Benyamin B. Lichtenstein

The Role of Organizational Learning in the Opportunity- Recognition Process

Firms engage in entrepreneurship to increase performance through both strategic renewal and the creation of new venture opportunities. Organizational learning (OL) has become an effective avenue for strategic renewal. But what of creating venture opportunities—can OL enhance the process of recognizing and pursuing new ventures? This article argues that OL can strengthen a firms ability to recognize opportunities and help equip them to effectively pursue new ventures. First, we identify three approaches to OL—behavioral, cognitive, and action. Then, we introduce a creativity–based model of opportunity recognition (OpR) that includes two phases—discovery and formation. Next, we show how each of the three types of learning is linked to the two phases of OpR. We suggest propositions that support our claim that OL enhances OpR and offer examples of firms that have used these organizational–learning approaches to more effectively recognize and pursue venture opportunities. These insights have important implications for entrepreneurial firms seeking to advance the venture–creation process.

A Terminal Assessment of Stages Theory: Introducing a Dynamic States Approach to Entrepreneurship

Stages of growth models were the most frequent theoretical approach to understanding entrepreneurial business growth from 1962 to 2006; they built on the growth imperative and developmental models of that time. An analysis of the universe of such models (n = 104) published in the management literature showed no consensus on basic constructs of the approach, and no empirical confirmation of stages theory. However, by changing two propositions of stages theory, a new dynamic states approach was derived. The dynamic states approach has far greater explanatory power than its precursor, and is compatible with leading edge research in entrepreneurship.

Strategic, political, and cultural aspects of IT implementation: improving the efficacy of an IT system in a large hospital.

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Push or Pull: Changes in the Relative Risk and Growth of Entrepreneurship Among Older Households.

4 trillion by 2017, a trend that is leading executives to implement information technology (IT) systems to contain these rising costs. Studies show that numerous factors determine the outcome and net benefits of IT in healthcare. However, what happens when a newly implemented IT system results in negative outcomes? We explore this question by examining a newly implemented IT system in a large hospital that was yielding none of the benefits for which its designers had hoped. Using an expanded set of analytic lenses, our in‐depth study found that political issues were a major stumbling block to the implementation of this IT system, as the interests of IT managers were different from those of the systems users. In addition, cultural values among these stakeholders were not aligned. The new IT system carried very different meanings for these two key groups. These political and cultural issues, which reflect a broader set of factors than is commonly applied in IT or in management, led to specific recommendations designed to improve the systems viability and benefits. In a follow‐up analysis we found that these alternative lenses helped increase the intended usage of the IT system by 16 percent in the first year, yielding a 20 percent improvement in performance. By better understanding the cultural and political significance of IT implementation, managers may thus improve the effectiveness of new information technologies for containing costs in hospitals.

Push or Pull: What Explains Growing Entrepreneurship Among Older Households?

Purpose of the study Amid insufficient retirement savings and the growing need to work longer, it is important to understand why self-employment, especially entrepreneurship, has grown among older households. Older households may have been pushed into entrepreneurship by the growing risks of wage-and-salary employment as wages and jobs have become less stable. Alternatively, older households may have been pulled into entrepreneurship as the associated risks have declined, for instance, due to greater opportunities to diversify income away from risky business income. We examine the economic causes of the rise in entrepreneurship among older households. Design and Methods We use summary statistics and multinomial logit regressions to analyze the link between economic pressures in wage-and-salary employment, financial strength of entrepreneurship, and the presence and change of entrepreneurship among older households-aged 50 years or older. We use household data from the Federal Reserves Survey of Consumer Finances from 1989 to 2013. Results We find little support for the claim that increased economic pressures are correlated with rising entrepreneurship. Instead, our results suggest that the growth of older entrepreneurship is coincident with increasing access to dividend and interest income. We also find some evidence that access to Social Security and other annuity benefits increases the likelihood of self-employment. Implications: Entrepreneurship among older households increasingly correlates with income diversification. Policymakers interested in encouraging more entrepreneurship among older households could consider increased access to income diversification through social insurance.

Applying Generative Leadership to Your Organization

Older households need to save more money for retirement, possibly by working longer. But, the same labor market pressures that have made it harder for people to save, such as increasingly unstable labor markets, have also made it more difficult for people to work longer as wage and salary employees. Self-employment hence may have become an increasingly attractive alternative option for older households. Entrepreneurship among older households has indeed grown faster than wage and salary employment, especially since the late 1990s. But, this growth, rather than reflecting rising economic pressures, may have been the result of growing financial strengths – fewer financial constraints and more access to income diversification through capital income from rising wealth. Our empirical analysis finds little support for the hypothesis that growing economic pressures have contributed to increasing entrepreneurship. Instead, our results suggest that the growth of older entrepreneurship is coincident with increasing access to income diversification, especially from dividend and interest income. We also find some tentative evidence that access to Social Security and other annuity benefits increasingly correlate with self-employment. Greater access to interest and dividend income follows in part from more wealth and improved access to Social Security may reflect relatively strong labor market experience in the past.

Leadership in the Cusp of Change

Throughout this book we’ve described and exemplified how generative leadership informed by complexity science can work successfully in organizations large and small. Each example has drawn out one or more key insights into how complexity science can be leveraged to create ecologies of innovation. For example, we saw how: Netflix grew through “ecological” partnerships that often constrained them at the same time IBM successfully navigated a period of criticalization The SEED program in Indonesia emerged in unexpected ways that were more effective than could have been planned Starbucks’s move into Chicago was facilitated by a four-phase process of emergence Apple, Inc., and Parkside Hospital found ways to “systematize” experiments in novelty Jerry and Monique Stern in identified “positive deviants” in Vietnamese villages, and reframed their marginal behavior into shared knowledge that virtually alleviated malnutrition there and in dozens of other countries June Holley constructed smart networks that dramatically decreased hospital infections, and the U.S. Army now pursues warfare through information networks The list goes on.

Creating Ecologies of Innovation

The elite sales managers at IBM in the early 1990s were proud to work at the world’s leading information technology (IT) company. But more recently, something had begun to change. Slowly at first, then far more quickly, it was becoming apparent that the company’s prospects had become increasingly bleak. A new technology, the microprocessor, entered the market a decade before, and IBM itself had helped define this new market when it launched the phenomenally successful IBM PC in 1981. All along, IBM’s experts had continued to counsel that the PC would never replace the vaulted IBM mainframe computer. They were wrong. During this period, low levels of interaction resonance (the important idea we described in the last chapter) among the product developers as well as the sales and services teams were setting the company up for a crisis.

The Innovative Power of Positive Deviance

Innovation—it’s a buzzword for the twenty-first century. Creating new services, new products, new processes, new business models, new organizational forms, and new industries seems to be the key to success in this era of business. What drives innovation? Why do some companies achieve innovation more consistently than others? Is it the people? Is it the compensation? Is it the industry?

Introduction: A New Science of Leadership

In this chapter we begin to describe the specifics involved in creating an ecology of innovation in your organization or community. Thus far we have focused on the workings of complex systems, and we have shown how advances in complexity research over the last quarter century can inform one’s thinking about innovation and adaptation in organizations. In particular, we have pointed to the importance of a kind of leadership that enables change and adaptation in organizations, what we call generative leadership. Earlier chapters described how such conditions can and do encourage individuals throughout the organization to experiment with novel approaches, either in an effort to capitalize on opportunities or to solve problems. We also described how these simple ideas can, under the right conditions, extend and expand a wave of change that spreads across the entire organization. At the same time, we have insisted that these things don’t happen by themselves. Generative leadership is needed to create the conditions that enable success. In this chapter and in the next, we describe specific ways in which generative leadership enables in novation-led success even under difficult and challenging conditions.