Faculty Corner: Insights and views on entrepreneurship and innovation
Kellogg faculty, through their dedication to cutting-edge research across the business landscape, deliver timely, relevant insights on the most important business topics.
Innovation is the lifeline to any successful business, so creating an environment where creativity can flourish requires more than a clever strategy — organizations need to establish operations, procedures and structures that help empower their teams.
Read some of our faculty’s research and insights on fostering innovation whether an established company or budding startup their advice can help spark imagination to drive innovation in business.
On establishing trust as a cornerstone of innovation
An award-winning professor, David Schonthal teaches strategy, innovation and entrepreneurship with courses on new venture creation, design thinking, healthcare innovation and creativity. He also serves as the faculty director of the Zell Fellows Program, a selective venture accelerator program designed to help student entrepreneurs successfully launch or acquire new businesses.
Bold thinking fuels innovation, so it’s important for organizations to cultivate a culture where people feel safe to take risks and explore new ideas — without the fear of failure. A recent article Schonthal contributed to Inc. describes how leaders must be thoughtful about creating the right conditions for innovation to happen. “True innovation requires not just the right methods, but the right mindset,” says Schonthal. “One that enables people to offer creative, potentially risky ideas in a forum that encourages and rewards brave conversation.”
Kieu-Trang Nguyen is an assistant professor of strategy whose primary research areas include organizational economics, economics of innovation and political economy. She has examined the impact of leadership’s trust toward employees and the role favoritism plays toward firms and hometowns connected to politicians. Professor Nguyen also explores the influence of gender norms on both within-firm and economy-wide labor outcomes.
One of her recent pieces of research highlights how trust is fundamental to driving innovation. Employees who feel trusted by their leaders are more likely to take risks, experiment with new ideas and push the boundaries of what’s possible. Leaders who urge employees to “embrace failure, make mistakes, and learn from those mistakes,” as Professor Nguyen puts it, will position their companies to innovate more and better.
On rethinking research team size for revolutionary outcomes
Dashun Wang serves as the director of the Center for Science of Science and Innovation and co-director of the Ryan Institute on Complexity. His “Winning with Networks” class teaches MBA students to apply complexity thinking to business. His current research focuses on the science of science, which uses and develops tools from complexity sciences and artificial intelligence to decode the secrets of breakthroughs.
Wang alongside Lingfei Wu, an assistant professor at University of Pittsburgh, and James Evans, a professor at the University of Chicago, challenge conventional wisdom about the size of research teams. While large teams are often seen as necessary for groundbreaking discoveries, their findings suggest that smaller teams might be better positioned to revolutionize their fields. Smaller teams are more agile, able to pivot quickly and often take more unconventional approaches. In contrast, larger teams tend to build on existing knowledge, leading to incremental rather than transformative innovation.
On avoiding the acquisition trap
Niko Matouschek is the Alvin J. Huss Professor of Management who explores the economics of organizations focusing on the optimal design of decision rules and the effect of competition on the organization and performance of firms.
Matouschek and his collaborator Steven Callander from the Stanford Graduate School of Business found that startups driven by the hope of being acquired may shy away from bold, risky ideas in favor of safer, more marketable products. So, while acquisition can be a lucrative exit strategy for startups, it often leads to focusing on short-term gains rather than long-term innovation — stifling the creative nature of startups.
On the power of persistent brainstorming — your best ideas are yet to come.
Professor Loran Nordgren’s mission is to use behavioral science to make leaders and organizations better. As a behavioral scientist, Loran's research explores the psychological forces that propel and prevent the adoption of new ideas.
Nordgren and Brian Lucas ’03 PhD, a professor at Cornell University, discovered a widespread, persistent and mistaken belief that creativity drops off with time dubbing it as the “creative-cliff illusion.” “People think their best ideas are coming fast and early,” Nordgren says. Their research suggests that the best ideas emerge after sustained effort, when pushing beyond the “creative cliff,” and that those who keep brainstorming after the initial wave of ideas are more likely to discover truly innovative solutions.
On positioning your startup for investor success
Carter Cast is the Michael S. and Mary Sue Shannon Clinical Professor of Entrepreneurship and is an operating partner at Pritzker Private Capital. Carter was formerly the CEO of Walmart.com and was the founding chief marketing officer of Blue Nile, Inc., a leading online seller of diamonds and fine jewelry.
Cast recommends entrepreneurs open with a 30-second “elevator pitch” on their value proposition. In that time, investors should learn your precise target market, that market’s unmet need and how your solution is superior to what is currently on the market. “Don’t do a slow reveal. Don’t make me figure out what business you’re in over time,” Cast says. “If you can articulate your value proposition early in the presentation, I’m going to understand and then be able to relax and listen to you.”
For startups preparing to meet with investors, he emphasizes the importance of telling a compelling origin story that aligns with investors' interests and showcases the unique potential of your startup. He also emphasizes demonstrating a deep understanding of the market. “Your potential investor is going to ask you to talk about the research that led you to conclude you have product-market fit. Having real answers, real proof from the market, is critical,” says Carter.
On catalyzing innovation in established companies
A brand and innovation professional, entrepreneur (Goodles, Small Wonders and others) and lecturer, Paul Earle Jr. co-teaches the popular Corporate Innovation and New Ventures class. The intensive experiential learning pairs student teams with top corporate partners such as McDonald's, Visa, Procter & Gamble, United Airlines and Hyatt.
“Established companies have to start thinking like disruptors,” says Earle. He encourages them to focus on five key strategies including embracing a culture that values experimentation and tackling problems as if they were Sara Blakely or Richard Branson. “This kind of role-play can lead to decisions that would have been inaccessible if you’d stayed in corporate mode,” he says. “Asking yourself ‘what would Branson do?’ can spark divergent ideas.”
Jeffrey Eschbach is an entrepreneur and tech innovator, with over 20 years of experience creating new products and businesses. He is also an active angel investor who is immersed in Chicago’s flourishing startup scene as the founder of Chicago Early Growth Ventures.
Established companies often face internal obstacles that hinder innovation, such as bureaucracy, risk aversion and outdated processes. Fostering a culture of continuous innovation, where new ideas are encouraged and rewarded, is one of the five strategies Eschbach offers to overcome internal innovation barriers.
He also suggests leveraging external partnerships for fresh perspectives, “After seeing the problem firsthand, their ability to create something on target, along with their motivation, increases tremendously. They think, ‘yeah, we’re actually solving a real problem.’”
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