Tweaking the Iconic: The Management of Continuity- Constrained Resources
Ralph Maurer and Bob Sutton
This research project examines how firms manage the use of resources that are also cultural icons. These resources, which we term iconic resources, are traditionally associated with strong competitive advantages such as improved market share, customer loyalty and firm status. Firms that possess iconic resources, however, are also subject to considerable constraint. This constraint largely stems from the perceived need to maintain temporal continuity with past uses of the resource (e.g. new Mini automobiles must evoke past versions). Even while innovating, firms seek to preserve the iconic status and historical essence of the resource. We know very little, however, about the particular organizational processes and strategies by which this is accomplished. We address this gap through an inductive, qualitative, multi-case study of the development of feature films based on comic-book properties (e.g. Spider-Man, Batman). The findings show how the multiple constituencies that are vested in the fate of these resources (e.g. fans, filmmakers, investors) gently push the films in different directions. I identify particular processes by which firms skillfully ‘shepherd’ the resource through these competing influences and preserve its iconic status. When these processes are not employed, long-term negative impact on the resource’s financial viability can occur even when short-term financial gains are achieved. These findings enhance our understanding of cultural industries, innovation under constraint and the management of especially valuable and inimitable firm resources.
How Do Firms Develop New Strengths?
Nathan Furr and Kathy Eisenhardt
Although strategy has long argued that valuable resources are at the heart of profitability and advantage, little research has addressed where these resources come from or the tactics to develop new resources. Nonetheless, in a world of increasing dynamism, survival and performance depend on the ability of the firm to develop and adapt its resources. We address this dilemma by examining the processes by which managers develop valuable resource portfolios. We study this process in the developing clean technology sector across emerging technologies such as solar, biofuel, and fuel cells using inductive and deductive methods.
Effects of Venture Funding on Innovation: The Case of Minimally Invasive Surgery
Emily Cox and Riitta Katila
Obtaining funding in order to fuel innovation is crucial to the success of new ventures. Despite the importance of both funding and innovation, little existing research has explored how funding impacts venture innovation. We investigate how innovation in new ventures is impacted by the type of investors, the relationship with investors, and by competitor's investors. We compare the efficacy of multiple kinds of public and private funding in accelerating innovation. Both qualitative and quantitative methods are used to construct complete funding histories on young firms and on their innovative output over time.
How Do Entrepreneurs Raise Funds?
Benjamin Hallen and Kathy Eisenhardt
Many entrepreneurs, especially those founding high-technology companies, raise funds from venture capitalists and other professional investors to accelerate the growth and development of their new ventures. While prior research has explored the benefits and costs of having professional funding, prior research on the processes and tactics by which entrepreneurs raise funds has been limited. In my research, I attempt to redress this gap using multiple methods, including inductive interviews and statistical analysis of large data sets. I find that by carefully timing when they raise, selecting the right investors to approach, and nurturing competition between these investors, entrepreneurs may accelerate the fundraising process and improve their chances of receiving investments from more desirable investors.
Exploring Competitive Sequences: Longitudinal Patterns of Competition Among Rivals
Eric Chen and Riitta Katila
While competition has been a fundamental research topic in strategy and organizations, the dynamic process of competition between rival firms has been understudied. This research project focuses on how the sequence of a firm’s competitive moves impacts its performance. Employing a sequence analysis methodology, we explore longitudinal patterns of competition among rivals. The setting is an experiential simulation game, Markstrat, in which teams of participants compete against each other in a computer-simulated environment over multiple time periods. Markstrat is a particularly suitable research setting for studying competitive sequences because it offers a comprehensive data source on firms engaged in a highly competitive environment. Goals of the research project include identification of key competitive sequences in R&D, market entry, and market exit, and their impact on performance given differences in firm resources.
Collaborative Innovation in the Computer and Communications Industry
Jason Davis and Kathy Eisenhardt
This project explores how high-technology firms use inter-organizational collaborations to generate innovative new technologies in the converging computer and communications industry. This research uses a multi-case methodology with interview and observation data from 8 R&D collaborations to understand the role of goal alignment, rotating leadership, power differentials, and intellectual property ownership in engendering effective collaboration.
The Case for Evidence-Based Management
Robert Sutton and Jeffrey Pfeffer
This multi-year project will produce a book and multiple articles. We have launched this stream of research because so many companies do so much damage to people and profits, and so much of it is unnecessary. Managers are routinely misled by bad advice based on weak evidence, so they develop flawed beliefs and destructive business practices. The ways that business advice is produced, evaluated, and sold magnify this problem; managers are showered with too much advice and the reigning standards for judging evidence are defective. Yet none of this is inevitable: Our aim is to demonstrate that when managers and companies learn to select and employ sound evidence and disregard the rest, they trump the competition. In particular, we focus on widespread and damaging half-truths about managing people, organizational strategy, and leadership. We show how managers can learn to discount and discredit enticing advice when faced with evidence that contradicts it. One of the most common -- and destructive -- half-truths, for example, is that "competition makes us stronger." This belief is partly true because pitting people against each other enhances individual performance, at least when people don't need to cooperate or share information (e.g., in a golf tournament). Competition also improves group performance when people bond together to defeat an external enemy. Yet, despite the advice in The War for Talent, Topgrading, and Only the Paranoid Survive, the best evidence shows that competing in an internal "I win, you lose" game erodes team and company performance.
Why Do Managers Shy Away From Old Knowledge? The Case of Product Innovation
New product innovation is central to organizations: successful innovators live longer, perform better, and adapt faster to environmental change. Traditionally, exploration of new knowledge has been the prominent way to create new products. In contrast, the role of existing knowledge (i.e., knowledge that is already known to the firm), and its potential to create new products has been poorly understood. Existing knowledge is generally argued to be more reliable and accessible than new knowledge, but whether it can also create new knowledge and innovation has not been studied. The goal of this research project is to uncover the value of existing knowledge by investigating its creative manipulation in product innovation.