Robert Wuebker
by Robert Wuebker
Mon Oct 12th 2009 at 9:25am UTC

Revisiting Drucker’s Innovation and Entrepreneurship

What, exactly, is entrepreneurial strategy, anyway?

I regularly teach classes on entrepreneurship and new venture development, and more than occasionally drop in to provide my perspective on topics of interest to those forming or funding technology-driven, high-growth companies. Since I have been spending a lot more time up in front of students (and, thus, getting peppered with great questions), I have been giving a lot of thought to what passes for “entrepreneurial strategy” courses (or sections of courses). To me, it seems that the bulk of entrepreneurship pedagogy has, in a relatively brutish way, simply ported over the issues relevant in a typical strategic management class and attempted to convert those topics into material appropriate to the new venture setting. The more I think about it, the less persuaded I am that this is helpful for students; and I continue to have my suspicions that this approach forwards the research frontier.

Why we have decided to believe that the theories and questions in strategic management – relevant to large, established firms – apply equally well to either nascent or newly established firms merits further consideration. What evidence do we have that the same proscriptive advice we give in the case of large-firm strategy applies to nascent or newly established firms? And does that advice apply equally well for both innovative, high-growth firms (the software startup) and replicative entrepreneurship (a neighborhood bakery)?

In Innovation and Entrepreneurship, Peter Drucker notes, “I have not come across any discussion of entrepreneurial strategies. Yet they are important, and they are distinct, and they are different.” Consider that the next time you are perusing your local bookstore seeking insight on how to build a business.

4 Responses to “Revisiting Drucker’s Innovation and Entrepreneurship”

  1. Michael Wells Says:

    If I remember right, one of the points of Innovation and Entrepreneurship is that the entrepreneur is creating something new — a new product, business model, organizational structure. He says this is different than simply opening a business doing the same thing again, like a new bakery. I think there are probably differences for the small startup from the large firm, but also for the innovator vs the proven business model.

    To an extent, this is like the difference between financial and management accounting. Financial accounting is all about rules while management accounting is about finding what works for your situation.

    In my business I work with a lot of non-profits and one of the things I’ve noticed is that while there is an accepted model for governance (The board makes policy, the management carries it out) in fact many models work for different groups (from the board is very involved in implementation to the organization functions as almost a sole proprietorship of a talented founder) and my advice is generally if it’s working don’t mess with it.

  2. Aaron Templer Says:

    Great insight. Thanks for making this point so well.

    I used to work for a b-school – I entered the higher ed industry from the business world. In my experience, entrepreneurs and innovation experts are the first to point out the irrelevance of b-schools because so little of the curriculum applies to their worlds.

    I found your point about the pedagogical approach to entrepreneurship to be true across many disciplines. B-schools use case studies from huge, established firms as examples of doing business in a world that hardly resembles the reality for most b-school grads. Really: does a P & G re-branding case study have relevance for the smaller-scale, under-resourced efforts of a three-state energy company? Does a GE traunch have anything to do with a four-store yoga apparel shop’s?

    My sense is that this approach is popular because it’s easier to access public companies. Large firms are more willing to open their doors to academics than time-strapped, competition-weary smaller firms (and of course public firms’ financials are available as well).

    To be a bit brutish myself, another reason for this approach might be for rankings purposes. Placing grads in high salary positions right out of the gate is an end goal that while uncalculated probably fuels b-schools’ governing, all-encompassing love for blue chip firms. An entrepreneur won’t have the kind of salary data that helps b-schools in their ranking pursuits (at least not right away). So it isn’t encouraged very strongly in career services departments, and it would follow that it isn’t encouraged within the academician walls.

    But that might be a little cynical. Thanks again for your good post.

  3. RS Says:

    If you can you can apply an off-the-shelf strategy to what you are doing… then it isn’t entrepreneurship.

  4. Anon Says:

    Paul Graham, the founder of the company that became Yahoo Store and Y Combinator, a VC firm,, has written specifically about startups and the the challenges they face. His latest essay is based on feedback that he has received from companies that Y Combinator is funding.

    http://paulgraham.com/really.html