Innovation and Management →
- 29 Oct 2014
- Research & Ideas
Inventing Products is Less Valuable Than Inventing Ideas
When companies create new products, they are often also inventing new ideas—and that's where the real value resides. Gautam Ahuja discusses why companies fall short in fully exploiting their intellectual capital. Open for comment; 0 Comments.
- 29 Aug 2014
- Working Paper Summaries
Patent Trolls
Clearly defined property rights are essential for well-functioning markets. In the case of intellectual property (IP), however, property rights are complex to define; unlike ownership of physical assets, the space of ideas is difficult to clearly delineate. A solution employed by the United States and many other countries is the patent-a property right allowing an idea's owner sole commercialization rights for a period of time. A new organizational form, the non-practicing entity (NPE), has recently emerged as a major driver of IP litigation. NPEs amass patents not for the sake of producing commercial products, but in order to prosecute infringement on their patent portfolios. In this paper the authors provide the first large-sample evidence on the litigation behavior of NPEs. They show precisely which corporations NPEs target, when NPEs litigate, and how NPE litigation impacts the innovative activity of targeted firms. NPEs behave, on average, as patent trolls. This means that NPEs target firms that are flush with cash or that have just had positive cash shocks. NPEs even target conglomerate firms that earn their cash from segments having nothing to do with their allegedly infringing patents. The stakes of how to organize intellectual property disputes are massive. If the United States becomes a less desirable place to innovate because NPEs are left unchecked, innovation and human capital, and the returns to that innovation and human capital, will likely flee overseas. But innovators will also leave if they feel they are not are protected from large, well-funded interests that might infringe on innovative capital without recourse. Key concepts include: The rise of non-practicing entities (NPEs) has sparked a debate regarding their value and their impact on innovation. This study provides evidence that NPEs do not protect innovators from large interests in the intellectual property space. On average, NPEs behave as patent trolls that chase cash and negatively impact future innovation. Policy should be to more carefully limit the power of NPEs or, in the framework of the authors' model, increase the cost of bringing suit against commercializers of innovative ideas. Closed for comment; 0 Comments.
- 13 Aug 2014
- Lessons from the Classroom
Managing the Family Business: Entrepreneurs Needed for Long-Run Success
Families that want to stay in business for generations don't have a choice but to encourage entrepreneurship in and out of their family company, say Michael Roberts and John Davis. Here's how. Open for comment; 0 Comments.
- 31 Jul 2014
- Research & Ideas
A Scholarly Crowd Explores Crowdsourcing
At the Open and User Innovation Workshop, several hundred researchers discussed their work on innovation contests, user-led product improvements, and the biases of crowds. Closed for comment; 0 Comments.
- 23 Jul 2014
- Lessons from the Classroom
Innovation Is Magic. Really
When Stefan Thomke teaches students how to manage innovation and creativity, he turns to an unexpected source: Magician Jason Randal. Open for comment; 0 Comments.
- 18 Jun 2014
- Research & Ideas
Leading Innovation is the Art of Creating ‘Collective Genius’
As Linda Hill sees it, innovation requires its own brand of leadership. The coauthor of the new book Collective Genius discusses what's been learned from 16 of the best business innovators. Open for comment; 0 Comments.
- 11 Mar 2014
- Working Paper Summaries
Return Migration and Geography of Innovation in MNEs: A Natural Experiment of On-the-Job Learning of Knowledge Production by Local Workers Reporting to Return Migrants
Since the mid-1990s, a large number of multinational enterprises (MNEs) have set up research and development centers in China, India, and other emerging markets. Such MNEs face constraints in expanding their "geography of innovation" —that of producing and transferring knowledge across borders—because for the MNE knowledge is likely to be localized within larger, more established centers of knowledge production. How do MNEs in emerging markets circumvent this constraint? In this paper, the author uses personnel data from a Fortune 50 technology firm and studies the role of return migrants in facilitating patenting at the emerging market R&D center. The author also studies on-the-job learning of knowledge production by local employees who report to return migrants at an emerging-market R&D setting. The findings generate insights into the functioning of 'internal labor markets' of multinationals. The results are also important for managers: Given the great many Fortune 500 MNE R&D centers in countries such as China and India, and the large fraction of these centers managed by return migrants, the findings may assist those who set up and manage current and future MNE R&D centers. Key concepts include: This paper, one of the first empirical studies of skilled migration within a multinational enterprise, contributes to understanding return migration and the geography of innovation of MNEs. Return migrants and their direct reports file more patents than other local employees. (The author leverages a natural experiment to test for the latter.) Patents that have return migrants (or their direct reports) as inventors exhibit high patent citation rates, indicating that return migration is related to cross-border knowledge transfer. Local workers who report to return-migrant managers tend to benefit from on-the-job learning that they might not receive otherwise. For example, return migrant managers connect their direct reports with ideas and resources in the US headquarters; they also help their direct reports understand the patenting process at US headquarters. Closed for comment; 0 Comments.
- 04 Mar 2014
- Sharpening Your Skills
Sharpening Your Skills: Managing Innovation
Sharpening Your Skills curates a wide range of Harvard Business School's research and ideas around vital topics in business management. Closed for comment; 0 Comments.
- 04 Feb 2014
- Working Paper Summaries
From Crowds to Collaborators: Initiating Effort and Catalyzing Interactions Among Online Creative Workers
Online "organizations" are becoming a major engine for knowledge development in a variety of domains such as Wikipedia and open source software development. Many online platforms involve collaboration and coordination among members to reach common goals. In this sense, they are collaborative communities. This paper asks: What factors most inspire online teams to begin to collaborate and to do so creatively and effectively? The authors analyze a data set of 260 individuals randomly assigned to 52 teams tasked with developing working solutions to a complex innovation problem over 10 days, with varying cash incentives. Findings showed that although cash incentives stimulated a significant boost of effort per se, cash incentives did not transform the nature of the work process or affect the level of collaboration. In addition, at a basic yet striking level, the likelihood that an individual chooses to participate depended on whether teammates were themselves active. Moreover, communications among teammates led to more communications, and communications among teammates also stimulated greater continuous levels of effort. Overall, the study sheds light on how perspectives on incentives, predominant in economics, and perspectives on social processes and interactions, predominant in research on organizational behavior and teams, can be better understood. Key concepts include: An individual's likelihood of being active in online collaboration increases by about 41 percent with each additional active teammate. Management could provide communications channels to make the efforts of other members more visible. This is important in the design of systems for online work as it helps members to confirm that others are actively contributing. Closed for comment; 0 Comments.
- 16 Jan 2014
- Research & Ideas
Resolving Patent Disputes that Impede Innovation
Technical standards both spur innovation and protect the innovators, but abuses in the intellectual property protection system threaten US competitiveness. Josh Lerner and Jean Tirole discuss remedies. Open for comment; 0 Comments.
- 16 Dec 2013
- HBS Case
D’O: Making a Michelin-Starred Restaurant Affordable
Under the leadership of Chef Davide Oldani, the Italian restaurant D'O balances Michelin-star-level quality with affordable prices. In the following story and video, Professor Gary Pisano explains how Oldani does it. Open for comment; 0 Comments.
- 25 Nov 2013
- Working Paper Summaries
Standard-Essential Patents
Standards play a key role in many industries, including those critical for future growth. Intellectual property (IP) owners vie to have their technologies incorporated into standards, so as to collect royalty revenues (if their patents dominate some of the functionalities embodied in the standard) or just to develop a competitive edge through their familiarity with the technology. However, it is hard to know in advance whether patents are complements or substitutes, i.e., how essential they are. Thus a major policy issue in standard setting is that patents that seem relatively unimportant may, by being included into the standard, become standard-essential patents (SEPs). In an attempt to curb the monopoly power that the standard creates, most standard-setting organizations (SSOs) require the owners of patents covered by the standard to grant licenses on fair, reasonable and non-discriminatory (FRAND) terms. Needless to say, such loose price commitments can lead to intense litigation activity. This paper constitutes a first pass at a formal analysis of standard-essential patents. It builds a framework in which essentiality and regulation functions can be analyzed, provides a precise identification of the inefficiencies attached to the lack of price commitment, and suggests a policy reform that restores the ex-ante competition called for in the literature and the policy debate. Key concepts include: Standards transform inessential patents into standard-essential ones. Price discussions within the standard setting process run the risk of expropriation of IP holders, as even balanced SSOs will "blackmail" IP owners to accept low prices in exchange for their functionalities' being selected into the standard. The ability to engage in forum shopping enables IP owners to shun SSOs that force them to charge competitive prices. This suggests imposing mandatory structured price commitments on SSOs. Closed for comment; 0 Comments.
- 25 Nov 2013
- Research & Ideas
Hiding From Managers Can Increase Your Productivity
Harvard Business School Assistant Professor Ethan S. Bernstein explains why decreasing workplace transparency can increase productivity. Open for comment; 0 Comments.
- 05 Sep 2013
- Working Paper Summaries
Performance Responses to Competition Across Skill-Levels in Rank Order Tournaments: Field Evidence and Implications for Tournament Design
Tournaments and other rank-order incentive mechanisms have been used to model a wide range of settings: executive placement, elections, research and development and innovation contests, sports tournaments, and variable sales compensation: situations in which placing at the top of the performance rank-order leads to out-sized payoffs. This article analyzes how the level of competition and size of a tournament affects performance as a result of how strategic interactions affect contestants' incentives to exert high levels of effort. The authors estimate relationships between performance in these contests and competition levels across the full distribution of skill levels. They do this by studying data on software algorithm programming contests in which fine-grained data are available on contestant ability levels and performance over a large number of comparable contests. Findings show that while aggregate and average patterns of performance and effort may decline with increased competition, performance and effort may in fact increase among the highest-skilled contestants. The paper provides guidance to designers of innovation and crowdsourcing tournaments. Key concepts include: Tournaments and contests have a long history as a means of achieving technological advances in a range of industrial settings. For the strongest contestants, adding more contestants can produce effort-inducing rivalry. Increased competition beyond a minimum level may reduce the probability of winning to a level where incentives become depressed. However, the stimulating effect of rivalry may persist at least for highest-skilled contestants. Closed for comment; 0 Comments.
- 01 Jul 2013
- Research & Ideas
Crowdfunding a Poor Investment?
Crowdfunding promises to democratize funding of startups. But is that necessarily a good thing? Entrepreneurial finance experts Josh Lerner, Ramana Nanda, and Michael J. Roberts on the promises and problems with the newest method for funding small businesses. Closed for comment; 0 Comments.
- 29 May 2013
- Research & Ideas
Faculty Symposium Showcases Breadth of Research
Faculty present their latest research on the human tendency toward dishonesty, the use of crowdsourcing to solve major scientific problems, and the impact of private equity investments. Closed for comment; 0 Comments.
- 28 May 2013
- Research & Ideas
Can LEGO Snap Together a Future in Asia?
Using scenario planning, executives at LEGO Group played through a possible strategy shift in Asia. Thanks to a new case study by professor Anette Mikes, students can make their own decisions. Closed for comment; 0 Comments.
- 18 Mar 2013
- HBS Case
HBS Cases: LEGO
LEGO toys have captivated children and their parents for 80 years. But managing the enterprise has not always been fun and games. Professor Stefan H. Thomke explains the lessons behind a new case on the company. Closed for comment; 0 Comments.
- 04 Mar 2013
- Working Paper Summaries
The Dirty Laundry of Employee Award Programs: Evidence from the Field
Many scholars and practitioners in human resource management have recently argued that awards and other forms of on-the-job recognition provide a "free" way to motivate employees. But are there unintended, negative effects of such awards? In this paper, the authors simultaneously examine the costs and benefits of an attendance award program that was implemented in an industrial laundry plant. The award used in the study was effective in that it reduced the average rate of tardiness among employees. However, it also led to a host of potential spillover effects that the plant manager readily admits were not considered when designing the program, and that reduced overall plant productivity. Overall, findings demonstrate that an award program that appears to be effective may also induce unintended consequences severely reducing the net value of the program. These results highlight the impact such a program can have on the overall performance of the firm and suggest caution when designing and implementing such programs. Key concepts include: Even simple awards programs can have much broader and complex implications for employee behavior. In the study, two highly valued employee groups - the most productive workers and the most consistently punctual workers - suffered a 6-8% decrease in productivity after the award was instituted. This finding is remarkable because it suggests that awards for one type of behavior have the potential to "crowd out" positive behavior in a completely different realm. This research suggests that non-monetary but extrinsic rewards such as corporate awards act more like monetary rewards than they do intrinsic motivators such as love for the job or empowerment through autonomy. Award programs with a low likelihood of winning may be ineffective because employees do not habituate good behavior, and instead lead to a highly strategic response from employees. Closed for comment; 0 Comments.
Bottlenecks, Modules and Dynamic Architectural Capabilities
Large technical systems made up of many interoperable components are becoming more common every day. Many of these systems, like tablet computers, smartphones, and the Internet, are based on digital information technologies. Others, like the electrical grid, the financial payments system, and all modern factories, rely on digital technologies. How do firms create and capture value in large technical systems? To answer this question, the author argues, it is first necessary to develop ways of describing such systems. One useful lens is architecture. Architectural capabilities are an important subset of dynamic capabilities that provide managers with the ability to see a complex technical system in an abstract way and change the system's structure by rearranging its components. Purposeful architectural change can then be used to create and capture value at different points in the technical system. Furthermore, value-enhancing architectural change arises through the effective management of bottlenecks and modules in conjunction with the firm's organizational boundaries and property rights. Key concepts include: Bottlenecks are points of value creation and capture in any complex man-made system. The architecture of a system defines its components, describes interfaces between components, and specifies ways of testing performance. The tools a firm can use to manage bottlenecks are 1) an understanding of the modular structure of the technical system and how it can be changed; and 2) an understanding of the contract structure of the firm, especially its organizational boundaries and property rights. Closed for comment; 0 Comments.