Output & Impact: Strategic Management and Entrepreneurship

Friday, May 27, 2016

In the nearly 100 years of the Carlson School's existence, its faculty has produced an unending stream of groundbreaking research, pushing against boundaries in both academia and in the business world at large. Discover notable examples from the Strategic Management and Entrepreneurship Department.

Mapping out the innovation journey

“One of the things that set the Carlson School on the map is the Minnesota Innovation Program that went on in the 1980s,” says Professor Andrew Van de Ven.

In essence, the program was a collaboration among 30 investigators from eight different departments across the University, including the Carlson School, agricultural and applied economics, School of Public Health, Education, Speech-Communication, and the Humphrey Institute. From 1983 to 1992, these investigators studied 14 different innovations from conception to implementation. Those professors at the Carlson School involved in the project included Van de Ven, Harold Angle, Ian Maitland, Chuck Manz, Alfred Marcus, John Mauriel, Peter Ring, Roger Schroeder, and Gary Scudder, as well as about 15 PhD candidates.

And the innovations were as varied as the investigators studying them. Cochlear implants and the commercialization of low gravity in outer space were among the topics under examination.

One of the main results of the research was “a mapping of the innovation journey,” Van de Ven says. “From conception to implementation, 12 hurdles or obstacles are commonly encountered in a wide variety of innovations. When reviewing these obstacles, one of the big ‘ah-ha’s for managers is that they cannot control the process, but they can learn to maneuver the journey. It is like traversing some uncharted river. You can increase your odds if you know how to swim, but that doesn’t assure you will survive getting down the river.”

The results were so impactful that they led to about 100 papers on the topic as well as more than a dozen books. Even the Carlson School’s curriculum was impacted. For several years, Van de Ven and Senior Lecturer Steve Spruth have been teaching “Managing Innovation and Change” to both undergraduates and MBA students. “Here is research that has not only made a difference in advancing science but also in teaching, and Carlson School students have been the first to learn about it.”

The idea for the innovation project came about when Van de Ven was talking to then Dean David Lilly, who was formerly president of The Toro Company. “He asked if I wanted to meet with Twin Cities executives,” Van de Ven says. “He sent a letter to his fellow CEOs and I met with 30 of them within a few weeks…I asked them all a question, ‘What keeps you up at night?’” The common response was innovation and how it could best be managed. Van de Ven suggested a collaboration—the companies would share some innovations they were starting up and he and fellow researchers would track them to see what could be learned and leveraged.

He contacted others throughout the University who were similarly interested and soon they were together exchanging findings and ideas in regular meetings, seminars, and discussions. “There have been thousands of studies on innovation, but very few have focused on the sequence of events that unfold over time. We were one of the first to do real-time tracking where we would be sitting in on meetings at 3M, Cargill, and elsewhere tracking their progress from concept to implementation,” he says.

Van de Ven asks, “Why is this important? Because most companies have many innovative new projects and projects they are trying to get off the ground. Our research findings suggest that companies can increase their odds of innovation success by about 20 percent. That is huge. It can mean the commercial viability of a company.”

Recognizing Good Knowledge

For years, Professor Shaker Zahra has studied how large corporations respond to technological and competitive changes in their industries and how many of them failed to retain their entrepreneurial spirit over time. “I found that, surprisingly, given the resources and skills these companies had, they were also heavily engaged in R&D, alliances, and joint ventures,” he says.

Zahra, the chair of the Department of Strategic Management and Entrepreneurship and the Robert E. Buuck Chair of Entrepreneurship and Professor of Strategy, found that these companies were exposed to vast amounts of knowledge about market and competitive trends and were well aware of what their competitors were doing. However, even though many of these companies were at the center of their market, they somehow failed to fully comprehend the information and knowledge they were receiving.”

“This led me to look into the absorptive capacity of these companies—the capability by which they are able to identify relevant knowledge as well as acquire, assimilate, and use it,” he says. “The concept has been around in the literature. But what I had done was to reframe it in ways that made it useful to managers by separating potential from realized capacities. Potential capability centers on knowledge accumulation. Realized capacity focuses on knowledge exploitation.”

This distinction between potential and realized capacity made it possible to see that companies can amass tremendous amounts of knowledge but still fail to use it effectively. On the other hand, some companies that are not knowledge rich do a masterful job in exploiting their knowledge in fueling innovation and entrepreneurship. “What makes the difference is what managers do to integrate and effectively deploy that knowledge,” Zahra says. “Managerial insight is important.”

Shaker Zahra called attention to the link between organizational knowledge and successful performance.

Zahra’s work, “Absorptive Capacity: A Review, Reconceptualization, and Extension” (Academy of Management Review, 2002), written with Gerard George, has been widely cited—6,336 times—by scholars in entrepreneurship, strategy, international business, information systems, public administration, and political science among other fields.

“Researchers have found it useful to study the link between organizational knowledge and intelligence and innovation, entrepreneurship, and successful performance,” Zahra says.