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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.
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.
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.
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.
"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.
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
... entrepreneurs have SKIN IN THE GAME.
That's why.
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.
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?
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.
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.