creating a culture of entrepreneurship

EMBA WorldwideAre you ready? You

can be.®

www.emba.pitt.edu | 412-648-1600

Today’s Featured Speaker:Dr. G. Richard Patton

Specialization: Organizations and Entrepreneurship

Dr. Patton has been a Katz faculty member since 1976, teaching courses in entrepreneurship, innovation and strategic management in graduate and executive programs. He has also taught at Carnegie Mellon University’s Graduate School of Industrial Administration and Chulalongkorn University’s Graduate School of Management in Bangkok, Thailand as well as MBA programs in Europe and South America.

Dr. Patton was President, CEO, and Director of the Western Pennsylvania Adventure Capital Fund from 1997-2013, an investment fund that specialized in early stage venture capital investments in the Western Pennsylvania area. In addition to the fund’s portfolio companies, he is active in private equity investing and has been involved in the start-up and financing of numerous companies, serving on the Board of Directors of multiple companies.


Overview

• Entrepreneurship and Strategic Management

• Innovation Overview• A Model of Innovation capability• Google• General Electric Corporation

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What is Strategy?

Strategy is the direction and scope of a business over the long term in order to achieve competitive advantage through its configuration of resources within a changing environment, meeting the needs of markets and fulfilling stakeholder expectation.

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“SUCCESS”

• Strategy must match environment• Capabilities must match strategy

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CapabilitiesEnvironment Strategy

Environment Capabilities• Macro Forces

– Social, political– Economic, technology

• Competitive Forces– Customers– Suppliers– Competitors

• Financial• Physical• Technology• Systems• Human• Culture

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Strategic Equation at Work

• Environment Strategy Capabilities

• Repetitive Stable Custodial,Precedents Reject change

• Turbulent Aggressive Flexible ~ Innovative

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Entrepreneurial

What is Entrepreneurship?

• Individual action…….

• Creating or recognizing an opportunity and pursuing it regardless of the resources controlled…………

• Creating something out of nothing……….

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What is Entrepreneurship?

• A management style…….– Risk taking– Proactivity– Innovation

• Integration of entrepreneurial skills into a large organizations strategic vision to nurture a climate of creativity and innovation…intrapreneurship

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Traditional Managers versus Intrapreneurs (Gifford Pinchot)

Traditional Managers Intrapreneurs

Primary Motives Power-motivatedTraditional corp. rewards

Self-motivatedFreedom, access to resources, rewards

Decisions Agrees with those in powerWhat does boss want?

Gets others to agree to private vision

Time Orientation Responds to quotas and budgets

Urgency to meet self-imposed timetables

Action Delegates.Supervising and reporting

Has a bias for action Delegate when necessary

Courage/Destiny Sees others as in charge of destiny/outcome

Self-confident and courageous

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Traditional Managers versus Intrapreneurs ( Con’t.)

Traditional Managers

Intrapreneurs

Attention Focus Primarily on events insidecorporation

Both inside and outsidesells insiders on need, focus on customer

Risk Careful and risk adverse Moderate and calculated risk-taking

Status Statue Symbols Treasurers symbols of freedom and achievement

Failure and mistakes Avoid mistakes and surprises

Learn from mistakes but manage visibility

Attitude toward system Sees system as protective Dislikes system but learns to manipulate it

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What’s Different about Corporate Entrepreneurship?

• Agency Issue: representing interests of a broader set of stakeholders

• Constrained Opportunities: leverage and build

• Organization Reality– Implementation Focus– Short-term Pressures

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Leverage and Build

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Reality!

Importance of Innovation

• 65% of CEO’s in a BCG study rated innovation as one of their top 3 priorities for the next ten years.

• 2/3 of CEO’s in AMA survey “extremely” or “highly” important.

“The inability to innovate results in decline and extinction.” -Peter Drucker

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Importance of Innovation• …as the business world becomes increasingly

complex and still more competitive, companies are turning to innovation as one of the few durable sources of competitive advantage…

• …the necessity of innovation is now universally accepted, but beyond their enthusiasm for bright ideas, most leaders know that to be successful over the long term they have to develop a strong innovation culture…

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Drivers of Innovation

• External:– Respond to customer demands– Technology– Rate of change ~ product life cycles– Collaborations/alliances with customers– Globalization/Increased competition

• Internal:– Revenue/profit margins/market share– Operational efficiency

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Types of Innovation

• Business Model or Strategy Innovation• Process or Operational Efficiency

Innovation• Products/Service/Markets Innovation

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Sources of Innovative Ideas

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Academia

Internal R&D

Internal Sales/Service

Associations, trade shows, conference…

Competitors

Consultants

Customers

Business Partners

Employees

Traits of Successful Innovators


• Senior Management Buy-in and Support• External and Customer Focus

– Lead users– Market research– Customization

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• Teamwork and Collaboration– Diversity– Cross-functional– Leader support– Internal and external

• Correct Resources– Time ~ Money ~ Priority– Threshold of sufficiency

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• Org. Communication and Sharing– All directions– Work-in-progress– Lessons learned– Collaboration tools

• Ability to Select Right Ideas– Unit manager responsibility– Independent reviews

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• Ability to Identify Creative People– Recruit/retain– Train– Stimulating environment– Time and resources

• Freedom to Innovate – Smart Risk Taking

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• Innovation Measurement and Scorecard– Innovation index– Customer metrics– Employee metrics

• Customer satisfaction• Market share• New products produced• Innovation as % of revenues• R & D spending• Intellectual property

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• Compensation– Evaluation and reward models

• Non-financial• Assignments and autonomy• Individual financial rewards• Impact in promotion decisions• Team rewards

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Barriers to Innovation• Unsupportive culture and climate• Insufficient resources• No formal strategy for innovation• Lack of clear goals/priorities• Lack of leadership/management support• Short-term mindset• Structure not geared to innovation

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Building A Systematic Innovation Capability

Leadership &Organization

Process and Entrepreneurial Culture &Tools Capability Values

People &Skills

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Company leaders and organization aligned around a common vision of innovation

Collaborative, open culture and incentives that reward challenging the status quo

Disciplined approach to building innovation capabilities across the organization

Systematic approach and tools to promote idea generation and portfolio management

The Google Example:Marissa Mayer’s 9 Principles of Innovation

• Innovation, not instant perfection– Launch early and often– Google Labs

• Ideas come from everywhere– Internal idea list and post comments– Growth in ideas

• A license to pursue your dreams– 20% of engineers time (50% ideas)– 70%/20%/10% for management

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Marissa Mayer’s 9 Principles of Innovation

• Morph projects, don’t kill them• Share as much information as you can

– MOMO– Monday Snippets– Friday All Hands

• Users, users, users

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Marissa Mayer’s 9 Principles of Innovation

• Data is apolitical– Tests and experiments– Metrics and measurement

• Creativity loves constraints• You’re brilliant? We’re hiring!

– Big problems that matter– Do great things

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The GE Example:The Jack Welch Era

• 20 year tenure (1981-2001)• Annual return to shareholders 23%• $380 billion increase in shareholder value• Driven by:

– Acquisitions– Timely deal making– Short-term product development and productivity– Internal focus – cost cutting/efficient operations“…a disciplined, efficient machine that delivered on its promise of

consistent growth in sales and earnings…”

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The Jeff Immelt Era:

• Named CEO 9-7-2001• Internet bubble burst• Enron and Tyco• Global political instability• Stock price decline of 60%

“ I looked at the world post 9/11and realized that over the next 10 or 20 years, there was not going to be much tailwind…..It would be driven more by innovation and a premium would be placed on companies that could generate their own profits.”

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Strategic Equation at Work• Environment Strategy Capabilities

• Repetitive Stable Custodial,Precedents Reject change

• Turbulent Aggressive Flexible ~ Innovative

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Innovation Capabilities:Making Corporate Innovation a Core Competence

• Skills• Organizational Structures• Organizational Processes• Metrics• Culture• Systems• Tools

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• Skills– Technical Skills

• 5000 new engineers• Enhanced status – officers• R&D funding, long-term, focus

– Marketing Expertise• 2000 new hires/outsiders• CMO• External focus

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– Growth Leadership Skills – training• External focus• Think clearly• Imagination and courage• Inclusiveness and people• In-depth expertise

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• Structures– Commercial Council ~ best and brightest marketing

– IB Review Meetings ~ front line with CEO

– Business level forums ~ transportation growth council

• Processes– IB Process– Growth Platform Process– Growth Leader Training

• Metrics– Organic growth 4% -> 8%– Net Promoter Score (focus on customers)– 5 X $100 MM IB Proposals– Growth Leader Criteria

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• Systems– St. plans Op. budgets Org. design– Organizational and Leadership Review

• Culture– Discipline– Accountability– Flexibility

• Tools – best practices and analytical tools

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GE versus Successful Traits• Senior Management Buy-in• External and Customer Focus• Teamwork and Collaboration• Correct Resources• Organizational Communication• Ability to Select Correct Ideas• Identify Creative People• Freedom to Innovate• Measurement• Compensation

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GE versus Barriers to Innovation

• Unsupportive culture and climate• Insufficient Resources• No formal strategy for innovation• Lack of clear goals/priorities• Lack of leadership/management support• Short-term mindset• Structure not geared to innovation

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Lessons

• Example of the process of “strategic Shift”-acquisition-based, productivity driven strategy versus an innovation-based organic growth strategy

• A company’s strategic intent needs to be matched by both organizational capability and managerial competence….an example of asset development

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• Organizational Capability and its development as a source of competitive advantage

• Translating broad strategic objectives into a program of implementable actions

• The role of managers at the front, senior and top levels in shaping and implementing a growth strategy

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EMBA WorldwideAre you ready? You

can be.®


Value Proposition

• Our Reputation• Career Success• Worldwide Impact• ROI• Program Details


• University of Pittsburgh celebrating 225 years of education excellence

• Member of the prestigious Association of American Universities (one of only four in PA)

• Nearly 300,000 graduates worldwide

Pitt’s Reputation


• Founding member of the AACSB • Second oldest executive education

program in the world• More than 30,000 graduates in 160

countries worldwide• Top 20 public MBA program

The Joesph M. Katz Graduate School of Business


Katz Faculty Quality

• 97% with doctoral degrees• 97% tenured, full-time

professors• Extensively and exhaustively

published research and actively involved in creation of new knowledge

• Internationally recognized for teaching and research

• Global perspective – teach in all three locations


Rankings

• 8th program among U.S. public institutions• 22nd overall in the U.S.• 57th globally

- Financial Times, 2013


Career Success


The Katz EMBA Worldwide program is a comprehensive experience in business management where you will gain:

•The international language of business•The ability to network yourself into a more successful career•The tools to strategize effectively and lead others•The vision to manage your organization more effectively


EMBA Curriculum


• Resource for all EMBA Worldwide students & alumni

• Résumé reviews, networking advice, interview experience

• Career advice on managing and growing within your present firm

Executive in Residence


Worldwide Impact


Global Executive Forums

• Delivery of core course content in a global context and in-depth study through elective courses.

• Insights into regional business practices and political, economic and social conditions.

• Integration of global class and enhancement of global network.

• Delivery of core course content in a global context and in-depth study through elective courses.

• Insights into regional business practices and political, economic and social conditions.

• Integration of global class and enhancement of global network.


Spring 2014: Pittsburgh, PA – Global Executive Forum IOrganizational Behavior

Fall 2014: Europe – Global Executive Forum IIBusiness Ethics and Public PolicyNegotiations in Business

Spring 2015: South America – Global Executive Forum IIIStrategic Visioning for a Global FutureStrategic Leadership for Change

Fall 2015: Pittsburgh, PA USA – Global Executive Forum IVFaculty selected topics, to be announced

*Topics and schedule are subject to change.

**Students are subject to the rules of the Schengen Visa agreement and are expected to

have the appropriate documentation needed to travel for the EMBA program.

Immerse Yourself


Return On Investment


• EMBA graduates received a 17.3% average salary increase by the end of the program.

• Over 60% of students are likely to recommend the program to a friend or colleague.

• Over 54% say they are extremely likely to support the program as alumni.

-Executive MBA Council 2012 Student Exit Benchmarking Survey

Return on Investment


Program Details


• 18 months in duration• Classes held on alternating weekends

(Friday and Saturday every other weekend)

• Tuition includes:• University fees, all books and

course materials, hotel accommodations and select meals at the Global Executive Forums

• Financial aid: www.oafa.pitt.edu/gradlist.aspx

• Next class begins May 2014

Program Overview


• 71 students among the three locations

• 13 years professional experience, average

• 36 years of age• 7 years of management experience,

average

2013/14 Class Profile


• Manufacturing• Pharmaceutical• Health Care• Technology• Consumer Products• Financial Services• Others including Consulting, Nonprofit

and Energy

Industry Sectors


Requirements• Minimum five years full-time work experience or

equivalent military experience• Application form at

www.business.pitt.edu/katz/emba/admissions• Résumé• University degree & transcripts• Personal Statement (self-recommendation)• Interview• Two letters of professional recommendation• GMAT (optional in some cases)


EMBA WebinarsComing Soon!Navigating Your Career – March 25, 10:00 a.m. ESTPresented by Ned Sherry, Executive in Residence

Available for DownloadStrategy as a Wicked Problem Presented by Dr. John Camillus

business.pitt.edu/katz/emba/webinars


Questions?

Contact:

[email protected]

www.business.pitt.edu/katz/emba


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