Innovation and Invention →
- 09 Sep 2010
- Working Paper Summaries
Boundary Spanning in a For-Profit Research Lab: An Exploration of the Interface Between Commerce and Academe
In science-based industries, innovation requires bridging the boundary between universities and companies. As entrepreneurial faculty venture into the world of commerce by building relationships and reputations in industry, company researchers and dealmakers seek access to the distributed knowledge base that resides within the community of scholars. But what happens within organizations when scientists venture deeply into the world of academe? In this look at one influential life sciences company, Christopher C. Liu of the Rotman School of Management and Toby E. Stuart of Harvard Business School find important connections between publishing, the allocation of rewards within the company, and the structure of the communication network inside and beyond the borders of the organization. Key concepts include: Researchers who publish successfully were rewarded by the company with an increased bonus. These publishers not only received more remuneration, they also attracted more of their managers' attention than did non-publishers. Publishers had significantly more correspondents in universities than do non-publishers. E-mail data provide direct evidence that publishing correlated with a company's access to the informal networks of the broader scientific community. However, publishers made a potentially negative tradeoff: As they spanned boundaries with the academic community, their importance in their company's communication network was weakened. Employees who are the best networked beyond the firm's boundaries should be precisely those people who would ideally occupy central positions within the firm. Yet in the study, these same individuals seemed to shift the locus of their interaction toward communities away from the firm. Closed for comment; 0 Comments.
- 25 Aug 2010
- Working Paper Summaries
Managerial Practices That Promote Voice and Taking Charge among Frontline Workers
How can front-line workers be encouraged to speak up when they know how to improve an organization's operation processes? This question is particularly urgent in the US health- care industry, where problems occur often and consequences range from minor inconveniences to serious patient harm. In this paper, HBS doctoral student Julia Adler-Milstein, Harvard School of Public Health professor Sara Singer, and HBS professor Michael W. Toffel examine the effectiveness of organizational information campaigns and managerial role modeling in encouraging hospital staff to speak up when they encounter operational problems and, when speaking up, to propose solutions to hospital management. The researchers find that both mechanisms can lead employees to report problems and propose solutions, and that information campaigns are particularly effective in departments whose managers are less engaged in problem solving. Key concepts include: Front-line workers offer more solutions to operational problems in departments whose managers are more engaged in problem solving. Information campaigns that promote process improvement generate more solutions from front-line workers, especially from workers whose managers are less routinely engaged in problem solving. Efforts at the organizational level can compensate for managers who cannot or do not create an environment that inspires front-line workers to speak up. Closed for comment; 0 Comments.
- 04 Aug 2010
- Working Paper Summaries
The Effect of Market Leadership in Business Process Innovation: The Case(s) of E-Business Adoption
The connection between market leadership and the adoption of new technologies is central to understanding how firms maintain or gain competitive advantage over time. One key determinant of firm openness to either product or process innovation is how radical or incremental a particular change is for the organization. Using the context of IT-enabled business processes for e-buying and e-selling, a setting that offers a complementary view to studies that have focused on R&D expenditure and patents as measures of innovation, HBS professor Kristina McElheran sheds light on whether, when, and why market leaders might be more likely to adopt new innovations. This study represents the first robust, multi-industry evidence that market leaders are far more likely to adopt incremental rather than radical business process innovations. Key concepts include: Extensive survey data for 1999 show that e-buying constituted a relatively incremental process innovation, while e-selling was far more radical. Market leaders were more likely than laggards to adopt incremental business process innovations. External market factors and internal characteristics reinforced each other to make adoption relatively more beneficial and/or easier for the largest, most successful firms. Market leaders were less likely than laggards to adopt radical business process innovations. For the complex, strategically sensitive activity of e-selling, market leaders faced disproportionate risks and adjustment costs, making adoption less attractive for firms with the largest market shares. The combination of complexity, strategic sensitivity, and boundary-spanning created the particular challenge observed for market leaders in the case of e-selling and potentially other business process innovations. Inter-firm coordination is an important strategic consideration as businesses grow ever more dependent on the performance of their extended value chain for success. Lagging firms may discover new opportunities to leapfrog their larger competitors using certain business-to-business process innovations and IT-enabled supply chain relationships. Closed for comment; 0 Comments.
- 22 Jul 2010
- Working Paper Summaries
Business Model Innovation and Competitive Imitation
When and why should an entrant adopt a new business model when the innovation could be imitated by an incumbent? In this paper, HBS professor Ramon Casadesus-Masanell and University of Southern California professor Feng Zhu examine the desirability, or lack thereof, of business model innovations when they cannot be protected, opening the door to competitive imitation. Issues of competing through new business model design become more important given the increasing number of opportunities for business model configurations enabled by technological progress, new customer preferences, and deregulation. Key concepts include: New entrants in a wide array of industries (such as Ryanair in the airline industry and IKEA in furniture) demonstrate that innovative business models can provide the basis for sustainable business success, even in industries with strong and well-established incumbents. Firms should take into account the likely competitive effects and responses before revealing a business model innovation. Just as product and process innovations are hard to protect, business model innovations can be imitated. For many years to come, firms in all kinds of industries will continue to surprise with unprecedented new ways of capturing value through sponsor-based business model innovation. Closed for comment; 0 Comments.
- 28 Jun 2010
- HBS Case
Cincinnati Children’s Hospital Medical Center
A recent Harvard Business School case by HBS professors Amy C. Edmondson and Anita Tucker explores how one hospital implemented its own version of health-care reform, taking overall performance levels from below average to the top 10 percent in the industry. From the HBS Alumni Bulletin. Key concepts include: The case offers valuable takeaways for future managers of any complex service organization. A key takeaway for students is the power of transparency as a mechanism for change. Benchmarking themselves to an internal standard helped the group get beyond rationalizing poor performance as an unavoidable consequence of the complexity of patient care. Closed for comment; 0 Comments.
- 03 May 2010
- Research & Ideas
What Is the Future of MBA Education?
Why get an MBA degree? Transformations in business and society make this question increasingly urgent for executives, business school deans, students, faculty, and the public. In a new book, Rethinking the MBA: Business Education at a Crossroads, Harvard Business School's Srikant M. Datar, David A. Garvin, and Patrick G. Cullen suggest opportunities for innovation. Q&A with Datar and Garvin plus book excerpt. Key concepts include: Executives and business school deans raised multiple concerns about the MBA landscape when the authors interviewed them for an HBS Centennial colloquium in 2008 on the future of MBA education. The challenges: Stakeholders question the value-added of MBA degrees. And MBAs lack sufficient leadership development, a "global mindset," and skill in navigating organizational realities. Rethinking the MBA examines each challenge in turn, and provides six case studies of schools that demonstrate flexibility and innovation in MBA education. Closed for comment; 0 Comments.
- 05 Apr 2010
- Research & Ideas
HBS Cases: iPads, Kindles, and the Close of a Chapter in Book Publishing
Book publishing is changing before our very eyes, even if the industry itself is fighting the transition with every comma it can muster. Harvard Business School professor Peter Olson, former CEO of Random House, wonders if books themselves may be in jeopardy. Key concepts include: The traditional book publishing and distribution system is under pressure to change to digital e-books. Publishers should consider a strategy of cooperation rather than competition with online retailers. Adding video and other multimedia capabilities will make e-books more attractive in the textbook industry. The fundamental question to be asked in the Internet age is, how popular will books remain? Closed for comment; 0 Comments.
- 31 Mar 2010
- Working Paper Summaries
When Open Architecture Beats Closed: The Entrepreneurial Use of Architectural Knowledge
Entrepreneurial firms rich in knowledge but poor in other resources can use superior architectural knowledge of a technical system to gain strategic advantage over larger and better endowed rivals. This paper presents a model and provides examples showing that architectural knowledge can be applied strategically to change a firm's scope and boundaries, make innovations more or less autonomous, and change the span of problems it must solve. Key concepts include: Architectural knowledge is knowledge about the components of a complex system and how they are related. Architectural knowledge includes knowledge about how the system performs its functions; how the components are linked together; and the behavior of the system, both planned and unplanned, in different environments. For a small entrepreneurial firm with limited financial resources facing larger rivals, the most valuable architectural knowledge pertains to bottlenecks and remodularizations that isolate the bottlenecks. Such knowledge can form the basis of a small footprint technical architecture that delivers an ROIC (higher return on invested capital) advantage. Technical systems that are susceptible to remodularization around bottlenecks are strategic targets of opportunity for entrepreneurial firms. Incumbents risk being displaced by smaller rivals with superior architectural knowledge leading to an ROIC advantage. Closed for comment; 0 Comments.
- 22 Mar 2010
- Research & Ideas
One Strategy: Aligning Planning and Execution
Strategy as it is written up in the corporate playbook often becomes lost or muddled when the team takes the field to execute. In their new book, Professor Marco Iansiti and Microsoft's Steven Sinofsky discuss a "One Strategy" approach to aligning plan and action. Key concepts include: The book combines practical experience at Microsoft with conceptual frameworks on how to develop strategies that are aligned with execution in a rapidly changing competitive environment. "Strategic integrity" occurs when the strategy executes with the full, aligned backing of the organization for maximum impact. The chief impediment to strategy execution is inertia. The One Strategy approach is less about formal reviews and more about one-on-one conversation. Blogs can be a powerful asset in managing an organization. Closed for comment; 0 Comments.
- 04 Mar 2010
- Working Paper Summaries
The Determinants of Individual Performance and Collective Value in Private-Collective Software Innovation
Why do people expend personal time and effort toward creating a public good? Over the past decade, collaborative, community-based approaches to developing knowledge-intensive products like encyclopediae, music, and software have gained prominence in both practice and scholarly analysis. "Open source software development," for example, is distinguished by self-selection of distributed participants into tasks, free revealing of knowledge, collective creation of shared software artifacts, and participants' ability to generate new innovations by reinterpreting and repurposing knowledge and artifacts created by others. The MathWorks' Ned Gulley and HBS professor Karim R. Lakhani study the determinants of individual performance and collective value in software innovation by analyzing 11 programming competitions that mimic the working of the open source software community. Key concepts include: Knowledge creation and reuse are important dual goals of social systems organized to collectively solve technical problems. Collective value relies on the ability of others to understand and comprehend the design structure of knowledge to enable reuse. Thus deviations from commonly understood rules of practice, while beneficial to the individual innovator, impede adoption by others. Although free riding is a concern in most collective systems, innovators need to realize that the value of the reuse of their work by others depends as much on the new knowledge they create as on the old knowledge they borrow. Closed for comment; 0 Comments.
- 24 Feb 2010
- Working Paper Summaries
Accelerating Innovation In Energy: Insights from Multiple Sectors
How should the energy sector best respond to the threat of climate change? In this introductory chapter to a forthcoming book, Harvard Business School's Rebecca M. Henderson and Richard G. Newell of Duke University frame the discussion by highlighting the volume's contributions concerning four particularly innovative sectors of the U.S. economy: agriculture, chemicals, life sciences, and information technology. These four sectors have been extraordinarily important in driving recent economic growth. Henderson and Newell describe why accelerating innovation in energy could play an important role in shaping an effective response to climate change. Key concepts include: An effective innovation system has three key elements: accelerating demand for new technology; institutions that support abundant generation and dissemination of fundamental scientific and technical knowledge; and a vibrant, competitive private sector. Public policy has played a role in building and/or sustaining all three elements. If the goal of federal policy is to encourage effective technological solutions to mitigate climate change, then a short-term commitment is unlikely to meet expectations, even if the commitment is extraordinarily intense, such as was seen with the Department of Defense's Manhattan Project. If federal agencies increase investment in energy innovation at the same time that vigorous efforts are made to enhance the demand for carbon-free technology, it is likely that technological innovation could play a decisive role in mitigating some of the key economic and social risks arising from climate change. Closed for comment; 0 Comments.
- 19 Feb 2010
- Working Paper Summaries
The Evolution of Science-Based Business: Innovating How We Innovate
Science has long been connected to innovation and thus to the business enterprise. However, the nature of the connection between science and business in recent decades has begun to change in important ways. On the one hand, we have witnessed the decline of corporate industrial laboratories. At the same time, we have seen the emergence of a new class of entrepreneurial firms that are deeply immersed in science in sectors like biotech, nanotech, and more recently energy. HBS professor Gary P. Pisano examines the changing nature of the science-business intersection and describes the emergence of a science-based business as a novel organizational form. He also describes the institutional and organizational challenges created by this convergence. Key concepts include: Science-based businesses face unique challenges as they straddle two worlds with very different time horizons, risks, expectations, and norms. The professions of management and of science are still largely separate: Scientists receive no formal training in management, and MBAs receive no training in science. This is a striking gap. Today the "invisible hand" of markets increasingly governs science-based businesses. Assessing this form of governance against the requirements of science-based businesses suggests the need for organizational innovation. Closed for comment; 0 Comments.
- 11 Jan 2010
- Research & Ideas
Mixing Open Source and Proprietary Software Strategies
Open source and proprietary software development used to be competing strategies. Now software firms are experimenting with strategies that mix the two models. Researcher Gaston Llanes discusses recent research into these "mixed source" strategies. Key concepts include: Software companies are taking a "best of both worlds" approach by creating products that use a combination of OS and proprietary software code. The researchers wanted to get a clearer sense of when a profit-maximizing firm should adopt a mixed-source business model and what that model might look like under different circumstances. Results indicate recurring patterns and strategies that managers can take into consideration when setting strategy. Closed for comment; 0 Comments.
- 14 Dec 2009
- Research & Ideas
Can Entrepreneurs Drive People Movers to Success?
Call them next-generation driverless taxis or people movers, the age of personal rapid transport is just around the bend. Could PRT change the face of public transportation in cities and smaller communities? HBS professor Benjamin G. Edelman weighs the benefits and opportunities for entrepreneurs and for society. "Right now, the field is wide open," he says. Key concepts include: A typical PRT vehicle carries one to four passengers along a dedicated track. It travels direct routes—no stops along the way—using computer control. Although it sounds futuristic, the PRT concept has been discussed seriously by engineers, designers, and academics since the mid-1950s. A PRT system has been in use since 1972 at the University of West Virginia in Morgantown. An installation at London's Heathrow Airport is slated to open in 2010. Yet general skepticism remains prevalent. PRT could reduce traffic congestion by offering a strong alternative to the private automobile. Other opportunities include establishing PRT systems on corporate or educational campuses, ultimately reducing costly and intrusive parking garages. PRT systems could also improve the value of real estate on land that is not close enough to other public transportation or services. Closed for comment; 0 Comments.
- 07 Dec 2009
- Research & Ideas
Government’s Positive Role in Kick-Starting Entrepreneurship
The U.S. government has spent billions of dollars bailing out troubled companies. Is it time for Uncle Sam to invest in new entrepreneurial firms as well? Professor Josh Lerner makes the case for limited government involvement in his book Boulevard of Broken Dreams. Closed for comment; 0 Comments.
- 01 Dec 2009
- Working Paper Summaries
Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation
We are in the midst of a major paradigm shift: technological trends are causing a change in the way innovation gets done in advanced market economies. In addition to the model of producer-based design—the idea that most important designs for innovations would originate from producers and be supplied to consumers via goods and services that were for sale—two increasingly important models are innovations by single user firms or individuals, and open collaborative innovation projects. Each of these three models represents a different way to organize human effort and investments aimed at generating valuable new innovations. HBS professor Carliss Y. Baldwin and MIT Sloan School of Management professor Eric von Hippel analyze the three models in terms of their technological properties, specifically their design costs and architectures, and their communication requirements. The researchers argue that as design and communication costs decline, single user and open collaborative innovation models will be viable for a steadily wider range of design. These two models will present an increasing challenge to the traditional paradigm of producer-based design—but, when open, they are good for social welfare and should be encouraged by policymakers. Key concepts include: When it is technologically feasible, the transition from closed producer innovation or single user innovation to open single user or open collaborative innovation is desirable in terms of social welfare and is worthy of support by policymakers. Free dissemination of innovation designs is associated with the open model. Open innovation generates innovation without exclusivity or monopoly, and so should improve social welfare, other things being equal. Intellectual property rights grants can be used as the basis for licenses that help keep innovation open as well as closed. Policymakers should seek out and eliminate points of conflict between present intellectual property policies designed to support closed innovation that at the same time inadvertently interfere with open innovation. As design costs fall, many more innovations will originate with single users. Open collaborative innovation projects thrive on low communication costs. Closed for comment; 0 Comments.
- 30 Sep 2009
- Working Paper Summaries
Breakthrough Inventions and Migrating Clusters of Innovation
In just a short period of time the spatial location of invention can shift substantially. The San Francisco Bay Area grew from 5 percent of U.S. domestic patents in 1975-1984 to over 12 percent in 1995-2004, for example, while the share for New York City declined from 12 percent to 7 percent. Smaller cities like Austin, Texas, and Boise, Idaho, seem to have become clusters of innovation overnight. Despite the prevalence of these movements, we know very little about what drives spatial adjustments in U.S. invention, the speed at which these reallocations occur, and their economic consequences. In this paper, HBS professor William R. Kerr investigates whether breakthrough inventions draw subsequent research efforts for a technology to a local area. Evidence strongly supports the conclusion that centers of breakthrough innovations experience subsequent growth in innovation relative to their peer locations. Key concepts include: Breakthrough inventions spur higher subsequent growth in innovation within a local area and technology compared to peer locations that, for example, have the same overall numbers of patents and similar technologies at the time when the breakthrough occurred. The underlying mobility of the workforce is quite important for the speed at which spatial adjustments occur. Immigrants, and particularly new immigration to the United States, can facilitate faster spatial reallocation. Closed for comment; 0 Comments.
- 14 Sep 2009
- Research & Ideas
Understanding Users of Social Networks
Many business leaders are mystified about how to reach potential customers on social networks such as Facebook. Professor Mikolaj Jan Piskorski provides a fresh look into the interpersonal dynamics of these sites and offers guidance for approaching these tantalizing markets. Closed for comment; 0 Comments.
- 17 Aug 2009
- Research & Ideas
Quantifying the Economic Impact of the Internet
Businesses around the advertising-supported Internet have incredible multiplier effects throughout the economy and society. Professor John Quelch starts to put some numbers on the impact. Open for comment; 0 Comments.
When Does a Platform Create Value by Limiting Choice?
Platforms such as video games and smartphones need to attract users, and the best way to do so is to offer more and more applications. Is there ever a point where a platform should limit the variety available? Researchers Ramon Casadesus-Masanell and Hanna Halaburda observe that in many situations users enjoy consuming applications together. When such consumption complementarities are present, users may benefit if the platform limits choice. With fewer applications to choose from, it is easier for users to take full advantage from shared consumption. Key concepts include: Platforms have traditionally encouraged user adoption by providing as many applications as possible. This works because users value having more choices. When users prefer both using many applications and using the same applications as other users (multiplayer video games, for example), they face a trade-off. As it turns out, there is the tendency to use too many applications, a situation similar to a Prisoners' Dilemma: everybody would be better off consuming fewer applications but each user individually has the desire to consume more. By limiting the number of applications, the platform prevents users from consuming too many applications. If there are many applications to choose from, it is less likely that users will purchase the same set. In this case, limiting the number of applications helps the users coordinate on the same set. To limit choice, the platform has a variety of direct and indirect alternatives including imposition of high prices for developers to access the platform or directly restricting the number of applications available. The insight to practitioners is that maximizing the number of applications available is not always the best strategy for platforms. Instead, actively managing the number of applications may result in substantial value creation, which could be captured though access fees. Closed for comment; 0 Comments.