Organized Innovation™ for a Prosperous Economy
A little-known but very successful federal research program—and the ground-breaking principles behind it—could, if better funded, help the U.S. retain its technological edge and leapfrog ahead into new industries.
National Science Foundation–funded Engineering Research Centers (ERCs) are university-private sector partnerships that focus on such areas as data compression technologies for better transmission of digital information, the creation of new human tissue for transplants, and new methods for imaging the earth’s crust.
Dean and Professor Steven C. Currall and two co-authors, Assistant Professor Emily M. Hunter of Baylor University’s Hankamer School of Business and Assistant Professor Sara Jansen Perry of the University of Houston–Downtown, College of Business, published their research titled “Inside Multi-disciplinary Science and Engineering Research Centers: The Impact of Organizational Climate on Invention Disclosures and Patents” in the November 2011 issue of Research Policy.
Currall and his co-authors show how internal organizational climates in a university setting impact the rate of commercialization activities. Most research on the topic focuses on the impact of external funding.
“We were interested in measuring how the organizational climate effects commercialization,” explained Currall. “We identified two organizational facets that have an impact: commercialization-support climate and boundary-spanning climate. Each facet has a differential effect on the commercialization process.”
Currall and his co-authors surveyed 218 faculty members, graduate students, administrative leaders, project leaders and postdoctoral researchers from ERC at universities nationwide. They reviewed research centers’ annual reports and collected survey data on invention disclosures and patent awards, and interviewed key participants.
They found that an organizational structure and leadership that promotes and rewards commercializing endeavors has a positive impact on the rate of invention disclosures one year after the beginning of the commercialization process. In addition, an environment that promotes research collaboration across multiple disciplines had a positive impact on patent awards two years after the commercialization process began.
“The process of commercializing involves invention disclosures that may lead to patent awards,” explained Currall. “It is part of a process that may or may not lead to a patent, but having an organization that is effectively promoting these endeavors is critical.”
The study also found that the most productive centers were not from the most historically productive universities—suggesting that it isn’t just the presence of faculty with a track record of innovation that determines success, but rather the university’s organization and management.
Currall and his co-authors hope that their project will open a new stream of organizational research that further explores how the organizational climate drives commercialization and scientific discoveries. Currall plans to publish a book based on the research.
Focusing Executives on Long-term Value Creation
Concerned for the future of capitalism if it continues its trend towards the redistribution of wealth and away from creation of wealth, Currall co-authored a Harvard Business Review blog titled “A Model for Focusing Executives on Long-term Value Creation” with Bill Jesse, vice chairman of The Wine Group.
Currall and Jesse argue for a set of values and incentives that reward long-term sustainable value creation. Their approach is two-fold: monetize what executives earn as active managers and make it dependent on the performance of their successors, and measure success over a longer time frame than is currently the trend.
Currall and Jesse cite the success of The Wine Group’s six-point plan that has experienced growth over four generations of management teams. They argue that these six elements, The Wine Group’s “Recitals,” discourage executives from taking long-term risks for short-term gains, and make it impossible to “kick the can down the road” because problems get dealt with quickly and largely remove the effect of industry cycles from company valuation.