Shaping Entrepreneurial Mindsets
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1 Shaping Entrepreneurial Mindsets
2 The Palgrave Macmillan IESE Business Collection is designed to provide authoritative insights and comprehensive advice on specific management topics. The books are based on rigorous research produced by IESE Business School professors, covering new concepts within traditional management areas (Strategy, Leadership, Managerial Economics) as well as emerging areas of enquiry. The collection seeks to broaden the knowledge of the business field through the ongoing release of titles, with a humanistic focus in mind. Available titles: MANAGING ehealth Magdalene Rosenmöller, Diane Whitehouse and Petra Wilson LEADERSHIP DEVELOPMENT IN A GLOBAL WORLD Jordi Canals GLOBAL TRENDS Adrian Done MANAGEMENT ETHICS Domènec Melé THE ESSENTIAL FINANCE TOOLKIT Javier Estrada THE FUTURE OF LEADERSHIP DEVELOPMENT Jordi Canals HUMAN FOUNDATIONS OF MANAGEMENT Domènec Melé and César Gonzàlez Cantón STRATEGY AND SUSTAINABILITY Michael Rosenberg SHAPING ENTREPRENEURIAL MINDSETS Jordi Canals Forthcoming titles: ETHICAL FINANCE Jan Simon Series ISBN:
3 Shaping Entrepreneurial Mindsets Innovation and Entrepreneurship in Leadership Development Edited by Jordi Canals Dean and Professor of Economics and Strategic Management, IESE Business School, Spain
4 Selection and editorial matter Jordi Canals 2015 Remaining chapters Contributors 2015 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act First published 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number , of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress. Typset by MPS Limited, Chennai, India.
5 Contents List of Figures, Tables and Exhibits Preface and Acknowledgments List of Contributors vii ix xiii Part I Nurturing Entrepreneurial and Innovation Capabilities 1 Leadership Competencies for Innovation and Entrepreneurship: A Top Management Perspective 3 Jordi Canals Part II Entrepreneurship, Intrapreneurship and Innovation 2 Entrepreneurship and Companies Success 27 Pedro Nueno 3 Leading the Startup Corporation: The Pursuit of Breakthrough Innovation in Established Companies 38 Tony Davila and Marc Epstein 4 Empowering Growth from Within: Cultivating Conditions for Intrapreneurship to Thrive 59 M. Julia Prats and Susanna Kislenko 5 Developing an Innovation Mindset 81 Bruno Cassiman 6 The CEO as a Business Model Innovator 97 Joan Enric Ricart Part III Innovative Methodologies and Learning Processes to Foster Innovation 7 Design Thinking and Innovative Problem Solving 119 Srikant Datar and Caitlin N. Bowler 8 Global Leadership Development and Innovation Inside 139 Pankaj Ghemawat 9 Innovation, Blended Programs and Leadership Development: Key Success Factors 158 Eric Weber v
6 vi Contents Part IV Innovation at Business Schools: Creating an Entrepreneurial Learning Context for Leadership 10 Entrepreneurship and Innovation: Business Schools as Drivers of Change 175 Bernard Ramanantsoa 11 Road Signs for Business and Business Education: Navigating the Geography of Social Value Creation 189 Peter Tufano 12 Developing Entrepreneurship Capabilities in the MBA Program 203 Franz Heukamp Index 220
7 List of Figures, Tables and Exhibits Figures 3.1 Management models for innovation The Startup Corporation combines startup qualities with the strength of a corporation The four areas of a CEO s responsibility The key tasks of a CEO Creative matrix Swiffer example Concept poster Prototype Test Learn Stakeholder analysis Sign-up patterns for the GLOBE MOOC on Coursera An interconnected learning model Participant interest in distributed learning activities over time Timing of distributed learning activities to maintain participant interest 166 Tables 1.1 Leadership competencies for innovation and entrepreneurship CEO s key areas in developing leadership competencies for innovation and entrepreneurship Some levers of an innovative corporate culture Qualitative criteria to assess new business ideas A CEO s agenda A business plan: an outline Different types of innovation require different management approaches Mechanisms to shape cultures 47 vii
8 viii List of Figures, Tables and Exhibits 4.1 Organizing innovation selected cases Innovation framework phases 121 Exhibits 12.1 Examples of required entrepreneurship courses in MBA programs Examples of elective entrepreneurship courses in MBA programs 215
9 Preface and Acknowledgments Over the past decade, leadership development in international companies has mainly focused on how companies should attract and nurture local talent to better manage their global strategy and operations in new markets. This is an uphill task, but many companies have designed and implemented good corporate policies and practices to tackle this important issue. Nevertheless, the acceleration of global economic integration is only one of the many challenges that companies will face over the next years. The need to grow internationally will remain strong, but many emerging markets will provide companies fewer growth opportunities than in the past. As some emerging countries become more mature, new local, nimble competitors will find smart ways to successfully compete with multinational firms, both at home and abroad. Technology will also exert additional pressure on traditional competitors to lower costs, and smaller local competitors will benefit from it because they have lower legacy costs. As a result, rivalry coming from growth markets, based both on low cost and innovation, will become more intense. In a world with more volatile and uncertain growth, corporate innovation and entrepreneurship will become more important than ever to create and sustain growth opportunities. Mid-size and large companies need to accelerate innovation and the discovery of new opportunities, quickly test them and go fast to the market. In this process, companies should develop the capabilities to behave like agile entrepreneurs. The new business landscape and the need to generate growth opportunities inside and outside the firm push CEOs and global HR managers rethink leadership development and adopt a different mindset regarding innovation and growth. The battle to attract, retain and develop local talent will become more complex, both in mature and growth markets. Companies should think beyond the traditional benefits of cultural diversity and consider how to help general managers develop the capabilities to operate in different geographies and business functions, with a diverse innovation and entrepreneurial mindset, and transfer the experiences and best practices across countries. This book deals with the challenge of how to include in global leadership development programs the need that companies have to speed up innovation and entrepreneurial initiatives to sustain corporate ix
10 x Preface and Acknowledgments growth. We know a few facts about what makes innovation work and why entrepreneurship in large, established companies succeeds or fails. Unfortunately, our knowledge and expertise in helping design and implement initiatives that improve leadership development along those dimensions is still small. This book tries to provide an answer to the challenge of what companies can do to generate a more solid and deeper entrepreneurial mindset among their people, and how to do it in a consistent way with the firm s strategy. It also offers some experiences on how business schools try to tackle this challenge. This book is structured in four parts. Part I: Nurturing Entrepreneurial and Innovation Capabilities provides an introductory framework to understand how to boost entrepreneurial and innovation capabilities for global leadership development and highlights an agenda for top managers in this crucial area (Chapter 1). Part II: Entrepreneurship, Intrapreneurship and Innovation includes some chapters that deal with key topics: the impact of entrepreneurship on successful companies and society (Chapter 2); developing company capabilities and organizational design for continuous innovation (Chapter 3); creating the context for sustained corporate entrepreneurship (Chapter 4); a conceptual framework to develop innovative mindsets and capabilities in large, established firms through executive education programs (Chapter 5); and business model innovation and the role of CEOs in this process (Chapter 6). Part III: Innovative Methodologies and Learning Processes to Foster Innovation deals with some new methodological initiatives developed at business schools to boost the innovation mindset of participants and maximize learning and development. It includes new initiatives on design thinking curricula and frameworks (Chapter 7) and the design of innovative blended courses on leadership development, combining online and face-to-face courses, and their learning potential (Chapters 8 and 9). Finally, Part IV: Innovation at Business Schools: Creating an Entrepreneurial Learning Context for Leadership offers an overview on different approaches to make a business school a better context for developing entrepreneurship and innovation capabilities. Chapter 10 describes how to create a unique learning ground for developing entrepreneurs. Chapter 11 opens a new perspective on how business schools should innovate by embracing wider notions than economic value creation and introduce social value explicitly. Chapter 12 explains how MBA programs can be very good development contexts for young entrepreneurs and which elements make those contexts more impactful.
11 Preface and Acknowledgments xi These chapters share some key attributes. The first is that their authors take the top management perspective on the issues explored and how CEOs and senior managers look at leadership development and think about growth in a more uncertain world. The second attribute is their inter-disciplinary design, involving experts from different areas and experiences. The chapters authors come from different academic and geographical backgrounds. They include scholars in the areas of innovation, entrepreneurship, leadership development, strategy, marketing and operations. They work at international business schools in Europe, the US and Asia. Some of them are involved in developing universities and working with companies in Africa and Latin America as well. The geographical and cross-cultural expertise of the authors is diverse and deep, which gives the work a very insightful perspective. The title of this book was inspired by R. McGrath and I. MacMillan s (2000) pioneering book The Entrepreneurial Mindset (Boston, MA: Harvard Business School Press) and the widespread use of the entrepreneurial mindset concept. McGrath and MacMillan provide some unique insights on the nature and implications of this mindset. Our book offers a different, complementary perspective: how to shape that entrepreneurial and innovation mindset, based on the assumption that different methodologies and frameworks can make a positive contribution to it. Moreover, we should try different and eclectic approaches, as the authors of the different chapters do in this volume. Most of the chapters were presented at the 2014 IESE Global Leadership Conference, held in Barcelona on 3 and 4 April Conference speakers included CEOs and board members such as Isak Andic (Mango), Patricia Francis (International Trade Center), Rosa García (Siemens), Denise Kingsmill (IAG), Bruno di Leo (IBM), Hans Ulrich Maerki (ABB), Andrea Morante (Pomellato), Francisco Reynés (Abertis), Kees Storm (AB InBev), George Yeo (Kerry Logistics); senior HR vice-presidents such as Jorge Aisa Dreyfus (HSBC), Marta de las Casas (Telefonica) and Erwin Lebon (General Electric); scholars, experts and business schools deans such as Wendy Alexander (LBS), Rolf Boscheck (IMD), Srikant Datar (Harvard Business School), Marta Elvira (IESE), John Gapper (Financial Times), Franz Heukamp (IESE), Pankaj Ghemawat (IESE), Pedro Nueno (IESE), Michael Pich (Insead), M. Julia Prats (IESE), Bernard Ramanantsoa (HEC Paris), Sandra Sieber (IESE), Peter Tufano (Oxford Saïd Business School), Eric Weber (IESE), Zhang Weijiong (CEIBS) and Adrian Wooldridge (The Economist). My IESE colleagues Carlos García- Pont, Alex Lago, Elena Liquete, Javier Muñoz and Mireia Rius, and the
12 xii Preface and Acknowledgments Alumni and Institutional Development, did a great job organizing and planning the conference. I am very grateful to Liz Barlow and her team at Palgrave Macmillan. They have been an important partner in the intellectual effort to open new ground in studies around leadership development from different perspectives. Liz also helped improve the outline of the book and highlighted some important topics to be covered, including the title. Tamsine O Riordan provided the initial support for the book. Kiran Bolla and Geetha Williams helped me effectively during the editing process. I am also very grateful to Teresa Planell, Míriam Freixa and Carolina Olmo, who helped me in the book-editing process with professionalism, while managing so well the daily activities of the dean s office. Jordi Canals IESE Business School April 2015
13 List of Contributors Caitlin N. Bowler, Research Associate, Harvard Business School Jordi Canals, Dean and Professor of Economics and Strategic Management, IESE Business School, University of Navarra Bruno Cassiman, Nissan Professor of Strategic Management, IESE Business School, University of Navarra, and Herman Daems Chair of Strategy and Entrepreneurship, University of Leuven Srikant Datar, Arthur Lowes Dickinson Professor of Accounting, Harvard Business School Tony Dávila, Alcatel-Lucent Professor of Entrepreneurship and Accounting and Control, IESE Business School, University of Navarra Marc Epstein, Distinguished Research Professor of Management (Retired), Rice University Pankaj Ghemawat, Anselmo Rubiralta Professor of Global Strategy, IESE Business School, University of Navarra Franz Heukamp, Professor of Managerial Decision Sciences, IESE Business School, University of Navarra Susanna Kislenko, PhD Candidate, IESE Business School, University of Navarra Pedro Nueno, Bertran Foundation Professor of Entrepre neurship, IESE Business School, University of Navarra, and President, CEIBS M. Julia Prats, Professor of Entrepreneurship, IESE Business School, University of Navarra Bernard Ramanantsoa, Dean and Professor of Strategy and Business Policy, HEC Paris Joan Enric Ricart, Carl Schroeder Professor of Strategic Management, IESE Business School, University of Navarra Peter Tufano, Peter Moores Dean and Professor of Finance, Saïd Business School, University of Oxford Eric Weber, Professor of Accounting and Control, IESE Business School, University of Navarra xiii
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