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Why Do Entrepreneurs Innovate Better Than Managers? 134

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.'"
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Why Do Entrepreneurs Innovate Better Than Managers?

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  • by Anonymous Coward on Sunday January 13, 2013 @01:04PM (#42575159)
    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".
  • Obvious (Score:5, Insightful)

    by egcagrac0 ( 1410377 ) on Sunday January 13, 2013 @01:04PM (#42575165)

    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.

  • by smpoole7 ( 1467717 ) on Sunday January 13, 2013 @01:08PM (#42575183) Homepage

    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. :)

  • Re:Obvious (Score:5, Insightful)

    by captaindomon ( 870655 ) on Sunday January 13, 2013 @01:13PM (#42575227)
    Entrepreneurs have also put in a lot more personal capital. If the manager fails, even if he loses his job, he gets a new job. If the entrepreneur fails, he loses his life savings often.
  • Wait, what? (Score:5, Insightful)

    by Xugumad ( 39311 ) on Sunday January 13, 2013 @01:24PM (#42575351)

    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.

  • by click2005 ( 921437 ) * on Sunday January 13, 2013 @01:24PM (#42575357)

    Managers will look at how much money it'll make and very little else but entrepreneurs will try something because it seems like a good idea.
    The profit/loss for a manager will be a few percent (depending on the market & hollywood accounting) but the entrepreneur will make or lose
    a lot more. Most people seem to forget that for every successful entrepreneur out there you'll find 10 who failed or got stepped on by someone else.

  • by Anonymous Coward on Sunday January 13, 2013 @01:33PM (#42575421)

    The entrepreneur is an explorer, while the manager is a general tasked to occupy a piece of land.

  • by gestalt_n_pepper ( 991155 ) on Sunday January 13, 2013 @01:56PM (#42575561)

    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.

  • by PPH ( 736903 ) on Sunday January 13, 2013 @02:01PM (#42575611)
    "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."
  • by mbkennel ( 97636 ) on Sunday January 13, 2013 @04:55PM (#42576755)

    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?

  • by __aaltlg1547 ( 2541114 ) on Sunday January 13, 2013 @06:28PM (#42577281)
    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.
  • by Nanosapien ( 1928644 ) on Sunday January 13, 2013 @06:43PM (#42577381)
    I vote for option 3: Converse with the employee and explain your reasoning for doing A, ask him his reasoning for doing B (if he didn't explain it when he approached you), discuss both options, and end with the fact that the decision has already been made and keep an open mind in the future. Whether you're managing a few people or many, a manager ought to be open to discussion with employees, to accept constructive criticism, and be able to explain reasoning behind decisions that they make. This is good management. Sadly, not all managers are good managers.
  • Re:You An MBA ? (Score:3, Insightful)

    by JimCanuck ( 2474366 ) on Sunday January 13, 2013 @09:33PM (#42578267)

    A manager gets paid to manage, and in the case of companies that run R&D labs and promote innovations, their job is to recognize a good innovation over a bad one from their employees.

    I can "innovate" a toliet with a back scratcher, doesn't mean a company should invest $10 million dollars to design and build thing thing commercially when the total sales of the item will be $10,000 and that is only because you sold two of them at $5,000 a piece.

    Reality and life must set in before proper innovation and application of that innovation can occur.

    And no not a MBA, I'm not a bean counter, I'm just a realist.

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