O’Connor discusses the consequences when companies fail to adapt, transform and renew themselves on the path to innovation. She explores the important question of how incumbents can develop an organizational capability for transformational renewal by building a sustained competency for CE. O’Connor notes the divergent views in a firm’s inability or even unwillingness to engage in path-breaking or transformational change even when the need is evident. She notes that some researchers overlook the role of managers in promoting transformational change. The author also notes that the dynamic capability perspective gives prominence to this role. One pitfall of this perspective, however, is accepting notions of path dependency, where past practices shape future action. Instead, O’Connor argues that entrepreneurial activities can move organizations toward new opportunities and create new paths for breakthrough innovation, setting the stage for transformation. Some of these entrepreneurial activities are indigenously driven. The firm, therefore, needs to work hard to capture the learning that happens within these activities to promote breakthrough innovations. Her field work and surveys of managers provide rich data to identify serious barriers in this regard. These include lack of clarity about the strategic intent; inconsistent action with that intent; not managing resource constraints and organizational challenges; and treating breakthrough innovations as rare events. O’Connor observes that managerial mindsets and inaction may delay or even prevent the development of a sustained capability to engage in breakthrough innovations, a key foundation for the formulation and development of new capabilities.
Gina Colarelli O’Connor
While corporate entrepreneurship sometimes succeeds in companies due to cultural and leadership factors, most firms struggle in their attempts to create new businesses for strategic renewal. In this chapter, observations are offered from an 11-year research program on managing breakthrough innovation in large established firms. The results indicate that expertise development in breakthrough innovation, and, by implication, several specific categories of corporate entrepreneurship, is in its infancy and some of the management practices that plague these attempts are described. Among these are: (a) a lack of distinction between current strategy and strategic intent, which influences evaluation criteria used to judge project progress and success; (b) the failure of project managers to address the full complement of technical, market, resource, and organizational uncertainties they face; (c) the failure of breakthrough innovation program leaders to operate with a portfolio mentality; (d) undertaking breakthrough innovation projects without regard to the complete set of management system elements that support the high uncertainty context that plague them; and (e) high rates of turnover among personnel, which prevent the learning required to develop sophisticated expertise. Propositions are offered for management practices that may help develop a dynamic capability for breakthrough innovation as a form of corporate entrepreneurship.