Changing the Way Managers and Entrepreneurs Make Decisions

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SAIM (A Scientific Approach to Innovation Management), the research project that earned a €2mln European Research Council (ERC) Advanced Grant for Alfonso Gambardella, Head of Bocconi Department of Management and Technology, does not lack ambition. He wants to design and implement a massive randomized controlled trial (RCT) at a scale larger than any study in management and rarely reached in economics or the social sciences. The final goal: checking whether entrepreneurs and managers that adopt a scientific approach make better decisions leading to better performance.

Scientists develop theories, test them through experiments based on the availability of data, modify their theories according to the results of the experiments and eventually develop new theories to test.

The winning project follows the logic of clinical trials, in which drugs and vaccines are tested in small (phase 1), medium (phase 2) and large (phase 3) scale before their introduction to the market. Professor Gambardella, jointly with other scholars of his Department, including Arnaldo Camuffo, have already shown, through small- and medium-scale tests, that entrepreneurs who act like scientists display better results.

With the massive-scale trial funded by the ERC, Professor Gambardella wants, on the one hand, to make his findings more robust and, on the other hand, shed light on the mechanisms that lead to better results when a scientific approach is adopted. “We are developing a framework that tries to explain why entrepreneurs and manager who act like scientists develop more ideas, have a stronger capability to connect distant dots and, therefore, can choose from a larger set of options. But as scientists ourselves, we have to test it,” Professor Gambardella says.

While the small- and medium-scale tests only involved start-ups, the large scale RCT will target start-ups, small-medium enterprises, and units of large firms.

The trial will be conducted in six countries (China, India, Italy, Netherlands, Tanzania, and UK) for a total of 1,200 firms, based on an intervention that comprises training sessions and monthly collection of data on actions and performance collected for two years.

At the end of the trial, it will be possible to compare the results of decision makers who adopt a scientific approach with those who did not.

“The ground-breaking novelty of the project is associated with the importance and the extent of the implications of a greater diffusion of a scientific approach in managerial or entrepreneurial decision-making,” says Professor Gambardella. “If confirmed, it can then become a standard, or at least a basis, for all the training courses and initiatives aimed at improving support to entrepreneurs.”

source: Bocconi Knowledge