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Why Do Entrepreneurs Innovate Better Than Managers?
netbuzz writes "New research from MIT suggests that entrepreneurs innovate better than managers not because they try more often but rather because when they do try they apply more of their available brainpower to the task. 'We found, somewhat surprisingly, that managers and entrepreneurs did not differ in the probability with which they would undertake explorative (potentially innovative) courses of action. But when entrepreneurs did select explorative tasks, they used both the left and right sides of the frontal cortex of their brain whereas managers only used their left parts of the frontal cortex,' says the lead researcher, MIT Sloan School of Management Visiting Prof. Maurizio Zollo. This is an important difference, he notes, 'because the right side of the frontal cortex is associated with creative thinking, involving to a larger extent emotional processes, whereas the left side is associated with rational decision-making and logic.'"
coz they get more excited?
It's often easier to get funding or buy-in if you're genuinely excited about something rather than thinking dispassionately "this is a good thing technically".
Most managers are tasked with creating stability and predictability.
Most entrepreneurs have no such commission - the goal is to make money. It's easier to take risks in that pursuit.
The entrepreneur starts the business, makes it successful, then brings in a PHB to watch the money and keep it running. This has been the case for as long as there have been businesses.
Entrepreneurs tend to be creative, driven, and willing to work around the clock. They also tend to be terrible at the "boring" things (like money management). They're often terrible at details, too.
This same basic principle works for established businesses, too. I worked with a company that turned around radio stations many years ago. We'd send in a "hit" team to do the makeover, then put in a PHB to run it after it was successful. Likewise with restaurants: when a new eatery opens, they send in the "A" team to make sure everything is perfect. A few months later, if the restaurant takes off, they send in a "detail" guy to keep it running and making money.
I wouldn't have thought that it'd take a study to discover something this obvious, but it's nice to see it confirmed scientifically. :)
Cogito, igitur comedam pizza.
So an accountant hand-picked a dozen "entrepreneurs", and decided that the squiggly MRI images are better than the other hand-picked "managers"?
Entrepreneurs work to meet their objectives. Managers don't have a clue.
Perhaps managers need to be more focused to get their job done.
And let's not turn this into an argument about which style of thinking is superior. A thing is superior to another only give a particular goal and context. Some forms of thinking best in one context are deadly in another.
The key to a successful organization is making sure each kind of thinking finds appropriate application in a proper context and that they ultimately work together.
News to me. Managers today are bean-counters, controllers, MBAs. They cannot even lead, how would they ever innovate or have any kind of "vision"?
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
If you are an entrepreneur and you are not creative ... well you are out of a job FAST. Infact, most entrepeneurs are out of a job fast regardless. You only hear or study about the few successful ones.
A manager is not being paid to be creative. He or she is being paid to babbysit and attend meetings all day. Ok, I am being bashful here, maybe there a few good managers, but not from what I seen. There is a reason why managers get paid less then successful entrepeneurs by a large amount of money. Their ability to bring in money/value is limited to their scope of what they are in charge of.
Entrepeneurs on the other hand change the world for millions of people.
http://saveie6.com/
Most entrepreneurs sink without trace.
Less meetings.
That's a completely satisfactory answer to TFH and TFS, and no further discussion is necessary.
In my experience (30 years of R&D/start-ups), it is frequently the case that the entrepreneur is a
technical designer, engineer, sw developer, researcher, etc., while the manager is not. It is not
surprising that the former more frequently innovates than the latter.
In a surprising number of cases, the manager is where s/he is because they were a poor innovator
and rose up into management, while the successful innovator stuck to what they were good at.
I have known some fantastic managers who were also awesome innovators, but they were infrequent
enough that I enjoy working with them when they did occur.
I don't even understand the question.
Why would managers be innovative? You might as well ask why managers aren't great chefs; that's not what they do.
This sounds to me a little like some of the management worship that's going on these days, where those who work in management presume they're doing an inherently harder job, or simply that they're more skilled than non-management. So far I see little evidence to suggest management is inherently more difficult than any other mentally-focused skilled job.
Simple, it's much much easier to do something amazing once then it is to do it over and over again. A failed entrepreneur means you don't hear about him, a failed manager means the closer of an already established business. Innovation implies something new which in turn implies risk. Therefore, the greater you innovate, you greater risk you expose yourself. Such risks are much easier to deal with when you have less to lose and when it's only over a shorter period of time.
Innovation can revive a company and propel it further but there are good examples when it also have bite them just as much. If it takes 3 failed entrepreneur (different products) for 1 to succeed, can a single company handle 3 failed products for 1 to make it big? It's only logical already established business take less risk in general.
Really, the two are standing on different views, one already in an established market, one much break into a market where alternatives may already exists (requiring innovation to give them the edge to succeed).
Managers manage. They are hired to manage a company/group/project, not to create a new company/group/project. Also if someone calls themselves a manager, they are psychologically predisposing themselves to managing, not creating.
While the word Entrepreneurs evokes creating and innovating.
In the same way if you hired a Software Engineer you will get different results on the same tasks as if you hired a Programmer. Both because different people will apply and you will likely will have a differently worked list is responsibilities, but also just because of the differences in the title.
Troll is not a replacement for I disagree.
that a self-taught electronics enthusiast is better than a school-created engineer. You can't create what isn't there just by going to a building with expensive textbooks in it.
The article doesn't answer the question. It answer how entrepreneurs innovate better, not why.
Your tag would suggest that I shouldn't have modded your comment interesting. But it was, so I did.
I too have posted a controversial comment and had it modded insightful and troll in equal numbers. Is there a better forum system than the /. one? Is meta-moderating just too onerous?
No.
This is a trick question, right?
My wife doesn't listen to me either...
Having seen creative managers, and logical managers, I'd take the logical ones any day. For an entrepreneur (or otherwise leader) you expect them to come up with a bold vision and creativity.
IMHO a good manager shouldn't do those things too much and rather use those skills from their team and organization. Not because a manager can't, but because if he gets involved with his own ideas too much, it clouds judgement.
Simple as that. Managers manage. Entrepreneurs are leaders. They lead. When you manage something, you basically want things as they are. When you lead, you want things as YOU like them to be.
Managers are often lousy leaders and leaders are often lousy managers.
Exceptions do exist.
Don't fight for your country, if your country does not fight for you.
In a large corporation, perfectly daft decisions get made daily as managers try and jockey for position and cover their asses. Actual innovative work comes fourth or fifth level down in priority, and is only done when absolutely necessary with a mandate from above.
And so, IT resources are scattered across the globe, rather than in the building. Purchasing $100.01 worth of cables goes through a three week approval process. Mission critical departments and server assets are suddenly "orphaned" with no single point of authority. Witless HR drones write job requirements that ask for "5 years experience in Windows 8 App programming." The managers who implement these changes get their bonus for cost savings, and then are gone in a year, never having to live with the consequences.
So what's the point in having a good idea, or being innovative in those circumstances when anything that doesn't server the political purposes of a manager gets quashed even before it's started?
An entrepreneur, in contrast, tells the IT person to go down to Best Buy and pick up the cables and give the bill to accounting and let them sort it out, the servers are attended to. Employees are selected for real skills by people who can reason and think and bonuses get linked to real improvements and productivity, not just what can be described in a bean counter's spreadsheet. The entrepreneur has to really perform. All a manager has to do is stay in place.
Please do not read this sig. Thank you.
A manager does not have to innovate very often - a so-called "cash cow product" may do fine in the market, and remain a profitable sell for years, without anything substantial being changed about the product. If and when something needs to be changed - when the product is about to enter the decline phase of its lifecycle - there are people you can hire with cash, whose job it is to figure out any changes/improvements to the product. The manager will not do this work personally - he/she will delegate the task to people trained to perform just that function. The most a manager will do is to apply some common sense thinking as to whether the "new product" is going to be a big seller or not. ---- Your average entrepreneur on the other hand has to develop an idea from absolute infancy to marketable maturity. That takes a lot of brainpower, and especially so if there is little or no money at the inception for specialists to be hired with. In many cases, the entrepreneur will perform 3, 4, 5 different roles in the development of the product. Inventor. Prototyper. Tester. Strategist. Of course doing all that stuff yourself will keep both of your brain lobes busy. Unlike the manager, there is nobody to delegate vital tasks to, and you have to wear many hats at the same time. The manager, on the other hand, has many people he/she can delegate vital tasks to. He/she merely has to pick the right people and assign them the right tasks to get a good result. With the entrepreneur, a lot will fail or succeed based on how well the entrepreneur handles multiple active roles without failing in one or more of them. Thus the entrepreneur has a higher and more diverse cognitive load than the manager. That makes sense, doesn't it?
Why did the chicken cross the road? Because Elon Musk put an AI chip in its head.
"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."
Have gnu, will travel.
OMG! They pick 63 people and run this nonsense experiment and everyone trots out their own biases regarding 'managers' versus 'entrepeneurs'.
lame.
The best secretaries and exec assistants are not employed to help a manager do their job-- and their job as parent stated, is NOT to innovate or make waves but to climb the corporate ladder - and naturally, proper procedures must be followed because their jobs have largely turned into enforcers of foolish policy bloat. If you've seen top secretaries and exec assistants at work you should realize they do a bulk of the actual work.
Also, Execs can more easily take credit for the work and ideas of others than a manager. The Entrepreneurs get ideas and prototypes from the whole team they just have to pick and choose from the best position to get many ideas; maybe even combine things from multiple sources in some obvious way (that is, obvious if given their perspective of the situation.)
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You probably didn't read the article... You should be an informed skeptic, not an ignorant skeptic. Being skeptical and ignorant is silly.
It is the article and the post that says that entrepreneurs innovate better. They are referencing "common knowledge". Based on later quotes in the article the research does not appear to make any such claim. The research just seems to be that they are creating more emotionally. Whether this is an advantage in anyway is an open question. Certainly you can hardly be impressed by innovation of the "snuggie". It is possible that thinking emotionally and artistically might allow an entrepreneur to think further outside the box. If so, then there could be a wider range of quality from entrepreneurs, and thus some of the biggest innovations. However, I tend to believe the common knowledge is because of how memorably and notable it is when an entrepreneur becomes success with a new product. When companies started producing a new products, such as USB thumb drives or whatever you might think of, it tends to be considered more of an inevitable or natural progression than as innovative. Perhaps there is a feeling that a group can't be innovative and that managers do not come up with ideas, and rather idea are formed by the group. Perhaps the entrepreneur is noteworthy because he is the exception and manages to forge a company against long odds. Maybe it is just because he makes a big deal of himself. I am sure sometime the common knowledge comes from ideas that companies rejected but went on to be successful.
...Do the same tests on Chinese vs American scientists when they develop hypothesis and make plans/estimations for future experiments....
That may be very revealing. People in science widely acknowledge that the Chinese training form creates diligent uninspired thinking that focuses on large experiments making small jumps in progress, and that American scientists are more creative and less methodical, doing smaller experiments that make larger jumps.
This is a generalization. Not an absolute.
I consider myself to be an innovative manager. I have great ideas and those ideas have a lot of times in the past made the companies I've worked for a ton of money. This happens all the time and I don't think you understand the real problem. The problem isn't that managers aren't innovative, it's that managers don't get anything for their innovations. As an innovative manager I run into a lot of obstacles in my career. First and foremost I have never received even close to 1% of the profits from any invention I have ever came up with for an employer. At my last job all I did was come up with new ideas to make the company money. I have made companies millions of dollars in profits with my ideas. I have implemented ideas that have saved hundreds of thousands per month in running costs. Afterwards I did not get a single raise, bonus or sometimes even acknowledgement of that extra income. It was my job, they were already paying me for it. As a sub 6 figure "senior" employee I feel a huge push to not mention my ideas to my employers. If the idea costs money to implement, it usually gets shut down before they even think about it, because most people aren't willing to put their own money on the line for a risky idea they didn't come up with. When it only costs a little money, or even a free of cost change in procedures that could cut costs by dramatic amounts, employees are usually thanked and forgotten, if they are even thanked. Decades ago if an employee came up with a method to save a company $300,000 a month that employee would be pushed to the top of a company and probably even made a junior partner and queried for new ideas, not today. So what do innovative managers do now? We look carefully at our non-compete agreements and we focus our innovative brains in a direction that does not conflict with it. We do our job as well as we can, but the second we leave the building our brains are thinking about our own inventions, our own companies and how we can get them funded. And once we get the cash to start something, we leave, we become entrepreneurs and we break the logic of this topic. The only difference between an "Entrepreneur" and a "Manager" is that the entrepreneur quit his day job as a manager to focus on his own idea. So what do I do now? Well
roman_mir is a dogmatist with a slavish devotion to constant appraisal of the very powerful and wealthy (beneath a thin veil of "smash the state, but not too much"), and his rants are well deserving of being modded down. The same goes for his sock puppet accounts.
Because we're NOT Control Freaks, simple as that.
This is actually kinda silly. Sure someone who is a manager might be more inclined to organize, but really, this is entirely governed by what each person is good at and like doing.
There are techs who are very good at training others and in sales.
It is even possible to have someone working for the RIAA who is a musician, though it's highly doubtful.
Some like boxing in people because it makes it easy, but we all have activities we like and dislike, good or not. Which may very well change.
... entrepreneurs have SKIN IN THE GAME.
That's why.
Those who innovate use the creative side of their brain more than those who don't. Is that a surprise?
Entrpreneurs have a corpus callosum, which enables both hemispheres to communicate, and even to cooperate in problem solving. Presence of a corpus callosum (even in vestigial form) precludes a successful career in management. Presence of an anterior commisure does not prevent one from rising to middle management, as it is not involved in higher thought, but may prevent entry to the executive levels.
Those who can make you believe absurdities can make you commit atrocities. - Voltaire
If all people thought like you, we would have managers managing the caves and trees we lived on. But hell, most of population are dumb fucks who believe in the religion of money, so they grow their "leaders" from that pool of ignorance.
We define an entrepreneur as somebody with above a certain level of success as a manager. While a valid question it seems somewhat ill framed. The real question is, "what makes successful managers?" For the answer to be, "people that think about things more," is hardly surprising.
Clever people less likely to end up in highly structured career paths. More news at 5.
You must be a corporate drone, complete with morgage, kids, iphone and a gas guzzler.
I once developed a language and compiler for two years and lived on a shoestring. I used my saved money, I had no kids and no GF. The compiler and the language spec got done, but I found out selling is much harder than inventing.
So, in the first part of adulthood everybody can be an entrepreneur. It requires discipline and the ability to save.
Here is my project:
http://sourceforge.net/projects/sappeurcompiler/
I also did a text chat system for mobile phones (J2ME based) earlier and found that you can actually be TOO EARLY as an inventor. People were scared to hell then about the cost of very narrowband internet communications.
I do think it will be similar with Sappeur - at some point there will be a major memory-safe language without a VM and GC. Most Software Engineers are actually very, very far from being enlightened. They know their language and defend it against any argument to the last drop of blood. I guess they don't want to spend time to learn all the intricacies and absurdities of a new compiler. Which I can understand to a certain degree
entrepreneurs are your vigilante's
manager's are the police
one goes out and seeks justice "from their view"
the other tries follow procedure to the "letter of the law"
that is, entrepreneurs tend not to give a shit about the ramifications til long after they get the result they want
Yes, the original article was written by 4 authors, 3 of which were business professors (including the lead author). This represents "interdisciplinary" New Age research at its worst.
MIT's study is flawed. Entrepreneurs aren't better innovators than managers. Successful entrepreneurs may be better innovators, but not entrepreneurs taken as a whole. Since over half of all small businesses fail, if you include those numbers in the base, then entrepreneurs are not more successful.
To succeed, you have to first have an idea. Then you have to be able to capitalize on that idea. Unless you are already very successful, most entrepreneurs have to bring in outside capital which means they also give up some (to a lot) of control of their company, or at least their idea. At that point, they are in the same position as a manager, who has an idea, but not the control of that idea either, because the rest of the organizaiton takes over.
So, either compare successful entrepreneurs to successful managers or compare all entrepreneurs to all managers, but don't mix and match.
Has anyone else tried to pull the original source material? I can't find the MIT release, and this paper linked to from the bottom of the networkworld article* doesn't seem to have the information I'm looking for. The skeptic in me wanted to find out 1.) what they chose for 'risk' model behavior - the 4 arm bandit choice between 4 slot machines with different pay out ratios; 2.) how they operationalized risk - 'explorative' behavior was when they chose a different slot machine from the previous trial, and 'exploitative' when they chose the same slot machine as the previous trial; and perhaps most important to me 3.) how they classified a manager vs an entrepreneur. Could not find anything about that in the methods section. A keyword search for 'entrepreneur' returns the first hit in the analysis section when they describe performing a (presumably post-hoc) test on the locus coeruleus in entrepreneurs. No real justification, or qualifications......
Also of concern is that their subject pool was drawn from managerial experience in the diverse fields of "marketing, human resources, production, R&D, or finance." As a scientist, I'm not well versed in the business world, but how similar do y'all think decision making in these fields might be?
*http://www.croma.unibocconi.it/wps/wcm/connect/3e3146804cadaef7a443fc0f7bdc7be0/laureiro_12-02.pdf?MOD=AJPERES&useDefaultText=0&useDefaultDesc=0
i don't know karate, but i know ca-razy
Simple as that. For innovation you have other people.
People who tend to be drawn towards risk-taking, who have tremendous focus, and who are excellent self-motivators tend to become entrepreneurs. People who are organized (and good at organizing), who have a talent for seeing things at the macro level, and who are good at sort of assembling and handling lots of moving parts tend to become managers of one kind or another.
And in reality, successful entrepreneurs are also good at managing people and resources, just as great managers are creative problem-solvers and aren't afraid to think outside of the box. There are exceptions, of course, but the Bill Lumbergh manager stereotype and the sort of Steve Jobs/Bill Gates obnoxious genius stereotype don't seem to be the rule.
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Are the investors, themselves, "All In"? Do they put all their money for a fund plus their own house in one investment? Obviously not, they know that most startups fail.
Making the entrepreneur "more motivated" such that his life is nearly permanently ruined by a highly probable failure and unable to try again ever (if you are a normal person who now owes a judgement for $350,000 with no collateral and you haven't had a steady job for years and are likely to continue to be unemployed for at least a year, your life sucks and you will be divorced upon) does not not improve the odds of the outcome. More effort frequently does not translate into more success past a certain point. There is a large contribution of luck which cannot be managed or innovated around.
Do investors want to select for delusional entrepreneurs without a sense of the realities of the world?
Why Do Entrepreneurs Innovate Better Than Managers?
Because they are entrepreneurs, not managers, perhaps?
Many years ago, on the order of magnitude 30, a clinical research paper showed that a necktie critically reduces the blood flow to the brain thus reducing oxygen to the brain. :)
The article mischaracterizes MIT's research. The original paper did not say that entrepreneurs "innovate better." It said that they used more of their brains. To judge whether they "innovate better" you would have to measure OUTCOMES, which the MIT research did not do.
This is some sort of ego stroking for business people.
The main goal of both manager and 'innovator' is keeping your job, and if at all possible, by doing that job well. The 'innovator' does so by 'innovating, the manager does so by managing.
Only the innovator's result of labour has something to do with the actual product or service. Only the manager that understands that his job is also the actual product or service could acutally innovate.
Why Do Entrepreneurs Innovate Better Than Managers?
If you don't know the answer to that, you're probably a manager.
managers are making decisions based on an established system and protocol, entrepreneurs are creating a new system, as well as how to act within the system.
A manager's job is holding the status quo, not exploring new ground.
1: Superior Motivation. Entrepreneurs either have their reputation at stake, or their livelihoods. Managers have neither.
2: Training. Managers are trained to avoid risk by laying down and following processes and procedures. Entrepreneurs aren't as good at quantifying the risks associated with any given move, however, most managers, for reason #3, attempt to avoid uncomfortable changes to the status quo once established. That's a fatal flaw, as the lack of maneuverability and aggressiveness can result in your competition exploiting it.
3: Superior Pay. If you're lucky as a manager, you get a bonus and a raise at years end. If you aren't, you work 60hrs per week to get what you were paid last year. Why should you care?
4: Lack of conventional knowledge. "Naw, that's stupid, it'd never work", true about 95% of things, wrong about 4%, and horribly wrong about 1%. That 1% will kill you.
5: Better money management. In most organizations, if you ask for a $20 tool, you get told it's a waste of money. In a new company, 1 individual is empowered to do the work of 10 with the right selection of equipment. If you're going to buy something expensive, you are going to make really, REALLY Sure you've got the right tool, and a thorough plan to use it. See #3 for the reason why large, enterprise systems are often designed poorly, bought, then fail.
On the contrary, managers simply have less brain power to actually commit to such things. They're more preoccupied with the trappings of their life - golf, their new Cadillac SUV, where they're going to lunch, football season, more golf - to dedicate much brainpower to things like work.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
You know its true because they have fMRI images. These have become indicators of bad sensationalist research. Stop feeding the neuro trolls. http://www.ted.com/talks/molly_crockett_beware_neuro_bunk.html
Is it because being an entrepreneur is about innovation, and being a manger isn't?
You'll find most entrepreneurs aren't any smarter or more interesting than managers, but you will find a difference in how they go about 'building something'. Entrepreneurs start from the ground-up, while Managers take what's available and move it in the right direction. It's easy to quickly change if you're a new, light weight company, but corporations have a lot of people and paperwork that has to be chewed through first to get to the same place. Of course the Manager will have a job next year, while the entrepreneur takes a larger risk.
Entrepreneurs achieve greater innovation because they take many risks. They fail a great deal of the time, too, so they have to know how to externalize risk or game the system so that risk is not felt as directly. "Screwed up? Write it off and try something else!"
Managers, on the other hand, are typically *in* the system with genuine and figurative audits coming from up the ladder, their employees, and their colleagues. In management, risk has less reward potential while steady (bearish) gains are better for the long-term health of one's employment. "Screwed up? Better hope your performance review isn't crapped out."
Because managers learn from common knowledge and try to adhere to popular beliefs and actions in order to maintain their "secure" jobs.
Sorry to be blunt, but it is what it is.
In any large organization, there are levels of bureaucracy. To get a new process or product approved, you usually need to go thru 7 or 8 layers.
SUCCESS requires getting 7 or 8 Yes answers in a row.
Failure means only one of those layers of bureaucratic managers has to say No.
I worked for a few high tech companies.
I have seen as these companies mature -- MBA's push out the creative thinkers as they and their managers are linear thinkers.
Innovation is non-linear. as most managers are linear thinkers if that -- see non-linear thinkers as threats to their promotion. Thus innovation is killed by these sub-linear-thinkers -- Was recently employed in a cloud computing firm that pushed out all the original developers and replaced them with cheap programmers from India who were trained in MS apps :O
The product base was based on RT LINUX/UNIX
I have seen this insanity time after time in many high tech companies over the last 20 years.