Star employees aren’t the only ones who shape the future of a company.
PK Toh, associate professor of management at the McCombs School of Business at the University of Texas at Austin, examines when the rest of the team is just as important.
PK Toh is an associate professor of management at The University of Texas at Austin’s McCombs School of Business. He studies technology strategy, including value creation and appropriation in platforms and ecosystems; standard setting as a coordination mechanism; firm search for technologies; competition and innovation; and resource allocation.
A senior editor at Organization Science from 2017 to 2022, Toh is currently on the editorial boards of Strategic Management Journal, Strategy Science, and Strategic Organization. His research has been published in leading academic journals and has won several prestigious awards. He has also won multiple Best Reviewer awards and teaching awards.
Toh has served as chair, organizer, or panelist in various conferences, junior faculty consortia, Ph.D. dissertation and doctoral consortia, and research committees. At UT, he serves as the strategy area coordinator and on several school-level and department-level committees. Prior to his academic career, he was a currency options trader at J.P. Morgan.
Toh earned a Ph.D. in strategy from the University of Michigan at Ann Arbor. Besides academic qualification, he has two advanced piano performance diplomas – Licentiate and Fellowship of the Trinity College of London.
Who Pulls a Company Out of a (Technological) Rut?
Companies rely on their inventors to constantly innovate and keep the business on the technological frontier. But when companies hit a wall and run out of technological opportunities on their current trajectories, who among their inventors will generate the next radical big ideas?
My coauthor and I wanted to examine the ways that employees create new ideas and technologies within the companies they work for. We believed that people’s incentives, given their career concerns at their employers, would come into the picture. How good their career prospects are, given their current performance and trajectories, would influence the way they search for new ideas.
We examined inventors and their patents within the U.S. electronics industry, to see how these inventors’ career concerns would shape the way they search for radical new technologies when their companies’ current technological trajectories start exhibiting signs of exhaustion. We found that, in such times, it’s not so much the star inventors but rather the companies’ unsung heroes who tend to come up with radical ideas that break from their employers’ status quo and forge new technological pathways. Essentially, inventors who have been less productive, are not the traditional stars, or are less connected within the company are the ones who will jump out farther in search for new technologies, and in doing so, help bring the companies to the new technological domains or frontiers.
Hence, our advice to business leaders: in bad times, don’t just look to your star employees who are at the very core of your companies. The seed of radical breakthroughs will often come from the periphery. Understand that innovation depends not only on how capable your inventors are or what high-potential areas they work in, but also on the incentives tied to these unsung heroes’ career concerns.
