A Conversation with Ritta Katila
The following interview with Ritta was conducted
by Margarethe Wiersema, University of California – Irvine.
MW: Your research interests lie at the intersection of strategy and innovation. I assume your unusual engineering and technical background may have had something to do with your field of inquiry. What led you to pursue both an Engineering and Strategy doctorate and how have you utilized this in your research?
RK: My first degrees were indeed in engineering, but I also worked as a strategy consultant before entering the Ph.D. program. The question of how organizations discover, develop and commercialize technologies was central in all the companies with which I worked. It began to interest me academically, and I felt that the right way to approach it was to understand both the engineering side that drives it and the strategy side that manages it.
MW: So, your technical training has been immensely useful in being able to understand the nature of technical innovation in companies.
RK: That’s right. As an engineer, working in an engineering school at Stanford, I believe I can study technology-based firms in unique ways that strategy scholars traditionally do not—for example by introducing more precise measures of technology. For instance, one approach that I developed in my research was to combine measures of technological resources (patents) with success-based measures of commercialization (products), thus tracking an innovation from its invention to its introduction in the market. Studies traditionally focus on one or the other but do not link the two.
MW: Given global competitive pressures, being successful at introducing innovation in the marketplace is obviously a critical issue for management. What has your research found?
RK: An intriguing paradox is that established firms often own the technical resources necessary for innovation but do not fully use them. In fact, firms often under-exploit the resources that they already have. My work explores how firms can leverage their existing resources better, and thus contradicts the long-held belief that innovation depends solely on new resources.
MW: So your research has highlighted that it is not the lack of technical resources that inhibit companies from being more innovative, but their inability to utilize their existing resources. How have more successful companies managed to overcome this?
RK: The firm’s existing resources are an unexpectedly flexible source of innovation. Successful companies redeploy this storehouse of technologies in many ways, including sharing knowledge across departments, licensing, maintaining shelved technologies, and rewarding reactivation.
MW: Your research also examines the role of acquisitions in acquiring technical resources. Is this a successful way for established companies to become innovative and what kinds of acquisitions should managers plan for?
RK: Yes, in principle; however, most acquisitions and alliances are ineffective, and an intriguing research question is to understand why such efforts (in fact more than half of them) to acquire resources often fail, and how that failure rate can be reduced. One of the main insights from my work is that acquisition targets that are small and related in technology often make the acquiring firm more innovative, because those targets are able and willing to contribute to the acquisition’s success.
MW: So your research indicates that not all mergers are value de-stroying and in fact acquisitions serve as a useful way for com-panies to augment their internal technical resources.
RK: Yes, and this was an unexpected finding. Overall, I found that the most successful buyers anticipated the other firm’s perspective.
MW: With respect to corporate innovation, what do you see as the big challenges that managers face that would make interesting re-search questions?
RK: One intriguing research direction is the role of competition. Most research up to this point has focused on internal firm factors that predict innovation; however, the environment, and in particu-lar competition, has a large influence as well. Globalization, deregulation, and faster technological development only increase the significance of competition, which makes this direction even more important in the future.