BUSS6049

Managing Innovation

Week 5

Building the Case, Leadership and Team

 Learning Outcome

1. Explain developing the business plan and make forecasting in

innovation
2. Understanding the individual characteristics in the organization
and the entrepreneurial team
3. Understanding climate in the organization and its components
 Outline

1. Developing the Business Plan

2. Forecasting Innovation
3. Assessing Risk and Recognizing Uncertainty
4. Anticipating the Resources
5. Individual Characteristics
6. Entrepreneurial Teams
7. Context and Climate
BUILDING THE CASE
Developing the Business Plan
Developing the Business 1
Plan
Forecasting Innovation
 Forecasting Innovation 2

There are many different methods to support forecasting, each

with different benefit and limitation (see Table 8.2). There is no
single best method. In practice, there will be trade-off between
the cost, time and robustness of a forecast. The most
appropriate of forecasting method will depend on:

1. What we are trying to forecast

2. Rate of technological and market change
3. Availability and accuracy of information
4. The company’s planning horizon
5. The resources available for forcasting
Forecasting Innovation 2
Accessing Risk and Recognizing
Uncertainty
 Assessing Risk and 3
Recognizing Uncertainty

There are many approaches to risk assessment, but the most

common issues to be managed include:

Probabilistic estimate of technical and commercial

success
Psycological (cognitive) and sociological perception of
risk
Anticipating the Resources
 Anticipating the Resources 4

There is no method that can guarantee the success of

innovative projects. This conclusion reflects the three
characteristics of investment in innovative activities:
a. They are uncertain, so that success cannot be assured
b. They involve different stages that have different output that
require different methods of evaluation
c. Many of the variables in an evaluation cannot be reduced to a
reliable set of figures to be plugged into a formula, but
depend on expert judgements.
 Anticipating the Resources 4

Financial methods are still the most commonly used method of

assessing innovative projects, but usually in combination with
other, often more qualitative

The financial methods range from simple calculation of payback

period or return in investment to more complex assessment of
net present value (NPV) through discounted cash flow (DCF).
Project appraisal by mean of DCF is based on the concept that
money today is worth more than money in the future.

𝑇
  𝑡
NPV  =  ∑ 𝑃 𝑡 / ( 1+𝑖 ) −𝐶
0
LEADERSHIP AND TEAMS
Individual Characteristics
 Individual Characteristics 5

Typical characteristics of an entrepreneur include:

Passionately sees to identify new opportunities and ways to

profit from change and disruption
Pursue opportunities with discipline and focus on a limited
number of project, rather than opportunistically chasing every
option

Focus on action and execution, rather than endless analysis

Involve and energize networks of relationship, exploiting the

expertise and resource of other, while helping others to achieve
their own goals
 Individual Characteristics 5

Characteristics entrepreneur by research:

Information acquisition and

dissemination

Intelligence

Sense making

Unlearning

Implementation and improvisition

 Individual Characteristics 5

Research on successful entrepreneurs has identified some of

the factors that affect the likelihood of establishing a venture,
and these include a combination of those which are largely
inherent or given and those which can be more easily learnt or
influenced:

Family and ethic background Formal education

and early work
experience
Psychological profile
 Individual Characteristics 5

Figure 9.1 Factors influencing the creation of a new venture

Entrepreneurial Teams
 Entrepreneurial Teams 6

Key element in effective high-performance team working

include:
1. Clearly defined task and objectives
2. Effective team leadership
3. A good balance of team roles matched to individual
behavioral style
4. Continuing liaison with the external organization
 Entrepreneurial Teams 6

Our own work on high-performance teams, consistent with

previous research, suggests a number of characteristics that
promote effective teamwork:

1. A clear, common and elevating

goal
2. Result-driven structure
3. Competent team members
7. External support and recognition
4. Unified commitment
8. Principled leadership
5. Collaborative climate
9. Appropriate use of the team
6. Standards of excellence
10.Participation in decision making
11.Team spirit
12.Embracing appropriate change
Context and Climate
 Context and Climate 7

Climate is define as the recurring patterns of behavioral,

attitudes and feelings that characterize life in the organization.
There are the objectively shared perceptions that characterize
life within a defined work unit or in the larger organization.
Climate is distinct from culture in that it is more observable at a
surface level within the organization and more amenable to
change and improvement effort

Culture referees to the deeper and more enduring values,

norms and beliefs within the organization. Climate and
culture are different: traditionally studies of organizational
culture are more qualitative, whereas research on
organizational climate is more quantitative, but a multi
dimensional approach helps to integrate the benefits of each
perspective.
 REFERENCE

John Bessant, and Joe Tidd (2015). Managing Innovation: Integrating

Technological, Market and Organizational change 5th Edition. John
Wiley & Sons, the Atrium. South Gate, Chichester, West Susses,
United Kingdom. ISBN: 978
Thank You