1.12 From there everything went from strength to strength (with the standard booms and slumps), culminating in the recent big box office production of movies such as, Spiderman, Daredevil, The X Men, and Incredible Hulk. But Lee, being still just an employee never made the kind of money he could have made if he had gone into business for himself. However, today, he has been freed from his lifetime contract at Marvel, but still remains Chairman Emeritus of Marvel Media. He is free to pursue his own agenda now, with rights to his own name, likeness, and any new characters he will create. He has co-founded (at the age of 76), Stan Lee Media, an internet based multi media company. This new organisation grew fast and has had numerous tie-ins with other major organisations. So in the later years of Lee’s life he has finally become a true entrepreneur.
1.13 Even though certain themes continually resurface throughout the history of entrepreneurship theory, presently there is no single definition of entrepreneurial characteristics/traits that is accepted by all, therefore I have picked and chosen those parts of various theories that I feel are relevant to Stan Lee. The ones that I feel Stan Lee obviously possesses are as follows:
1.14 Risk taker; I feel the whole point of this concept is to actually limit risk and in effect use ‘calculated risk’. Entrepreneurs are not really risk takers as would be defined in the concept of gamblers. In fact from my extensive reading (e.g. The Millionaire Mind by Thomas J. Stanley) I have found that most millionaire entrepreneurs avoid gambling as they like to be in control of their risks. Stan has exhibited this with the choice of his characters (as illustrated earlier), going against popular trends (he didn’t want to follow the trends he wanted to set them). Often he would do this while going against the wishes of his editor, and in effect putting his career on the line. However it could be said that maybe he lacked in this area, as it took him so long to go into business for himself as an entrepreneur, and therefore reap the full rewards for his creations/work.
1.15 Ambition; This is to do with an ardent desire to achieve distinction, an aspiration to be, to do. Stan has exhibited this throughout his life. Right from his childhood when he wanted to achieve for his families financial sake, to as he got older and he wanted to be widely recognised in his field (Pulitzer prize included!). Wanting to set industry trends, and achieve creative fulfilment. In fact his ambition to achieve distinction was so much that in the early days he often had feelings of depression “I felt I was in the one business that, no matter how good I might be at it, there was no place to go from there. Neither television, networks, nor movie studios, nor book publishers were reaching out to comic book writers. At least not then”. This quality to achieve distinction in his field was a major factor and continues to be so.
1.16 Nurtured nature; This is about whether he was born the way he was or if he developed the way he was due to his social environment. In Lees case (as stated earlier) I feel it was more to do with nurture and seeing his family struggling (especially his father) that developed him into the person he is today; in the sense of his innovation/creativity (as he escaped into reading books and making rough comics) and work ethic (in Lees own words “I had the work ethic drummed into me at an early age”).
1.17 Smart Luck; Lee recognised the importance of luck in life, as he states “Luck seems to deal most of the cards in the game of life”. Becoming editor at Marvel at the age of 18 (as discussed earlier) was a major stroke of luck. Lee was in the right place at the right time, and as he has proven he was most definitely the right person. So therefore luck plays a major factor in Lee’s life, but at the same time (this is where the smart luck comes in) he still had to take advantage of the opportunities afforded to him. He certainly did at Marvel Comics, but maybe he missed the opportunity to fully take advantage in the sense of using his opportunities as a stepping stone to achieving even more as an individual entrepreneur rather than working for someone else. I think he realises this now and that’s why he has entered business for himself.
1.18 Divine energy; Lee, throughout his life, has been full of energy (and still is in his old age as illustrated by the starting of his own company). He would often be found singing and dancing to his staff at the marvel office (‘bullpen’ as it was called). As his biography co-writer (George Mair) states “Stan seldom got discouraged. No matter what happened, Stan simply bounced back an on to the next project”. He is amazingly positive, almost unnervingly! Maybe this gave him a sense of naivety and therefore may have been a factor in him not becoming as entrepreneurial as he could have been.
1.19 Spouse/Support Structure; Having good friends and family played a major role for Stan (especially his wife). Stan’s wife (Joan) played a major role in his success (as was illustrated earlier). As the saying goes, ‘behind every great man, there is a great lady’. Without his wife’s support and encouragement maybe Stan would not have achieved what he did (the most obvious example being when his wife convinced him not to quit Marvel and instead create his now famous characters), and he acknowledges this too. But maybe if he did quit he may have started his own company and been even more successful (as an entrepreneur). There’s no way of knowing, but with Stan’s level of innovation/creativity this (in my opinion) would have been a strong possibility.
1.20 Project champion – Stan can be seen as a Project Champion as he exhibits a lot of the qualities needed (maybe more today, now that he has started his own business than in the past). He always had a vision of how his industry should be and still has a vision of which direction it should take (driven by multi media and the internet). He has emerged as being very entrepreneurial and a risk taker. He is extremely confident in his own ability, verging on the point of being egotistical. He sets extremely high standards in his work and for those who work with him. Even though he is (by nature) a nice person, and treats his staff with respect and makes the working environment as fun as possible (he’d be a great person to work for in my opinion), he still demands the highest standards and is tough if they are not achieved. His field (comics) is his life and he has sacrificed a lot to achieve his success, but he would not say he has sacrificed as this is what he loves
1.21 Conclusion: I would say Stan Lee is unquestionably an innovator, and was definitely an intrapreneur, when maybe if he had more entrepreneurial characteristics he would have gone into business for himself (he realises this himself too). Maybe he was too nice/naïve to see how he could have maximised his potential (like going into business himself, or even publishing the ‘caption’ book example), and now in the twilight years of his life he is realising he can be an entrepreneur by starting his own business (Stan Lee Media). Whether this new venture proves to be successful or not, only time will tell, because any such venture is a risk. Also at the time of writing this report Stan Lee Media is not doing as well a Stan would have anticipated. So he has finally achieved entrepreneurial recognition, whether he will succeed or not is a matter of time, and I’m sure he’s aware that being entrepreneurial by nature involves high risk.
Innovation and Entrepreneurial Studies - Part 2
2.1 Develop from the literature an account of the key features of the overall processes that lead to innovative products and services. Indicate how the nature and balance of difficulties to overcome might vary between the settings of
a) Large Plc b) SME c) Individual Inventor
2.2 Innovation is the key to gaining and maintaining a competitive advantage in the business world.
2.3 Firstly I would like to point out that innovation in firms is a systematic managed set of processes which competes for budget resources with other areas of the firm. And innovation by nature competes/consumes current wealth but produces future wealth (which may be the difference between the long term success or failure of the firm).
2.4 A good example is the ‘Innovation: Key elements of Process’ diagram (see figure 1 in appendix). The diagram is a visual representation (blue print) of the managed process that leads to knowledge that is unique to the organisation that has been generated through practical and theoretical work. I feel the key features of the overall process that leads to innovation are illustrated in the diagram. The primary steps in the diagram (primary innovation cycle) are:
- NEEDS drive CREATIVITY generates IDEAS
- PROJECT CHAMPION generates PROJECT PROPOSALS
- PROJECT PROPOSAL EVALUATION commits RESOURCES
- PROJECT MANAGEMENT creates CAPABILITY & KNOW-HOW WEALTH
- ECONOMIC & MARKET DECSION TO EXPLOIT KNOW-HOW IS TAKEN
2.5 A good representation of the key features of success for the process of innovation is given by Twiss eight factors of successful innovation (source: Managing Technological Innovation – Fourth Edition by Brian Twiss). If an organisation (be it a ‘large plc’ or ‘SME’) sticks to these and the ‘Innovation: Key elements of Process’ diagram, they are ensuring they have more chance of a successful innovation. The Twiss eight factors are:
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2.5.1 A Market Orientation: For an ‘invention’ to be considered an ‘innovation’ it must succeed in the market. Where ‘invention’ is the creation of an idea, and ‘innovation’ is the process by which it is translated into the economy/market. Thus the innovation (no matter how good it seems) may not be what is needed to succeed in the present economy and is deemed a failure. Therefore there needs to be excellent communication between the innovation department and the marketing department in order to avoid this failure. This must be become an integral part of the companies structure/culture in order to succeed. This lack of communication problem is more likely to be an issue in larger (more bureaucratic) organisations than it would be in SME’s where the departments are likely to be closer (less bureaucratic).
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2.5.2 Relevance to the organisations corporate objectives: This relates to corporate planning. When developing an innovation it is absolutely necessary that it compliments corporate objectives, because no matter how attractive a potential innovation may seem, it may not be right for that particular organisation. The company may not have the right (or sufficient) resources to develop/introduce the innovation into the market, or it may not even consider the innovation to be complimentary to the direction it wishes to be headed in. Therefore corporate planning/objectives need to be inextricably linked and made clear to the R & D department of the organisation, because today’s innovations will almost certainly be the basis of the future direction/success of the organisation, and in turn the corporate strategy.
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2.5.3 An effective project selection and evaluation system: This is the most critical decision area for the R & D manager. There are numerous techniques to evaluate whether a particular project is worth pursing; these range from simple quantitative methods to highly sophisticated quantitative ones. It is critical that the numerous techniques are used to their full advantage, because if a bad project innovation is spotted early it can save a lot of time, money, effort, etc, in pursuing something that was destined to fail. Therefore it is essential to use all the information available at the time of selection in order to pursue an innovation that is not destined to fail from the offset. Therefore a formal selection procedure is essential.
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2.5.4 Effective project management and control: Project management is an essential component in respect of whether the innovation will be a success or a failure. If a project is run badly and leads to project over-run and an escalation on the budget required, it can completely destroy any financial viability the project may have had (The Channel Tunnel and Millennium Dome spring to mind!). In some cases this escalation in cost can even endanger the survival of the organisation as a whole. Therefore good project management is essential. One solution put forward is to have an adaptive system of management in place that can continuously adjust/react to take into account the expected changing nature of a project throughout its duration.
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2.5.5 A source of creative ideas: In order to be innovative it is logical to assume there must be a degree of creativity at work. Creativity can come from anywhere in the organisation, and often it comes from outside the organisation too e.g. competitors, suppliers and customers. Adapting others ideas or getting input from outside sources (such as customers) can prove very fruitful. However it is still essential that an organisation can nurture a creative culture for itself, in order to stay ahead of the competition and achieve innovation. It must create an environment which encourages creativity and attracts/retains creative people.
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2.5.6 An organisation receptive to Innovation: Innovation by its nature is linked to change, and change is (by its nature) something that is difficult to achieve. There will always be those within the organisation who will be opposed to change, this can be more rational and irrational reasons. People fear change, organisations fear change. This can lead to sabotage and the suppression of innovative ideas. Change can go against the organisations accepted norms, people may feel it will affect their jobs, or send the company in an unwanted direction. It is therefore essential that the skill of the prime innovator must stretch to that of a ‘sales man’. He must sell his idea and convince those people that matter that its is worth pursuing. If he achieves this (usually convincing top management) it will make the transition much more natural. This is more of a large organisations problem, because within and SME, the innovator is usually a member of top management and therefore they have been more obviously successful in terms of innovation.
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2.5.7 Commitment by one or a few individuals: This stresses that it is not organisations, but people who innovate. This is the extra ingredient (a person’s entrepreneurial and creative spirit). There needs to be (one or a few) a project champion; someone who is single minded when it comes to the project, someone who puts the project ahead of personal and career interests. The organisation must create an environment that caters for such a person in order to fully utilise his potential and in turn the success of the innovation/project.
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2.5.8 A product orientation: No matter how innovative the end product is, it is of no use if it cannot be practically transferred to become a viable product/innovation within the economic market. A product may have been produced successfully by highly skilled workers as a prototype but it must be transferable to standard production processes. It must be able to be produced at the lowest possible cost, in order for it to be economically successful (which is the real bottom line, making a profit) therefore the link between R & D and production must be just as strong as the link between marketing and R & D (as discussed in the market orientation factor).
2.6 Sometimes people involved in the innovation process will have other (full time) roles within the organisation, so therefore their time available is limited. This is more of a problem for SME’s than larger organisation as in smaller organisations these regular functions (of the employee involved) are usually more crucial to the organisations day to day functioning. A way around this problem is the costly but effective procedure of outsourcing work.
2.7 The implementation of this innovation exercise in the organisation is a major exercise in change management, and therefore it has to be planned/implemented with the utmost care and precision. There must be extensive planning in the area of project management i.e. the setting up of a progressive group of managers for the phases of the project. The following are some of the strategic operational issues to be considered; estimated return on investment, estimated capital invested, impact on other areas of the organisation, logistical issues, cash flow issues, staffing issues, and promotional issues.
2.8 There are alternative ways to achieve innovation; ways that may be more time and cost effective and also reduce the various risk factors (these are more accessible to large plc’s than SME’s). Some of these are:
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Outsourcing: Hiring outside organisations to do the work. The advantage being you can choose the best in the field. The disadvantage being this may prove costly.
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Buying licences: This reduces the technological risk factor.
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Partnership: This helps cut the commercial risk.
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Universities/public funding: This is a good way to share ideas and reduce the overall risk factor.
2.9 Funding for innovation has to compete for a scarce amount of resources available in the company/organisation. Therefore there is an element of opportunity cost, and thinking long and short term. Spending on innovation is just one of the many areas of the organisation vying for the limited funds. Others include; marketing, value chain demands (people, processes, equipment, plant), control systems (IT, security), and maintaining/upholding various standards. Senior figures in the organisation need to consider all the factors in order to allocate funds in the most efficient and effective manner. They must take into account current wealth making capability with investments that will safeguard future wealth making capability. This is of paramount importance in order to avoid (extreme case) the fate of industries such as the nylon shirt industry which is obsolete now. This dual role of safeguarding current and future wealth making capability is something that must be handled with the right balance for the organisations long and short term success.
2.10 The considerations detailed above are ones that will apply to some degree to large plc’s, SME’s and Individual inventors, but with a different balance and nature for each one. The main extra differences/issues that the three have to address are detailed below.
2.11 Large Plc: A Large plc, by nature is large and has a lot of financial clout and resources available. Therefore it can afford to have a separate R & D department, with its own specified budget. They can put specialist people into the R & D project/department to handle the innovation. Also because it is a large organisation the risk associated with the creation of an R & D department to create innovation for the future may not be too detrimental. The organisation can afford to make mistakes and swallow the financial loss and still stay in business. Avenues such as outsourcing the innovation are also more open to large plc’s as they have the financial capabilities to handle these. It recognises that current innovation funding (through R & D) is essential for future wealth creation, even if it is seen as a drain at present on the financial books. Therefore the balance between maintaining current wealth creation and ensuring future wealth creation is very achievable. The major problem (apart from the ones discussed in earlier parts) is when the organisation is going through hard economic times, when it’s usually R & D that is traditionally one of the first areas to suffer cutbacks. This can be severely detrimental to the long term survival/success of the organisation.
2.12 SME: An SME is maybe the group (of the three) that has biggest need not to get the innovation process wrong due to the risk factor involved. It has the dual problem of surviving (making money on a day to day business sense today) and innovating for the future, so it does not lose its competitive edge and risk becoming obsolete (and closing down). However this balance is difficult to strike, in terms of the allocation of resources (time, money, manpower, etc) between both essential areas; as both are essential to the long term survival/success of the organisation. By its nature SME’s have a limited (scarce) amount of resources as compared to a large plc. They must use all resources that are available to them, especially expert hired help e.g. legal, financial, IT, design/engineering, etc. This is short term help but will ensure that the organisation is on the right path; a costly necessity at times. SME’s (usually) haven’t got the safety net of large plc’s (where they can afford to fail some of the time), SME’s really need to get it right the first time or they could go out of business. Therefore it is essential they successfully balance current wealth generation with innovations that create future wealth. But as discussed earlier (an advantage a SME has over a large plc) there are fewer objections to change (compared to a large plc) as usually the person championing the change is top management.
2.13 Individual Inventor: The Individual Inventor can spend all his time on the innovation side as he’s not running a business. His sole purpose is to innovate (invent). Therefore the balance is totally about concentration on innovation. He is in the process of achieving future revenue/prosperity and does not have any current revenue prosperity to worry about. Therefore he is free to innovate as he sees fit, but he is by nature an inventor (maybe and entrepreneur or intrapreneur) and therefore will have the standard difficulties that come with this. He must be everything to his work. Be completely multi-skilled if he is to innovate and be commercially successful. He must be the project champion, be totally engrossed in his work, to the point of obsession. Being totally focused and at times disregarding the feelings of others. He must be fiercely protective and extremely persuasive. He has nobody to motivate or push him in the right direction, and this can be a problem as he could be ‘going up a blind alley’. Therefore he may need a ‘mentor’ figure as a source of guidance and support. All the rewards or on his head, as well as all the problems/issues that come with inventing and being entrepreneurial/intrapreneurial.
2.14 Conclusion: Firms must always expect change, and put in place the relevant infrastructure to adapt and compliment the ever changing environment/economy. Organisations must develop their long term thinking and always consider it when making corporate decisions, especially in times of crisis where innovation is usually one of the first areas to suffer cutbacks. Innovation that creates future wealth is just as important as the company’s current wealth creation, and this must be taken into account at all times to ensure long term success. In conclusion I feel vision, strategy and objectives are the bedrock for managing innovation and change, and if firms follow the steps illustrated in this report they will go some way towards ensuring that they have more chance of having success in future innovation attempts, and in turn ensuring their long term survival/success.
Bibliography
- Innovation and Entrepreneurial Studies Lecture Notes
Books:
- ‘Excelsior –The Amazing life of Stan Lee’ by Stan Lee and George Mair (2002)
- ‘Smart Luck (and seven other characteristics of successful entrepreneurs)’ by Andrew Davidson (2002)
- ‘The Millionaire Mind’ by Thomas J Stanley (2000)
- ‘Managing Technological Innovation – Fourth Edition’ by Brian Twiss (1995)
- ‘Winning through Innovation: A practical guide to leading organisational change and renewal’ by Michael L. Tushman and Charles A. O’Reilley III (1997)
- ‘The Management of Innovation’ by R. C. Parker (1982)
- ‘Innovate Through Technology’ by Charles Parker (1989)
Websites:
- http://www.awn.com/mag/issue5.11/5.11pages/rogersslee.php3
- http://www.findarticles.com/cf_dls/m5072/4_21/53988601/p1/article.jhtml
- http://www.salon.com/people/bc/1999/08/17/lee/
Appendix