: How to Focus School Improvement for Better Results vivid descriptions of expectations rather than bullet points that strike them as brusque and demeaning. Some leadership literature states that using relational practices is situational: appropriate when things are going well but out of line in times of high anxiety. Some experts argue that high degrees of direction and a commanding presence are required for an organi- zational turnaround (Goleman, 2000; Hersey, 1985; Hersey & Blanchard, 1977). There is little evidence, however, that chameleons make great leaders or, for that matter, that leaders are capable of transforming their personal preferences in communication and man- agement style as organizational life changes. On the contrary, when the going is particularly tough, budgets are cut, layoffs are imminent, public scrutiny is high, and the pressure seems nearly unbearable, then the skills of the relational leader are particularly important. This is especially true in education, where more than 80 percent of teach- ers leaving highly challenging schools reported that a higher salary would not have kept them there (Johnson & Duffett, 2003). In orga- nizations of all types, public and private, large and small, for-profit and nonprofit, relationships—particularly with leaders—are one of the single greatest predictors of employee performance, satisfaction, and turnover (Buckingham & Coffman, 1999). Relational leaders exhibit genuine passion for their mission and the people around them. When does the turnaround leader have time for passion? The direct answer is every single day. Passion, respect, civility, and gentility require not only time but genuine interest. In the midst of the most hectic organizational turnaround, babies will be born, relatives will fall ill, couples will become engaged, and couples will break up. In other words, the emotional lives of colleagues will continue whether or not the organization recognizes that there is life outside of work. The leader with relational intelligence stops—with 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 42 The Dimensions of Leadership 43 surprising alacrity—to divert attention from the organization to the person, to transfer attention from the ensemble to the soloist. While passion does not appear on the balance sheet, it is surely the asset that matters most for leaders and followers alike, and passion is most wisely invested by leaders in human relationships. Systems Leadership In my discussion of Leadership Maps later in Chapters 8 and 9, I refer to the dots marking the intersection of performance and leadership decisions as “nodes,” a term chosen because of its association with the science of networks. Nodes represent complex connections, and understanding these complex interactions is at the heart of systems thinking. With the addition of a single variable (team member, sup- plier, creditor, customer, patient, service provider, student, investor, or interest groups), the number of systematic interactions increases exponentially. In fact, we can plot the relationship between the increase in nodes and system complexity as shown in Figure 4.1. This chart reflects the potential complexity for only seven nodes, but consider the interactions for which most leaders are responsible. You could list a couple dozen and not depart from the confines of the instructional staff of a school. But systems leaders also understand how bus drivers, administrative support staff, cafeteria workers, finance specialists, and a host of other people influence student achievement and core organizational objectives. They know, for example, that bus drivers who understand and apply lessons on student motivation and discipline will deliver students to school on time, safely, and ready to learn. Systems leaders know that an error by a finance clerk who is right 99.5 percent of the time can destroy the morale and effectiveness 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 43 44 The Learning Leader: How to Focus School Improvement for Better Results of five classroom teachers in a district with 1,000 employees. What is the level of complexity if the leader considers only 20 nodes and their possible interactions? Consider Figure 4.2. The first column lists the number of nodes, and the second column lists the number of interactions, calculated by the quantity of nodes minus one, and that number is multiplied by each smaller number in the number system down to 1. For example, in a network of three nodes, there are two potential interactions (3 minus 1 = 2, and 2 multiplied by 1 = 2). In a network of four nodes, there are six potential interactions (4 minus 1 = 3, and 3 times 2 times 1 = 6). With just a few more nodes, the complexity is staggering. Although all interactions are not equally important, there are far more interactions than many leaders acknowledge. Only a handful of school leaders, for example, require central office departments to post and share data in a transparent manner with the same diligence that is required of schools. When they do, the community sees, for 0 100 200 300 400 500 600 700 800 N o . o f P o te n ti a l In te ra c ti o n s No. of Nodes in System 1 2 3 4 5 6 7 4.1 — The Complexity of Systems Leadership 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 44 The Dimensions of Leadership 45 example, how energy savings, food service quality, bus safety, and the talent pipeline provided by the human resources department all con- tribute to the mission of the organization. The leader with systems intelligence must take the time to understand each interaction and its impact on the entire system, and then communicate this complexity in a manner that enables each member of the organization to under- stand and consistently use these important interconnections. This practice recalls the concept of the leader as architect who is able to make complex connections and master thousands of details in blue- prints, yet build a temple that is masterful in conception and design and elegant in the simplicity of its steps, columns, and roof. Thus systems leadership is not merely about complexity but about an even greater challenge: simplicity. This book is not the forum for a Number of Nodes Potential Interactions 1 0 2 1 3 2 4 6 5 24 6 120 7 720 8 5,040 9 40,320 10 362,880 11 3,628,800 12 39,916,800 13 479,001,600 14 6,227,020,800 15 87,178,291,200 16 1,307,674,368,000 17 20,922,789,888,000 18 355,687,428,096,000 19 6,402,373,705,728,000 20 121,645,100,408,832,000 4.2 — Complexity Beyond Seven Nodes 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 45 46 The Learning Leader: How to Focus School Improvement for Better Results rant on the irrelevance of many graduate school leadership programs, though Levine and his colleagues (2005) have given us a splendid and long overdue start. Equipped with many advanced degrees and years of bad intellectual habits from writing dissertations, the gradu- ates of educational leadership programs are sometimes skilled at ren- dering simple subjects complex, substituting jargon for plain speech. It is far more difficult to take something that is complex, such as sys- tems leadership, and make it simple. For example, despite the appar- ent overwhelming complexity in Figure 4.2, network connections can be surprisingly direct. This idea is at the heart of the theory of Six Degrees of Separation, which was popularized by a Broadway play but is in fact based on experiments performed by psychology professor Stanley Milgram at Harvard almost 40 years ago. Using humans as a network and select- ing what seemed to Milgram to be locations galaxies apart, Kansas and Massachusetts, the researchers sent letters to randomly selected people in Wichita and asked them to forward the letter to someone they knew “on a first name basis” who might know the target person in Cambridge. The participants’ packets were equipped with 200 for- warding letters, based on the best estimate of the number of forwarded mailings that would be required to make the journey. The average number of actual times that letters were forwarded: 5.5. Though the Broadway play mischaracterized the research to suggest that everyone in the world is separated by only six people, and Milgram’s research has been challenged on many counts, more contemporary reviews sug- gest that even in the most complex of network interactions (Barabási, 2003), six degrees of separation may be eerily close to the mark. Before I was acquainted with the Milgram and Barabási research, I had postulated the Rule of Six (Reeves, 2002a) as my best estimate of the maximum number of priorities on which a leader could focus, 3380-04_Ch04-rev.qxd 3/22/06 2:40 PM Page 46 The Dimensions of Leadership 47 noting that those who claimed to have dozens of “priorities” in fact had none. Because every leader has far more than half a dozen people, tasks, projects, and constituencies all clamoring for priority treatment, the task of the systems leader is to know which of those competing factors have the greatest leverage. For example, we will learn later that some elements of teachers’ professional practices, such as focusing on nonfiction writing and immediate feedback, have a disproportionate impact on student achievement across a wide variety of subjects. Therefore, while it is folly for a leader to claim to monitor all effective teaching practices, it is malfeasance to abdicate the respon- sibility and monitor none of them. The pilot of the small private air- plane in which I am now flying has 29 gauges in front of him—I just counted—along with a radar screen, navigation equipment, and a bank of radios. While he may conduct an occasional instrument scan, as pilots are trained to do, he focuses most of his attention on this particularly turbulent flight on his attitude indicator, compass, and altimeter. When we are in the clouds and have no external visual references, we need to know if we are flying right side up, in the right direction, at the altitude where we promised the air traffic con- troller we would be, and safely away from other aircraft. The pilot also keeps an eye on the gas and oil pressure, and before landing, he also will check the light that confirms our landing gear has been deployed. The other gauges may be interesting, but even in perfect weather they do not command the attention of the pilot as much as those six indicators. An educational leader faces an array of … Springer Texts in Business and Economics Entrepreneurship and Innovation Tim Mazzarol Sophie Reboud Theory, Practice and Context Fourth Edition Springer Texts in Business and Economics More information about this series at http://www.springer.com/series/10099 http://www.springer.com/series/10099 Tim Mazzarol • Sophie Reboud Entrepreneurship and Innovation Theory, Practice and Context Fourth Edition Tim Mazzarol University of Western Australia Crawley, WA, Australia Sophie Reboud Burgundy School of Business Dijon, France ISSN 2192-4333 ISSN 2192-4341 (electronic) Springer Texts in Business and Economics ISBN 978-981-13-9411-9 ISBN 978-981-13-9412-6 (eBook) https://doi.org/10.1007/978-981-13-9412-6 © Springer Nature Singapore Pte Ltd. 2020 This work is subject to copyright. 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The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore 3rd edition © Tilde Publishing and Distribution 2017 https://doi.org/10.1007/978-981-13-9412-6 v Contents 1 Entrepreneurship as a Social and Economic Process . . . . . . . . . . . . . 1 1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 The Benefits of Entrepreneurial Activity . . . . . . . . . . . . . . . . . . . 3 1.3 Necessity and Opportunity Entrepreneurs . . . . . . . . . . . . . . . . . . 5 1.4 Attitudes Towards Entrepreneurship as a Career . . . . . . . . . . . . . 8 1.5 The Pursuit of High-Growth Firms . . . . . . . . . . . . . . . . . . . . . . . 10 1.6 Global Trends in Entrepreneurship and Innovation . . . . . . . . . . . 10 1.6.1 Shift from a ‘Managed’ to an ‘Entrepreneurial Economy’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.6.2 Rise of the ‘Knowledge Economy’ . . . . . . . . . . . . . . . 11 1.6.3 Strategically Networked Innovation . . . . . . . . . . . . . . . 11 1.6.4 Globalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.6.5 Low, Mid and High-Technology Innovation . . . . . . . . 12 1.6.6 Social Entrepreneurship and Innovation . . . . . . . . . . . 12 1.7 What Is an Entrepreneur? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 1.8 The Entrepreneurship Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1.9 Defining Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 1.10 Managers, Entrepreneurs and Entrepreneurial Managers . . . . . . 16 1.10.1 Entrepreneurs and Small Business . . . . . . . . . . . . . . . . 18 1.11 Defining Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1.12 Types of Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 1.13 Innovation Lifecycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 1.14 Sources of Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1.14.1 Encouraging Entrepreneurship and Innovation . . . . . . 25 1.15 National Innovation Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 1.16 Strategies to Encourage Entrepreneurship . . . . . . . . . . . . . . . . . . 28 1.17 Strategies to Encourage Innovation . . . . . . . . . . . . . . . . . . . . . . . 29 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 2 The Entrepreneur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 2.2 Common Characteristics of Entrepreneurs . . . . . . . . . . . . . . . . . 36 2.3 Are Entrepreneurs Born or Made? . . . . . . . . . . . . . . . . . . . . . . . . 39 2.4 Entrepreneurial Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 vi 2.5 Models of Entrepreneurial Motivation . . . . . . . . . . . . . . . . . . . . . 41 2.6 Factors Influencing Entrepreneurial Behaviour . . . . . . . . . . . . . . 43 2.7 The Influence of Life Stage on Entrepreneurial Learning and Behaviour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 2.8 Measuring Entrepreneurial Characteristics . . . . . . . . . . . . . . . . . 46 2.9 General Enterprising Tendency (GET) Test . . . . . . . . . . . . . . . . . 47 2.9.1 Need for Achievement . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.9.2 Creativity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.9.3 Desire for Autonomy . . . . . . . . . . . . . . . . . . . . . . . . . . 48 2.9.4 Risk-Taking Orientation . . . . . . . . . . . . . . . . . . . . . . . . 49 2.9.5 Internal Locus of Control . . . . . . . . . . . . . . . . . . . . . . . 49 2.10 Awakening the Entrepreneur: Application of the GET Test . . . . . 50 2.11 Entrepreneurial Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 2.11.1 Measuring Entrepreneurial Orientation . . . . . . . . . . . . 54 2.11.2 Applying Entrepreneurial Orientation . . . . . . . . . . . . . 55 2.12 The Dark Side of Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . 57 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 3 The Entrepreneurial Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 3.2 The Entrepreneurial Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 3.2.1 Opportunity Screening . . . . . . . . . . . . . . . . . . . . . . . . . 64 3.2.2 Marshalling Resources . . . . . . . . . . . . . . . . . . . . . . . . . 65 3.2.3 Building the Capability of the Team . . . . . . . . . . . . . . 66 3.3 The Theory of Effectuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 3.4 The Entrepreneurial Process Model . . . . . . . . . . . . . . . . . . . . . . . 68 3.5 3M Analysis for Opportunity Screening . . . . . . . . . . . . . . . . . . . 69 3.5.1 Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.5.2 Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 3.5.3 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 3.6 The New Venture Creation Process . . . . . . . . . . . . . . . . . . . . . . . 73 3.7 A Study of the Process of Enterprise Formation . . . . . . . . . . . . . 74 3.7.1 Actions Taken Prior to Launch or Abandonment . . . . . 75 3.7.2 Triggers and Barriers to New Venture Creation . . . . . . 75 3.7.3 Implications of the Study . . . . . . . . . . . . . . . . . . . . . . . 77 3.8 The Importance of Creativity Management . . . . . . . . . . . . . . . . . 77 3.8.1 The Creative Thinking Process . . . . . . . . . . . . . . . . . . 78 3.8.2 Encouraging Creativity in the Workplace . . . . . . . . . . 79 3.9 The Effects of Time Pressure on Creativity . . . . . . . . . . . . . . . . . 81 3.10 Creating Rich Pictures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 3.11 Applying Creativity Tools to Systems Thinking . . . . . . . . . . . . . 84 3.11.1 Generators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 3.11.2 Conceptualisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 3.11.3 Optimisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 3.11.4 Implementers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Contents vii 3.11.5 Stage 1 Initiation: Problem Finding . . . . . . . . . . . . . . . 87 3.11.6 Stage 2 Testing Understanding: Fact Finding . . . . . . . 87 3.11.7 Stage 3 Clarifying: Problem Definition . . . . . . . . . . . . 88 3.11.8 Stage 4 Ideation: Idea Finding . . . . . . . . . . . . . . . . . . . 89 3.11.9 Active Divergence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 3.11.10 Active Convergence . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 3.11.11 Stage 5 Evaluation: Solution Finding. . . . . . . . . . . . . . 91 3.11.12 Stage 6 Optimisation: Planning . . . . . . . . . . . . . . . . . . 93 3.11.13 Stage 7 Enabling Action: Acceptance Winning . . . . . . 93 3.11.14 Stage 8 Enabling Action: Implementing . . . . . . . . . . . 93 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 4 Entrepreneurship and Innovation in Large Firms . . . . . . . . . . . . . . . 95 4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.2 The Entrepreneurial Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 4.3 Large Corporations as Successful Innovators . . . . . . . . . . . . . . . 98 4.4 A Model of Corporate Intrapreneuring . . . . . . . . . . . . . . . . . . . . 99 4.5 Challenges for Senior Management . . . . . . . . . . . . . . . . . . . . . . . 101 4.6 Failure Tolerant Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 4.7 Unleashing the Intrapreneurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 4.8 Ten Principles of Intrapreneuring . . . . . . . . . . . . . . . . . . . . . . . . . 102 4.9 The Process of Internal Corporate Venturing . . . . . . . . . . . . . . . . 103 4.9.1 Vicious Circles in the Definition Process . . . . . . . . . . . 103 4.9.2 Managerial Dilemmas in Impetus Process . . . . . . . . . . 104 4.9.3 Indeterminateness of Strategic Context of ICV Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 4.9.4 Perverse Selective Pressures Exerted by Structural Context on ICV Development . . . . . . . . . . . . . . . . . . . 104 4.10 Advice for Intrapreneurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 4.11 Developing HR Frameworks for Intrapreneuring . . . . . . . . . . . . 106 4.12 Creating the Innovative Organisation . . . . . . . . . . . . . . . . . . . . . . 108 4.12.1 Market Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 4.12.2 Innovative Leadership . . . . . . . . . . . . . . . . . . . . . . . . . 109 4.12.3 Non-linear Strategic Planning . . . . . . . . . . . . . . . . . . . 110 4.12.4 Ambidextrous Structure . . . . . . . . . . . . . . . . . . . . . . . . 111 4.12.5 Innovation Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 4.13 Balancing Culture and Structure . . . . . . . . . . . . . . . . . . . . . . . . . 113 4.14 Open Innovation and Absorptive Capacity. . . . . . . . . . . . . . . . . . 115 4.14.1 Open Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 4.14.2 Absorptive Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 4.14.3 Managing Open Innovation . . . . . . . . . . . . . . . . . . . . . 118 4.15 Innovation in Public Sector Organisations . . . . . . . . . . . . . . . . . . 119 4.15.1 Key Challenges Facing Public and Non-profit Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 4.15.2 The Role Orientations of Public Agencies . . . . . . . . . . 120 Contents viii 4.15.3 Fostering Innovation in Public Organisations . . . . . . . 121 4.15.4 Measuring Innovation in Public Organisations . . . . . . 123 4.15.5 Lessons from Innovation Within Public Organisations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 5 Innovation in Small Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 5.2 Definition of Small Firms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 5.3 Characteristics of Small Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 5.4 The “Myth” of Innovation in Small Firms . . . . . . . . . . . . . . . . . . . 135 5.5 Advantages and Disadvantages of Small Firms . . . . . . . . . . . . . . . 137 5.6 SMEs vs. Large Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 5.7 Less Formality in Small Firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 5.8 The Entrepreneur and the Owner-Manager . . . . . . . . . . . . . . . . . . 139 5.9 Theories of Small Business Management . . . . . . . . . . . . . . . . . . . 141 5.10 Causes of Small Business Failure and Success . . . . . . . . . . . . . . . 144 5.11 The Growth Cycle of Small Firms . . . . . . . . . . . . . . . . . . . . . . . . . 146 5.12 What Strategic Options Do Small Firms Have? . . . . . . . . . . . . . . . 148 5.13 The Importance of Strategic Thinking . . . . . . . . . . . . . . . . . . . . . . 150 5.13.1 Entrepreneurship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 5.13.2 Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 5.13.3 Strategic Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 5.13.4 The Growth Vector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 5.13.5 The Strategic Triangle . . . . . . . . . . . . . . . . . . . . . . . . . . 159 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 6 Adoption and Diffusion of Innovation . . . . . . . . . . . . . . . . . . . . . . . . . 165 6.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 6.2 Three Innovation Paradigms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166 6.3 Generation and Diffusion of Innovation . . . . . . . . . . . . . . . . . . . 168 6.4 Theories of Diffusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 6.5 Why Innovations Diffuse into Markets . . . . . . . . . . . . . . . . . . . . 174 6.5.1 Relative Advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 6.5.2 Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 6.5.3 Compatibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 6.5.4 Trial-Ability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 6.5.5 Observability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 6.5.6 Usefulness and Ease of Use . . . . . . . . . . . . . . . . . . . . . 175 6.5.7 Subjective Influences . . . . . . . . . . . . . . . . . . . . . . . . . . 175 6.6 The Critical Mass of Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 6.7 Diffusion of Innovation in Historical Context . . . . . . . . . . . . . . . 177 6.8 Diffusion Adoption Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 6.8.1 Venturesome Innovators . . . . . . . . . . . . . . . . . . . . . . . . 179 6.8.2 Respectable Early Adopters . . . . . . . . . . . . . . . . . . . . . 179 6.8.3 The Deliberate Early Majority . . . . . . . . . . . . . . . . . . . 180 Contents ix 6.8.4 The Sceptical Late Majority . . . . . . . . . . . . . . . . . . . . . 180 6.8.5 Traditional Laggards . . . . . . . . . . . . . . . . . . . . . . . . . . 180 6.9 The Innovation Decision Process . . . . . . . . . . . . . . . . . . . . . . . . . 180 6.10 Innovation Adoption in Organisations . . . . . . . . . . . . . . . . . . . . . 181 6.10.1 Managerial Intervention . . . . . . . . . . . . . . . . . . . . . . . . 181 6.10.2 Subjective Norms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 6.10.3 Facilitating Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 182 6.10.4 Secondary (Individual) Adoption Process . . . . . . . . . . 182 6.10.5 Assimilation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 6.10.6 Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 6.11 Rogers Innovation Adoption Model . . . . . . . . . . . . . . . . . . . . . . . 183 6.12 Innovation Diffusion as a Social Process . . . . . . . . . . . . . . . . . . . 184 6.12.1 Characteristics of the Innovation . . . . . . . . . . . . . . . . . 185 6.12.2 Characteristics of the Innovator . . . . . . . . . . . . . . . . . . 185 6.12.3 Environmental Context in Which the Diffusion Is to Occur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 6.12.4 The Role of Word-of-Mouth Communication . . . . . . . 186 6.13 The Failure of Innovation Diffusion. . . . . . . . . . . . . . . . . . . . . . . 186 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 7 Planning, Business Models and Strategy . . . . . . . . . . . . . . . . . . . . . . . 191 7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 7.2 The Value of the Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 192 7.3 Do Business Plans Really Matter? . . . . . . . . . . . . . . . . . . . . . . . . 192 7.4 What Is Business Planning? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 7.5 Types of Business Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 7.6 Writing a Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 7.7 Designing the Business Model . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 7.8 The ‘Business Model Canvas’ for Business Model Design . . . . . 200 7.8.1 Customer Segments and Market Segmentation . . . . . . 201 7.8.2 The Customer Value Proposition (CVP) . . . . . . . . . . . 203 7.8.3 Customer Relationships . . . . . . . . . . . . . . . . . . . . . . . . 204 7.8.4 Channels – Your Go to Market Mechanism . . . . . . . . . 205 7.8.5 Revenue Stream – Capturing Value . . . . . . . . . . . . . . . 205 7.8.6 Key Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 7.8.7 Key Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 7.8.8 Strategic Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 7.9 The Role of Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 7.9.1 A Vision to Align and Motivate . . . . . . . . . . . . . . . . . . 211 7.9.2 Don’t Confuse Planning for Clear Vision . . . . . . . . . . 212 7.10 How Entrepreneurs Craft Strategy . . . . . . . . . . . . . . . . . . . . . . . . 213 7.11 Developing Entrepreneurial Strategy . . . . . . . . . . . . . . . . . . . . . . 214 7.12 The Strategy Development Framework . . . . . . . . . . . . . . . . . . . . 215 7.12.1 TOWS Matrix Analysis . . . . . . . . . . . . . . . . . . . . . . . . 216 7.12.2 Assessing Competitive Threats . . . . . . . . . . . . . . . . . . 216 7.12.3 Assessing Market Opportunities . . . . . . . . . . . . . . . . . 216 Contents x 7.12.4 Assessing Resource Weaknesses . . . . . . . . . . . . . . . . . 217 7.12.5 Assessing Resource Strengths . . . . . . . . . . . . . . . . . . . 217 7.12.6 Dynamic Capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 218 7.13 Strategic Planning Responses . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 7.13.1 The Shopkeeper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 7.13.2 The Salesman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 7.13.3 The Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 7.13.4 The CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 7.14 Use Your Common Sense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 8 Risk Management in Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 8.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 8.2 Risk Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 8.3 Risk Management in Entrepreneurial Ventures . . . . . . . . . . . . . . 228 8.3.1 Proximity Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 8.3.2 Informality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 8.3.3 Resource Scarcity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 8.4 Planning and Entrepreneurial Risk Perception . . . . . . . . . . . . . . 230 8.4.1 The Notion of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 8.4.2 Entrepreneurial Risk Perception . . . . . . . . . . . . . . . . . 231 8.4.3 The Impact on Planning Behaviour . . . . . . . . . . . . . . . 232 8.5 Plan or Just Storm the Castle? . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 8.6 Absorptive Capacity and the Management of Risk . . . . . . . . . . . 236 8.7 Commercialisation and the Systematic Management of Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 8.7.1 Fuzzy Front-End. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239 8.7.2 New Concept Development . . . . . . . . . . . . . . . . . . . . . 240 8.8 Assessing the Technical and Market Risk . . . . . . . . . . . . . . . . . . 241 8.9 Managing Risk, General Principles and Techniques . . . . . . . . . . 242 8.9.1 Technology Project Risk Model . . . . . . . . . . . . . . . . . . 243 8.9.2 Quantifying Risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244 8.9.3 Failure Mode and Effects Analysis (FMEA) . . . . . . . . 244 8.9.4 Anchored Scales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 8.10 Portfolio Management Approach . . . . . . . . . . . . . . . . . . . . . . . . . 248 8.10.1 Value Maximisation . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 8.10.2 Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 8.10.3 Strategic Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 8.10.4 Right Number of Projects. . . . . . . . . . . . . . . . . . . . . . . 249 8.11 Real Options Reasoning and Decision Tree Analysis . . . . . . . . . 250 8.11.1 The First Chicago Method . . . . . . . . . . . . . . . . . . . . . . 250 8.11.2 Decision Tree Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 251 Contents xi 8.12 Assessing the Risk-Return for an Innovation: Innovation Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 8.12.1 The Theory of Innovation Rents . . . . . . . . . . . . . . . . . 253 8.12.2 Typology of Innovation Rents . . . . . . . . . . . . . . . . . . . 254 8.12.3 The RENT Configuration and Planning . . . . . . . . . . . . 257 8.13 The Risk-Return of Commercialisation Pathways . . . . . . . . . . . . 258 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260 9 Disruptive Innovation and the Commercialisation of Technology . . . 265 9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 9.2 Innovation as a Key Economic Driver . . . . . . . . . . . . . . . . . . . . . 265 9.2.1 Patents, Trademarks and Productivity . . . . . . . . . . . . . 268 9.2.2 Global Collaboration Is Critical . . . . . . . . . . . . . . . . . . 269 9.3 Defining Technological Innovation . . . . . . . . . . . . . . . . . . . . . . . 271 9.4 Evolution of Strategic Technology Management . . . . . . . . . . . . . 271 9.5 The Impact of the Fourth Industrial Revolution . . . . . . . . . . . . . . 273 9.6 The Strategic Management of Technology . . . . . . . . . . . . . . . . . 274 9.7 Commercialisation of Disruptive Technologies . . . . . . . . . . . . . . 276 9.7.1 Consider the Readiness of the Market . . . . . . . . . . . . . 277 9.7.2 Consider the End User . . . . . . . . . . . . . . . . . . . . . . . . . 277 9.7.3 Beware Existing Market Players . . . . . . . . . . . . . . . . . 278 9.7.4 Look for Market Gaps . . . . . . . . . . . . . . . . . . . . . . . . . 278 9.8 Steps to Developing Disruptive Technologies . . . . . . . . . . . . . . . 279 9.9 How NTT DoCoMo Created Japan’s G3 Network . . . . . . . . . . . 281 9.10 Strategies for Disruptive Technologies . . . . . . . . . . . . . . . . . . . . 283 9.11 Market Adoption of Technological Innovation . . . . . . . . . . . . . . 284 9.12 Creating New Market Space . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286 9.12.1 Blue Ocean Versus Red Ocean Strategy . . . . . . . . . . . . 286 9.12.2 Value Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287 9.12.3 Creating New Market Space . . . . . . . . . . . . . . . . . . . . 288 9.13 New Product Development and Commercialisation . . . . . . . . . . 290 9.14 The Stage-Gate® Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292 9.14.1 Spiral Development Via Stages and Gates . . . . . . . . . . 293 9.14.2 Criticism of Stage-Gate® . . . . . . . . . . . . . . . . . . . . . . . 295 9.15 The Lean Start-Up Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 9.15.1 Principles of Lean Start-Up . . . . . . . . . . . . . . . . . . . . . 297 9.15.2 The Lean Start-Up Framework . . . . . . . . . . . . . . . . . . 298 9.16 Best Practice in NPD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299 9.17 The Innovation Diamond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 9.18 Commercialisation Pathways for Disruptive Innovation . . . . . . . 302 9.18.1 Commercialisation Pathways and Innovation Rent Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 Contents xii 10 Screening Opportunities and Assessing Markets . . . . . . . . . . . . . . . . . 311 10.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 10.2 Causes of Innovation Failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312 10.2.1 Neglected Strategy and Market Assessment . . . . . . . . 312 10.2.2 Neglected Execution and Product-Technology Road Mapping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313 10.2.3 Not Recognising What It Takes to Succeed . . . . . . . . . 314 10.3 The Customer Development Process . . . . . . . . . . . . . . . . . . . . . . 315 10.3.1 Customer Discovery . . . . . . . . . . . . . . . . . . . . . . . . . . . 316 10.3.2 Customer Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 10.3.3 Developing Customer Archetypes and the Customer Analysis Process . . . . . . . . . . . . . . . . . . . . . 320 10.4 Customer Value Proposition and Erosion Effects . . . . . . . . . . . . 322 10.4.1 NPD and CVP Analysis . . . . . . . . . . . . . . . . . . . . . . . . 322 10.4.2 CVP and …