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How Status Affects Innovation

Innovative projects from high-status project managers fail more often than those proposed by middle-ranking individuals



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Giving undue priority to the boss’s pet schemes is a time-honoured business hazard. It was prevalent in ‘command and control’ hierarchies, but one might expect it to be less of a problem in our more democratic organizations today.

New research by Balazs Szatmari at Rotterdam School of Management, Erasmus University (RSM) looks at the hit-and-miss success rate of innovative projects proposed by ‘high status’ as opposed to ‘middle-ranking’ individuals and finds that the age-old problem still exists - potentially a serious problem in today’s rapidly changing business environment, where success and sustainability depends so much on the effective innovation of products, processes and business models.

Innovative new ideas only see the light of day if they overcome inertia or resistance within the organization and are sold successfully to senior management and to the colleagues needed to join the project. Making this critical ‘sale’ is much easier for those having ‘social capital’ or a high status than for middle ranking individuals.

Although projects proposed by high status individuals can benefit due to everyone enthusiastically jumping aboard, they tend to fail relatively more often, because people are less critical of these projects and turn a blind eye to their flaws.

Szatmari's analysis revealed that projects from project leaders with very high organizational status are generally the same quality as projects run by low status producers, but the variation in project quality is much bigger. Leaders with a middle-ranking status typically deliver projects with the highest quality, his results show.

Companies need to be aware that while innovations proposed by project leaders with high status may easily overcome internal resistance and progress speedily, they can also be too readily supported by others without being given appropriate scrutiny. This can lead to failure, to the time-wasting pursuit of low quality projects, or to unwarranted delays in the adoption of better innovations proposed by individuals with less status.

Read Balazs Szatmari’s PhD thesis: 'We are (all) the champions: The effect of status in the implementation of innovations'


One of Europe’s leading business schools, and ranked among the top three for research. RSM provides ground-breaking research and education furthering excellence in all aspects of management.





 
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