Probably the most important but least understood aspect of a successful innovative business model is the identification and mobilization of the required entrepreneurial talent and expertise. Too often firms decide first to launch a project and then try to staff and link it with whoever is available, that is in many cases not the right people or partners.
The hidden secret behind the failures of many innovative ventures is not bad technologies but bad governance, with the wrong people taking the wrong decisions or failing to take any decisions at all.
The easiest way to waste an innovation opportunity is to underestimate the financial resources required over time to support the launch and growth of a sustainable business model. Great innovations are never overnight successes.
Entrepreneurial talent and expertise: Who does what?
Keywords: make or buy, scalability, entrepreneurial team, human capital, human resources, venture team
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- (Article) Patzelt, H., Zu Knyphausen‐Aufseß, D., & Nikol, P. (2008). Top management teams, business models, and performance of biotechnology ventures: An upper echelon perspective. British Journal of Management, 19(3), 205-221.
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Governance: Who decides what?
Keywords: board, corporate governance, governance, organizational structure, upper echelon
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- (Article) McDonald, M. L., Khanna, P., & Westphal, J. D. (2008). Getting them to think outside the circle: Corporate governance, CEOs’ external advice networks, and firm performance. Academy of Management Journal, 51(3), 453-475.
- (Article) Miles, M. P., & Covin, J. G. (2002). Exploring the practice of corporate venturing: Some common forms and their organizational implications. Entrepreneurship Theory and Practice, 26(3), 21-40
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- (Article) Phene, A., & Tallman, S. (2012). Complexity, context and governance in biotechnology alliances. Journal of International Business Studies, 43(1), 61-83.
- (Article) Prester, J., & Bozac, M. G. (2012). Are innovative organizational concepts enough for fostering innovation?. International Journal of Innovation Management, 16(01), 1250005.
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- (Article) Sine, W.D., Mitsuhashi, H., & Kirsch, D.A. (2006). Revisiting Burns and Stalker: Formal structure and new venture performance in emerging economic sectors. Academy of Management Journal, 49(1), 121-132.
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How much? Financial resources
Keywords: barriers to entry, break-even, cannibalization, financial metrics, mathiness, payback, valley of death
- (Book) Andrew, James P., Harold L. Sirkin, and John Butman. Payback: reaping the rewards of innovation. Harvard Business Press, 2007.
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(c) Prof. Benoit Gailly, Louvain School of Management