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Problem definition: Firms developing novel and innovative products regularly face a canonical product development and introduction problem: introduce a proven and immediately available product or delay product introduction until the successful development of an advanced version. Academic/practical relevance: Limited access to resources for the development of an advanced version adds another wrinkle to this problem, particularly for cash-constrained start-ups. For such start-ups, the introduction of an on-hand product can generate additional funds to support the development of an advanced product. However, the lower performance of the on-hand product can negatively impact the perception of the firm’s future products and lower future profitability. Methodology: We study the trade-off between revenues that an on-hand product generates for research and development funding and the negative effect it has on future profits. We characterize the optimal introduction timing of the on-hand product as a function of the financial resource constraints, the interdependence between these sequential products and the cost of development. Results: We identify important differences between the optimal product introduction strategies of a start-up and an established firm. Specifically, although it is always optimal for an established firm to accelerate the launch of a better-quality on-hand product, a start-up might find it optimal to delay its launch. The impact of technological failure and different forms of learning on the optimal strategy of the start-up are also explored. We translate our analytical findings into a managerial framework and illustrate these results using examples from the pharmaceutical and medical devices industries.

Firms that operate in high-velocity markets must configure and utilize diverse technological innovation capabilities (TICs). TICs provide the firm with technological strength and adaptability to manage technological changes with respect to demand changes on the customer value trajectory. In this paper, we examine the configuration of a high tech firm’s TICs involving R&D, manufacturing and marketing capabilities to develop technology exploring or market exploiting activities in response to shifts in the customer value trajectory. We analyze the cases of micro, electrical, mechanical systems (MEMS) accelerometer innovators, and identify strategic configuration of TICs that has been necessary to trace the customer value trajectory with technological changes. We further show how the stability of the customer value trajectory plays a role for the firm in market transition to configure and utilize its TICs for exploring or exploiting the market. Based on our findings, we offer a managerial decision-making framework regarding strategic management of TICs with respect to the customer value trajectory in high-velocity markets.

In growing recognition that the business community must play a key role in the global issues encapsulated by the United Nations Sustainable Development Goals, Babson College, which has a business-focused curriculum, has striven first to reinvent its teaching of ethics and then, particularly over the past decade, to enhance its focus on sustainability, social responsibility, and social entrepreneurship. As previous initiatives did not build sufficient linkages between the liberal arts, natural sciences, and business curriculum, the College is now engaged in a far more comprehensive effort to educate our undergraduate business students in “integrated sustainability,” which it defines as “systems thinking that integrates ecological integrity, social responsibility, and value creation simultaneously.” By examining the meaning, skills, and pedagogical opportunities in systems thinking within the context of larger discussions on humanistic management, this article shows how systems thinking is a particularly fruitful way to ground business students in the natural sciences and the liberal arts, develop their complex problem-solving skills, and thereby reinvigorate management education in ways that prepares students to “render service to humanity.” Our hope is that sharing Babson College’s experience in this regard – both our successes and challenges - may provide useful insights to other faculty and academic leaders seeking to enhance humanistic management within their own higher education institutions.

High market uncertainty impedes an entrepreneur's ability to evaluate the state of the market for a business opportunity. For many entrepreneurial ventures, data collection and analysis techniques and technologies are becoming an important source to manage uncertainty. This trend is often referred to as “data-driven entrepreneurship.” We consider a dynamic approach using data to overcome market uncertainty for business opportunity-related evaluations. In particular, we examine the entrepreneur's investment portfolio in which each investment generates expected returns and some information about a specific aspect of the market for a single business opportunity. We develop a model that analyzes imperfect market data (e.g., financial, social, regulatory), while factoring in the entrepreneur's risk preference and operational shortages of resources, routines, reputation, and regulations. Our numerical findings show that, rather than pursuing the highest expected returns, an entrepreneur may choose perfect information, risk hedging, or market-controlling investments based on his/her cash level and risk preference. Hence, the entrepreneur, fueled by the availability of data analysis, could overcome uncertainties and obtain better insights for business opportunity decisions.

The innovation has been recognized as a competitive advantage for almost all organizations. Yet, it has been a rather elusive topic when it comes to implementation. Operations design and strategy are mostly concerned about effective implementation of ideas. Hence, in this paper we marry these two fields (operations design and innovation), and identify three key areas for evaluating the innovation strategy, based on our previous research on innovation management. We further offer three prescriptions for practical implementation, which may be of value to managers with their assessment of the value of their innovation strategies.

The purpose of this paper is to examine sustainability-oriented innovations within the electric and energy utility industry in US through the lens of innovation theory and obtain insights on the development and commercialization of sustainability-oriented utility innovations. This research focuses on the top MSCI ESG-rated U.S. utility companies and explores a mix of innovations and strategies that differentiate these top companies. The three emerging propositions from this study are the importance for companies to diversify their innovation portfolio, engage their customers, and establish an intrapreneurial culture. The conjoining of these three propositions offers an evaluation and decision making framework for the companies to maximize the efficacy of profitable and sustainable innovations at all levels and gain a competitive edge against their competitors.

When colleges commit to responsible management education (RME), they begin a journey of integrating a potentially transformative pedagogy into an established academic culture. This process can be challenging as academic institutions are notoriously difficult to change, particularly when it comes to faculty-led processes such as pedagogy. In this paper, we explore an eight-year period in which one academic institution, Babson College, transitions from signing the PRME to integrating RME into the college's operations and pedagogy. This case study analysis shows that the same factors that facilitated widespread, early adoption of RME have also hindered the college from fully achieving its desired impact on student learning and the broader community. This case contributes to the growing body of research on RME by providing a longitudinal perspective that highlights the complexity of aligning an academic institution with this transformative pedagogy.

While innovation is on the agenda of almost all organizations, successful innovation management remains quite elusive for many managers. This paper on innovation management strategy identifies four key interrelated areas that an innovator needs to concurrently define and organize for a systemic and effective innovation: the innovation concept, the consumer context, the competitive context, and the collaborative context. We refer to the framework involving these four areas as the 4Cs of innovation. Careful consideration of each of these four areas addresses specific issues, regarding operations, marketing, finance, and regulations, for the organization to enhance the effectiveness of the innovation strategy. We offer a practical diagnostic tool to implement the 4Cs of innovation framework. Further, we discuss our research on 99 highly innovative clean technology projects funded by the Advanced Research Projects Agency-Energy as an example of how to utilize the 4Cs of innovation framework. Our analysis brings out important insights for managers of established firms and startups on how to prioritize innovation activities and highlights the effective use of 4Cs of innovation for guiding successful innovation strategies.

We draw upon stewardship theory to formally derive bounds on the investment amount in a business prospect, and to characterize ownership sharing when investors offer two-stage financing along with know-how to increase the prospect’s valuation. In the early-development stage, we show that the direct effect of investor know-how increases the entrepreneur’s share while the indirect effect from that know-how due to its interaction with the investment size, decreases it. In the subsequent growth stage, the direct effect decreases the entrepreneur’s share while the indirect effect increases it. These tradeoffs offer theoretical and practical implications for writing investment contracts involving investor know-how.

Developing technologies for a transfer from science to market is a key element of research-intensive organizations such as innovation management centers that work closely with inventors to commercialize their technological innovations. To advance the commercial viability of technological innovations, this paper proposes a framework that integrates topic modeling, survival analysis, and judgment of subject matter experts to forecast promising technologies using patents as data resources. Regarding the commercial viability of identified technologies, our empirical analysis focuses on patents and licensing data from a prominent innovation management center over a 20-year period. We are able to identify technologies that are statistically significant for predicting the likelihood and the time until a patent is commercialized, and suggest a way to assess their scope of technological impact. Our results contribute to the understanding of promising healthcare technologies and help R&D managers to develop the knowledge they need to advocate technologies in support of commercial returns.

Problem definition: We examine how the presence of capital market frictions influences the decision to invest in production cost reduction and the resultant production volume. This investment can increase the firm’s cash flow by increasing the profit margin, but it can also decrease the firm’s risk-free cash reserves and thus affect its exposure to capital market frictions. Academic/practical relevance: Process improvement aimed at production cost reduction has generated myriad of theoretical questions about efficient investment options and capacity choices. From a managerial perspective, process improvement is a fundamental concern in operations strategy. Nevertheless, its analysis typically excludes financial constraints by assuming a perfect capital market. Methodology: We formulate a two-stage profit maximization model in which a capital-constrained firm commits to a cost-reduction investment in the first stage in anticipation of its production decision in the second stage of this two-stage decision process. The firm considers capital market frictions when making decisions at each stage, while considering uncertainty in demand for its offering and in reducing its unit production cost. Results: When a firm faces small initial capital and low preinvestment unit production costs, it can benefit from investing in production cost reduction in the presence of capital market frictions more so than in their absence. Moreover, uncertainty in the production cost reduction mitigates the impact of market frictions on the net benefit (i.e., additional profit), whereas demand uncertainty decreases the feasible parameter space, where investing in production cost reduction is optimal. Managerial implications: A firm’s decision to invest in production cost reduction affects its operational and financial capabilities. Managers should thus consider this investment as an operational hedge not only against the uncertainty of matching supply and demand but also against exposure to capital market frictions and the resultant financial risk.

The economic and social outcomes of mining development can be enhanced by positioning local communities central to development activities. Conventional approaches have failed to respond to the needs of the community without this involvement in decision making. Accordingly, novel development approaches for community involvement and sustainability have to recognize the complex nature of social systems in which mining sector exists. The objective of this paper is to develop a community-centered approach by integrating rapid and participatory nature of design thinking with multi-criteria decision analysis (MCDA) in order to support sustainable development. While design thinking engages multiple stakeholders for generating alternatives, MCDA provides metrics for assessing these alternatives. Drawing on an example from a small scale mining development in Central America, this paper shows that early community involvement and rigorous impact assessment on a regular basis motivate community involvement and give value to the social outcome of mining development.

This chapter describes the contribution of the operations management (OM) field to entrepreneurship and startup practices in terms of extant knowledge, emergent trends and research opportunities. To characterize the extant knowledge, we review relevant literature in the first half of the chapter and highlight the notion that startup operations are subject to three distinctive operational constraints on, or lack thereof, resources, routines (or processes), and reputation — also referred to as 3Rs in this chapter — that are affected by the capabilities of entrepreneurs as well as the uncertain, dynamic and complex environment they face. We codify these ideas in terms of five 3R principles that are uniquely tied to startup operations. In the second half of the chapter, we draw upon anecdotal evidence from connectivity based analytics and low cost intelligent robotics to identify emergent trends in terms of unique operational innovations that are enabling, and co-evolving with, business model innovation in startup settings. The chapter ends with a discussion of managerial implications and promising research avenues.

For many entrepreneurial ventures, data collection and analysis techniques and technologies are becoming an important source that can foster new businesses. This trend is often referred to as “data...

This article addresses the challenge of generating cash investment and business knowhow through the design of a contingent contract between an investor and an entrepreneur. We first develop a two-s...