Dr. G. Richard Patton is the featured speaker. He has been a faculty member at the University of Pittsburgh's Katz Graduate School of Business since 1976, where he teaches courses in entrepreneurship, innovation, and strategic management. He was also the president and CEO of an investment fund that specialized in early stage venture capital investments. The presentation overview includes topics on entrepreneurship, innovation, strategic management, and examples from companies like Google and GE. It discusses the importance of innovation, different types of innovation, traits of successful innovators, and building a systematic innovation capability in organizations.

1. EMBA Worldwide
Are you ready? You
can be.®
www.emba.pitt.edu | 412-648-1600

2. Today’s Featured Speaker:
Dr. G. Richard Patton
Specialization: Organizations and Entrepreneurship
Dr. Patton has been a Katz faculty member since 1976, teaching
courses in entrepreneurship, innovation and strategic
management in graduate and executive programs. He has also
taught at Carnegie Mellon University’s Graduate School of
Industrial Administration and Chulalongkorn University’s
Graduate School of Management in Bangkok, Thailand as well
as MBA programs in Europe and South America.
Dr. Patton was President, CEO, and Director of the Western
Pennsylvania Adventure Capital Fund from 1997-2013, an
investment fund that specialized in early stage venture capital
investments in the Western Pennsylvania area. In addition to the
fund’s portfolio companies, he is active in private equity investing
and has been involved in the start-up and financing of numerous
companies, serving on the Board of Directors of multiple
companies.
www.emba.pitt.edu | 412-648-1600

3. Overview
• Entrepreneurship and Strategic
Management
• Innovation Overview
• A Model of Innovation capability
• Google
• General Electric Corporation
3

4. What is Strategy?
Strategy is the direction and scope of a
business over the long term in order to
achieve competitive advantage through
its configuration of resources within a
changing environment, meeting the
needs of markets and fulfilling
stakeholder expectation.
4

5. “SUCCESS”
• Strategy must match environment
• Capabilities must match strategy
Environment
Strategy
Capabilities
5

6. Environment
• Macro Forces
– Social, political
– Economic, technology
• Competitive Forces
– Customers
– Suppliers
– Competitors
6
Capabilities
•
•
•
•
•
•
Financial
Physical
Technology
Systems
Human
Culture

7. Strategic Equation at Work
• Environment
Strategy
• Repetitive
Stable
Precedents
Capabilities
Custodial,
Reject change
Entrepreneurial
• Turbulent
Aggressive
Flexible ~
Innovative
7

8. What is Entrepreneurship?
• Individual action…….
• Creating or recognizing an opportunity and
pursuing it regardless of the resources
controlled…………
• Creating something out of nothing……….
8

9. What is Entrepreneurship?
• A management style…….
– Risk taking
– Proactivity
– Innovation
• Integration of entrepreneurial skills into a
large organizations strategic vision to
nurture a climate of creativity and
innovation…intrapreneurship
9

10. Traditional Managers versus
Intrapreneurs
(Gifford Pinchot)
Traditional Managers
Intrapreneurs
Primary Motives
Power-motivated
Traditional corp. rewards
Self-motivated
Freedom, access to resources,
rewards
Decisions
Agrees with those in power
What does boss want?
Gets others to agree to private
vision
Time Orientation
Responds to quotas and
budgets
Urgency to meet self-imposed
timetables
Action
Delegates.
Supervising and reporting
Has a bias for action Delegate
when necessary
Courage/Destiny
Sees others as in charge of
destiny/outcome
Self-confident and
courageous
10

11. Traditional Managers versus
Intrapreneurs ( Con’t.)
Traditional
Managers
Intrapreneurs
Attention Focus
Primarily on events inside
corporation
Both inside and outside
sells insiders on need, focus
on customer
Risk
Careful and risk adverse
Moderate and calculated
risk-taking
Status
Statue Symbols
Treasurers symbols of
freedom and achievement
Failure and mistakes
Avoid mistakes and
surprises
Learn from mistakes but
manage visibility
Attitude toward system
Sees system as protective
Dislikes system but learns
to manipulate it
11

12. What’s Different about
Corporate Entrepreneurship?
• Agency Issue: representing interests of a
broader set of stakeholders
• Constrained Opportunities: leverage and
build
• Organization Reality
– Implementation Focus
– Short-term Pressures
12

13. Leverage and Build
Reality!
13

14. Importance of Innovation
• 65% of CEO’s in a BCG study rated
innovation as one of their top 3 priorities
for the next ten years.
• 2/3 of CEO’s in AMA survey “extremely” or
“highly” important.
“The inability to innovate results in decline
and extinction.” -Peter Drucker
14

15. Importance of Innovation
• …as the business world becomes increasingly
complex and still more competitive, companies
are turning to innovation as one of the few
durable sources of competitive advantage…
• …the necessity of innovation is now universally
accepted, but beyond their enthusiasm for bright
ideas, most leaders know that to be successful
over the long term they have to develop a strong
innovation culture…
15

16. Drivers of Innovation
• External:
–
–
–
–
–
Respond to customer demands
Technology
Rate of change ~ product life cycles
Collaborations/alliances with customers
Globalization/Increased competition
• Internal:
– Revenue/profit margins/market share
– Operational efficiency
16

17. Types of Innovation
• Business Model or Strategy Innovation
• Process or Operational Efficiency
Innovation
• Products/Service/Markets Innovation
17

18. Sources of Innovative Ideas
Employees
Business Partners
Customers
Consultants
Competitors
Associations, trade shows, conference…
Internal Sales/Service
Internal R&D
Academia
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
18

19. Traits of Successful Innovators

20. Traits of Successful Innovators
• Senior Management Buy-in and Support
• External and Customer Focus
– Lead users
– Market research
– Customization
20

21. Traits of Successful Innovators
• Teamwork and Collaboration
–
–
–
–
Diversity
Cross-functional
Leader support
Internal and external
• Correct Resources
– Time ~ Money ~ Priority
– Threshold of sufficiency
21

22. Traits of Successful Innovators
• Org. Communication and Sharing
–
–
–
–
All directions
Work-in-progress
Lessons learned
Collaboration tools
• Ability to Select Right Ideas
– Unit manager responsibility
– Independent reviews
22

23. Traits of Successful Innovators
• Ability to Identify Creative People
– Recruit/retain
– Train
– Stimulating environment
– Time and resources
• Freedom to Innovate – Smart Risk
Taking
23

24. Traits of Successful Innovators
• Innovation Measurement and Scorecard
– Innovation index
– Customer metrics
– Employee metrics
•
•
•
•
•
•
Customer satisfaction
Market share
New products produced
Innovation as % of revenues
R & D spending
Intellectual property
24

25. Traits of Successful Innovators
• Compensation
– Evaluation and reward models
•
•
•
•
•
Non-financial
Assignments and autonomy
Individual financial rewards
Impact in promotion decisions
Team rewards
25

26. Barriers to Innovation
•
•
•
•
•
•
•
Unsupportive culture and climate
Insufficient resources
No formal strategy for innovation
Lack of clear goals/priorities
Lack of leadership/management support
Short-term mindset
Structure not geared to innovation
26

27. Building A Systematic Innovation Capability
Systematic approach and
tools to promote idea
generation and portfolio
management
Process and
Tools
Leadership &
Organization
Entrepreneurial
Capability
Company leaders and
organization aligned around a
common vision of innovation
Culture &
Values
People &
Skills
Disciplined approach to
building innovation
capabilities across the
organization
Collaborative, open culture
and incentives that reward
challenging the status quo
27

28. The Google Example:
Marissa Mayer’s 9 Principles of Innovation
• Innovation, not instant perfection
– Launch early and often
– Google Labs
• Ideas come from everywhere
– Internal idea list and post comments
– Growth in ideas
• A license to pursue your dreams
– 20% of engineers time (50% ideas)
– 70%/20%/10% for management
28

29. Marissa Mayer’s 9 Principles of Innovation
• Morph projects, don’t kill them
• Share as much information as you can
– MOMO
– Monday Snippets
– Friday All Hands
• Users, users, users
29

30. Marissa Mayer’s 9 Principles of Innovation
• Data is apolitical
– Tests and experiments
– Metrics and measurement
• Creativity loves constraints
• You’re brilliant? We’re hiring!
– Big problems that matter
– Do great things
30

31. The GE Example:
The Jack Welch Era
•
•
•
•
20 year tenure (1981-2001)
Annual return to shareholders 23%
$380 billion increase in shareholder value
Driven by:
– Acquisitions
– Timely deal making
– Short-term product development and productivity
– Internal focus – cost cutting/efficient operations
“…a disciplined, efficient machine that delivered on its promise of
consistent growth in sales and earnings…”
31

32. The Jeff Immelt Era:
•
•
•
•
•
Named CEO 9-7-2001
Internet bubble burst
Enron and Tyco
Global political instability
Stock price decline of 60%
“ I looked at the world post 9/11and realized that over the
next 10 or 20 years, there was not going to be much
tailwind…..It would be driven more by innovation and a
premium would be placed on companies that could
generate their own profits.”
32

33. Strategic Equation at Work
• Environment
Strategy
• Repetitive
Stable
Precedents
• Turbulent
Aggressive
Capabilities
Custodial,
Reject change
Flexible ~
Innovative
33

34. Innovation Capabilities:
Making Corporate Innovation a Core Competence
•
•
•
•
•
•
•
Skills
Organizational Structures
Organizational Processes
Metrics
Culture
Systems
Tools
34

35. • Skills
– Technical Skills
• 5000 new engineers
• Enhanced status – officers
• R&D funding, long-term, focus
– Marketing Expertise
• 2000 new hires/outsiders
• CMO
• External focus
35

36. – Growth Leadership Skills – training
•
•
•
•
•
External focus
Think clearly
Imagination and courage
Inclusiveness and people
In-depth expertise
36

37. • Structures
– Commercial Council ~ best and brightest marketing
– IB Review Meetings ~ front line with CEO
– Business level forums ~ transportation growth
council
37

38. • Processes
– IB Process
– Growth Platform Process
– Growth Leader Training
• Metrics
– Organic growth 4% -> 8%
– Net Promoter Score (focus on customers)
– 5 X $100 MM IB Proposals
– Growth Leader Criteria
38

39. • Systems
– St. plans  Op. budgets Org. design
– Organizational and Leadership Review
• Culture
– Discipline
– Accountability
– Flexibility
• Tools – best practices and analytical tools
39

40. GE versus Successful Traits
•
•
•
•
•
•
•
•
•
•
Senior Management Buy-in
External and Customer Focus
Teamwork and Collaboration
Correct Resources
Organizational Communication
Ability to Select Correct Ideas
Identify Creative People
Freedom to Innovate
Measurement
Compensation
40

41. GE versus Barriers to Innovation
•
•
•
•
•
•
•
Unsupportive culture and climate
Insufficient Resources
No formal strategy for innovation
Lack of clear goals/priorities
Lack of leadership/management support
Short-term mindset
Structure not geared to innovation
41

42. Lessons
• Example of the process of “strategic Shift”acquisition-based, productivity driven
strategy versus an innovation-based
organic growth strategy
• A company’s strategic intent needs to be
matched by both organizational capability
and managerial competence….an
example of asset development
42

43. • Organizational Capability and its
development as a source of competitive
advantage
• Translating broad strategic objectives into
a program of implementable actions
• The role of managers at the front, senior
and top levels in shaping and
implementing a growth strategy
43

44. EMBA Worldwide
Are you ready? You
can be.®
www.emba.pitt.edu | 412-648-1600

45. Value Proposition
•
•
•
•
•
Our Reputation
Career Success
Worldwide Impact
ROI
Program Details
www.emba.pitt.edu | 412-648-1600

46. Pitt’s Reputation
• University of Pittsburgh
celebrating 225 years of
education excellence
• Member of the prestigious
Association of American
Universities (one of only four
in PA)
• Nearly 300,000 graduates
worldwide
www.emba.pitt.edu | 412-648-1600

47. The Joesph M. Katz
Graduate School of Business
• Founding member of the AACSB
• Second oldest executive education
program in the world
• More than 30,000 graduates in 160
countries worldwide
• Top 20 public MBA program
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48. Katz Faculty Quality
• 97% with doctoral degrees
• 97% tenured, full-time
professors
• Extensively and exhaustively
published research and actively
involved in creation of new
knowledge
• Internationally recognized for
teaching and research
• Global perspective – teach in all
three locations
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49. Rankings
• 8th program among U.S. public institutions
• 22nd overall in the U.S.
• 57th globally
- Financial Times, 2013
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50. Career Success
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51. The Katz EMBA Worldwide
program is a comprehensive
experience in business
management where you will gain:
•The international language of
business
•The ability to network yourself into
a more successful career
•The tools to strategize effectively
and lead others
•The vision to manage your
organization more effectively
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52. EMBA Curriculum
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53. Executive in Residence
•
Resource for all EMBA Worldwide students &
alumni
•
Résumé reviews, networking advice, interview
experience
•
Career advice on managing and growing within
your present firm
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54. Worldwide Impact
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55. Global Executive Forums
• Delivery of core course content in
a global context and in-depth
study through elective courses.
• Insights into regional business
practices and political, economic
and social conditions.
• Integration of global class and
enhancement of global network.
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56. Immerse Yourself
Spring 2014: Pittsburgh, PA – Global Executive Forum I
Organizational Behavior
Fall 2014: Europe – Global Executive Forum II
Business Ethics and Public Policy
Negotiations in Business
Spring 2015: South America – Global Executive Forum III
Strategic Visioning for a Global Future
Strategic Leadership for Change
Fall 2015: Pittsburgh, PA USA – Global Executive Forum IV
Faculty selected topics, to be announced
*Topics and schedule are subject to change.
**Students are subject to the rules of the Schengen Visa agreement and are expected to
have the appropriate documentation needed to travel for the EMBA program.
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57. Return On Investment
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58. Return on Investment
•
EMBA graduates received a 17.3% average
salary increase by the end of the program.
•
Over 60% of students are likely to recommend
the program to a friend or colleague.
•
Over 54% say they are extremely likely to
support the program as alumni.
-Executive MBA Council 2012
Student Exit Benchmarking Survey
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59. Program Details
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60. Program Overview
• 18 months in duration
• Classes held on alternating weekends
(Friday and Saturday every other
weekend)
• Tuition includes:
• University fees, all books and
course materials, hotel
accommodations and select meals
at the Global Executive Forums
• Financial aid:
www.oafa.pitt.edu/gradlist.aspx
• Next class begins May 2014
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61. 2013/14 Class Profile
• 71 students among the three
locations
• 13 years professional experience,
average
• 36 years of age
• 7 years of management experience,
average
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62. Industry
Sectors
•
•
•
•
•
•
•
Manufacturing
Pharmaceutical
Health Care
Technology
Consumer Products
Financial Services
Others including Consulting, Nonprofit
and Energy
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63. Requirements
•
Minimum five years full-time work experience or
equivalent military experience
•
•
Application form at
www.business.pitt.edu/katz/emba/admissions
Résumé
•
University degree & transcripts
•
•
Personal Statement (self-recommendation)
Interview
•
Two letters of professional recommendation
•
GMAT (optional in some cases)
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64. EMBA Webinars
Coming Soon!
Navigating Your Career – March 25, 10:00 a.m. EST
Presented by Ned Sherry, Executive in Residence
Available for Download
Strategy as a Wicked Problem
Presented by Dr. John Camillus
business.pitt.edu/katz/emba/webinars
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65. Questions?
Contact:
EMBAprogram@katz.pitt.edu
www.business.pitt.edu/katz/emba
www.emba.pitt.edu | 412-648-1600