Who Innovates?


Schumpter first suggested that small entrepreneurial firms were the sources of most innovations. Later he changed his view and suggested that large firms with some degree of monopoly power were more likely to be the sources of technological innovation. He argued that large firms have the production and other complementary assets that are necessary to commercialize an invention; have the size to exploit the economies of scale that are prevalent in R&D; are more diversified and therefore more willing to take the kind of risk that is inherent in R&D projects; have better access to capital that smaller firms; and, as monopolists, do not have competitors ready to imitate their innovations and therefore are more likely to invest in them. By shifting the focus to the type of innovation, however, whether incumbents or new entrants are able to introduce and exploit innovation is a function of whether the innovation is incremental—a function of how new knowledge and the new product are.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Employees Who Exceed Expectations


  1. Immediate promotion potential: These individuals consistently perform their jobs at such high levels of quality and quantity that a promotion seems to be past due. They also accomplish specific objectives established for the job from the overall business plan. These individuals may be working at a job that is  beneath their basic set of skills and general capabilities, perhaps because no promotional  openings have been available. Without question they could perform the responsibilities of a higher position.
  2. Eventual promotion potential: The performance of employees in this subcategory has been progressing at a rate that is normal for the job and typical for an incumbent who is expected to progress to the next higher-level job within a year or two. Their performance includes normal duties as well as objectives assigned based on the overall business plan.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Situation Appraisal


We may experience confusion and uncertainty over where to begin, how to recognize situations that require action, how to break apart overlapping and confusing issues into manageable components, how to set priorities, and how to manage a number of simultaneous activities efficiently.

Nearly every manager has entered the fantasy of starting fresh. Even on the first day in a new job, the manager is beset by issues that were chronic frustrations for the previous incumbent. Every manager must operate from a middle ground, surrounded by the accumulated problems of the past, a profusion of demands of the moment, and the certainty that future threats and opportunities await him not be ignored.

Situational analysis in this situation thus has a role. It consists of evaluative techniques that lead to proper selection and use of analytical techniques. This process builds the framework for daily use of rational process ideas. It enables managers to make best possible use of the technique of problem analysis, decision analysis, and potential problem analysis.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Inventory of Talent


The process addresses the supply side of planning. It requires identification of the current incumbents and the possible candidates. Candidates are usually nominated by the immediate or unit manager, and the inventory typically sweeps widely, including all viable management candidates rather than being exclusive at the outset.

Included among the candidates are in-line successors (essentially replacements waiting to move up), candidates elsewhere in the organization, and longer-term or high-potential candidates. Many companies make a specific effort to include all women and minorities who may have management potential, near-term and long-term.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The Deliberate Innovation Strategy


The strategic choice view argues that if an incumbent is not the first to introduce an innovation, it may not be because it has no incentive to invest, its competence has been destroyed, it has not recognized the potential of the innovation, it does not have the complementary assets, it did not use the right adoption mechanism, or it is an environment that is not conducive to innovation. It may be because of the firm’s innovation strategy—its goals, timing, actions, and resource allocation in using new knowledge to offer new products or services. By making the right choices early, a firm can build the right competences and complementary assets, or even shape the kind of environment in which it is going to operate.

There are several innovation strategies: offensive, defensive, imitative, dependent, traditional, and optimistic. A firm with an offensive strategy is the first to introduce new products. If the strategy is to be the first to innovate, it will invest in the innovation and build the capabilities to do so.  In a defensive innovation strategy, a firm waits for a competitor with an offensive strategy to introduce a product first and resolve some of the uncertainties confronting the innovation. The defensive firm then introduces its own product, correcting any mistakes that pioneers may have made.

Firms pursuing a defensive strategy normally have very strong complementary assets—capabilities such as marketing, manufacturing, distribution channels, and reputation which allow a firm to commercialize an invention—and when they decide to move, they do so very quickly. They usually have a strong R&D since it takes knowledge to absorb knowledge. The product is not an imitation of the pioneer’s version but rather a differentiated product, often with better features and lower cost. The firm, in effect, catches up with or leapfrogs the pioneer. Thus not being the first to introduce an innovation may not be a sign of a lack of incentive to invest, competence destruction, absence of appropriate complementary assets, inappropriate adoption mechanism, or being in the wrong environment. It may be because the firm in question has a defensive strategy.

While a firm with a defensive strategy would like to differentiate its products, one with an imitative strategy would like to produce a clone of the pioneer’s product. It has very little attention of catching up with or leapfrogging the pioneer. It usually has such low-cost capabilities as lower labor costs, access to raw materials, and strong manufacturing. In the dependent strategy the firm accepts a subordinate role to a stronger firm. It imitates product changes only when requested by the customer or superior. Many large Japanese firms have these satellite firms. The traditional strategy makes very few changes to products, only striving to offer the lowest cost possible. In the opportunistic strategy the firm looks for some unique needs of a market segment that are not being met—it looks for a niche market. The point in all these other strategies is that a firm’s failure to introduce a product first can be due to its deliberate strategy.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Organizational Capabilities


If an innovation is radical in the organizational sense, incumbents have two problems in exploiting it. In the first place, since the change is competence destroying, they do not have the capabilities to exploit it. In the second place, and perhaps more important, the firm’s existing capabilities may not only be useless, they may actually be a handicap to the introduction and development of the innovation. Firms find it difficult to break their habits, the routines and procedures they had put in place to exploit the old technology. They must unlearn the old ways of doing things. New entrants, on the other hand, do not have the burden of the old technology and can go on unencumbered to build capabilities for the innovation and exploit it.

If, on the other hand, the innovation is incremental, incumbents tend to dominate since the required knowledge builds on what they already have, but new entrants would have to build it from scratch.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Strategic Leadership’s View about Investment in Innovation


The strategic leadership view argues that the strategic incentive to invest in an innovation or the failure to exploit it as a result of destroyed competence come only after a firm’s top management has recognized the potential of the innovation. Top management makes the decisions to invest in an innovation, or if such decisions are made by lower level managers, they still reflect the beliefs and values of top management. But incentive to invest in an innovation or its ability to embrace and exploit the innovation is a function of the extent to which the firm’s top management recognizes the potential of the innovation. This ability of top management to recognize the potential of an innovation is a function of its managerial logic, or view of the world, which in turn depends on management experiences, organizational logic, and industry logic. Thus whether a firm is a new entrant or an incumbent may not matter much. What matters is the strategic leadership’s dominant logic.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight