Ian MacMillan

Ian MacMillan
  • The Dhirubhai Ambani Emeritus Professor of Innovation and Entrepreneurship

Contact Information

  • office Address:

    407 Vance Hall
    Philadelphia, PA 19104

Research Interests: entrepreneurship, new venture management, organizational competence, strategic management

Overview

Education

DBA, University of South Africa, 1975; MBA (cum laude), University of South Africa, 1972; BS, University of Witwatersrand, 1963

Consulting

Merck, Microsoft, Air Products, Citibank, Greenwich Pharmaceuticals, Chubb and Sons, NYSE, Dupont, General Electric, GTE, IBM, Metropolitan Life, American Re-Insurance, Panasonic (Japan), Olympus (Japan), L.G. Group (Korea), Texas Instruments, KPMG, Hewlett Packard, Intel, Fluor Daniel; Workout initiative, GE, 1989-92

Academic Positions Held

Wharton: 1986-present (named Dhirubhai Ambani Professor of Innovation and Entrepreneurship, 2005; named Fred R. Sullivan Professor, 1999-2005; Director, Sol C. Snider Entrepreneurial Research Center, 1986-present; Director, Goergen Entrepreneurial Management Program, 1998-2003; George W. Taylor Professor of Entrepreneurial Studies, 1986-99; Academic Director, Advanced Management Program, 1988-89). Previous appointments: New York University; Columbia University; University of South Africa. Visiting appointment: Northwestern University

Other Positions

Chief Chemical Engineer, Consolidated Oil Products, Republic of South Africa, 1965-70; Scientist, Atomic Energy Board, Government Metallurgical Labs, Republic of South Africa, 1963-64

Professional Leadership

Academy of Management Fellows, 1997-present; Editorial Board, Strategic Management Journal, 1980-present; Editorial Board, Human Resource Management, Long Range Planning

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Research

  • Ian MacMillan and R. G. McGrath (2005), Marketbusting: Strategies For Exceptional Business Growth, Harvard Business Review, 80-92.

    Abstract: If company leaders were granted a single wish, it would surely be for a reliable way to create new growth businesses. Business practitioners' overwhelming interest in this subject prompted the authors to conduct a three-year study of organizational growth -- specifically, to find out which growth strategies were most successful. They discovered, somewhat to their surprise, that even companies in mature industries found rich new sources of growth when they reconfigured their unit of business (what they bill customers for) or their key metrics (how they measure success). In this article, the authors outline these and other moves companies can make to redefine their profit drivers and realize low-risk growth. They offer plenty of real world examples. For instance: Changing Your Unit of Business. Once a conventional printing house, Madden Communications not only prints promotional materials for customers but also manages the distribution and installation of those materials on-site. Its revenues grew from $10 million in 1990 to $133 million in 2004, in an industry that many had come to regard as hopelessly mature. Improving Your Key Metrics--Particularly Productivity. Lamons Casket, with $80 million in revenues, built a Web site that radically improved its customers' ability to find, order, and pay for goods. The firm's market share rose along with its customer retention rate. The authors also suggest ways to identify your unit of business and associated key metrics and recognize the obstacles to changing them; review the key customer segments you serve; assess the need for new capabilities and the potential for internal resistance to change; and communicate to internal and external constituencies the changes you wish to make in your unit of business or key metrics.

  • Ian MacMillan and M. Boisot (2004), Crossing Epistemological Boundaries: Managerial and Entrepreneurial Approaches to Knowledge Management, Long Range Planning, 37(6): 505-524. 10.1016/j.lrp.2004.09.002

    Abstract: It is possible to identify two distinct yet complementary epistemological paths to knowledge development. The first one is holistic and field dependent, and builds on the concept of plausibility, and we associate this path with an entrepreneurial mindset. The second is object-oriented and builds on the concept of probability; this path can be associated with the managerial mindset. We believe that both managerial and knowledge management practices have emphasized the second path at the expense of the first. To restore the balance, knowledge management needs to develop processes and tools – associated with scenarios and real options – that will allow it to operate credibly in possible and plausible worlds, so as to extract value from them. We propose a systems framework for thinking through the nature of such tools.

  • Ian MacMillan and A. B. van Putten (2004), Making Real Options Really Work, Harvard Business Review, 134-141.

    Abstract: As a way to value growth opportunities, real options have had a difficult time catching on with managers. Many CFOs believe the method ensures the overvaluation of risky projects. This concern is legitimate, but abandoning real options as a valuation model isn't the solution. Companies that rely solely on discounted cash flow (DCF) analysis underestimate the value of their projects and may fail to invest enough in uncertain but highly promising opportunities. CFOs need not--and should not--choose one approach over the other. Far from being a replacement for DCF analysis, real options are an essential complement, and a project's total value should encompass both. DCF captures a base estimate of value; real options take into account the potential for big gains. This is not to say that there aren't problems with real options. As currently applied, they focus almost exclusively on the risks associated with revenues, ignoring the risks associated with a project's costs. It's also true that option valuations almost always ignore assets that an initial investment in a subsequently abandoned project will often leave the company. In this article, the authors present a simple formula for combining DCF and option valuations that addresses these two problems. Using an integrated approach, managers will, in the long run, select better projects than their more timid competitors while keeping risk under control. Thus, they will outperform their rivals in both the product and the capital markets. INSETS: Where the Value Comes From;The Trouble with Financial Option Tools.

  • Ian MacMillan and R. G. McGrath (2004), Nine Integrated Roles of Technology Development Managers, Research-Technology Management, 47(3): 6-26.

    Abstract: Success in technology development depends increasingly on speed to profitable commercialization. This calls for a new type of technology development management. As projects move from opportunity creation through market entry through commercial takeoff the technology manager needs to perform nine integrative roles at three distinct levels: the venture level, where the business-building is taking place; the championing level, where resources are secured in the internal competition for staff and funds; and the heat-shielding level, where the issues of project legitimacy are resolved. The nine roles range from creating options to keeping venture teams focused.

Teaching

Past Courses

  • CIS 599 - MASTER'S INDEP STUDY

    For master's students studying a specific advanced subject area in computer and information science. Involves coursework and class presentations. A CIS 599 course unit will invariably include formally gradable work comparable to that in a CIS 500-level course. Students should discuss with the faculty supervisor the scope of the Independent Study, expectations, work involved, etc.

  • EAS 499 - SENIOR CAPSTONE

    The Senior Capstone Project is required for all BAS degree students, in lieu of the senior design course. The Capstone Project provides an opportunity for the student to apply the theoretical ideas and tools learned from other courses. The project is usually applied, rather than theoretical, exercise, and should focus on a real world problem related to the career goals of the student. The one-semester project may be completed in either the fall or sprong term of the senior year, and must be done under the supervision of a sponsoring faculty member. To register for this course, the student must submit a detailed proposal, signed by the supervising professor, and the student's faculty advisor, to the Office of Academic Programs two weeks prior to the start of the term.

  • FNCE399 - INDEPENDENT STUDY

    Integrates the work of the various courses and familiarizes the student with the tools and techniques of research.

  • MGMT101 - INTRO TO MANAGEMENT

    We all spend much of our lives in organizations. Most of us are born in organizations, educated in organizations, and work in organizations. Organizations emerge because individuals can't (or don't want to) accomplish their goals alone. Management is the art and science of helping individuals achieve their goals together. Managers in an organization determine where their organization is going and how it gets there. More formally, managers formulate strategies and implement those strategies. This course provides a framework for understanding the opportunities and challenges involved in formulating and implementing strategies by taking a "system" view of organizations,which means that we examine multiple aspects of how managers address their environments, strategy, structure, culture, tasks, people, and outputs, and how managerial decisions made in these various domains interrelate. The course will help you to understand and analyze how managers can formulate and implement strategies effectively. It will be particularly valuable if you are interested in management consulting, investment analysis, or entrepreneurship - but it will help you to better understand and be a more effective contributor to any organizations you join, whether they are large, established firms or startups. This course must be taken for a grade.

  • MGMT212 - SOCIAL ENTREPRENEURSHIP

    This is a course on creating a business to attack a social problem and thereby accomplish both social impact and financial sustainability. For this course, social entrepreneurship is defined as entrepreneurship used to profitably confront social problems. This definition therefore views social entrepreneurship as a distinct alternative to public sector initiatives. The basic thesis is that many social problems, if looked at through an entrepreneurial lens, create opportunity for someone to launch a venture that generates profits by alleviating that social problem. This sets in motion a virtuous cycle - the entrepreneur is incented to generate more profits and in so doing, the more the profits made, the more the problem is alleviated. Even if it is not possible to eventually create a profit-making enterprise, the process of striving to do so can lead to a resource-lean not-for-profit entity. Creating a profitable social entrepreneurship venture is by no means a simple challenge. Cross-listed with MGMT 212.

  • MGMT230 - ENTREPRENEURSHIP

    MGMT 230 integrates the material introduced in business fundamental courses and applies it to the design and evaluation of new ventures. The purpose of this course is to explore the many dimensions of new venture creation and growth and to foster innovation and new business formations in independent and corporate settings. The course addresses both a theoretical perspective on venture initiation and the application of writing an actual business plan. In this course you are asked to get out of the habit of being a receiver of ideas, facts, concepts and techniques, and get into the habit of generating ideas, identifying problems, analyzing and evaluating alternatives, and formulating workable action plans, thus putting textbook knowledge into practice. Students will get this hands-on experience in the following ways: Through the formation and ongoing work of venture teams that will design a comprehensive business development plan for a particular start-up company. Teams are expected to utilize the tools and analytical approaches discussed in class to their venture, through simulations, labs, lectures and class discussions that are designed to familiarize students with the many dimensions of entrepreneurship and new venture initiation. Class format varies throughout the course. In some class sessions, there will be a lecture on specific topics. Other sessions will consist of live simulations, labs, in-class exercises, and discussions of a particular topic or venture ideas that students are developing. Guest speakers will also lead and participate in some class sessions.

  • MGMT231 - VENTURE IMPLEMENTATION

    This advanced course on entrepreneurship focuses on developing a validated opportunity or concept into a venture that is ready for seed financing and/or launching the product or service. Participants in this course must previously have developed a validated opportunity, either in a previous course or through independent efforts. Students may participate as a team of up to three people. Ideally, participants are commited to pursuing their opportunity commercially, or at least to seriously explore that possibility. The course provides a practical guidance for developing the product or service, forming the entity, raising capital building the team, establishing partnerships, and sourcing professional services. After completing the course, you will be "pitch ready" - whether submitting to campus venture competitions or to outside investors. Most coursework is focused on applying concepts and frameworks to project tasks in developing the venture. Students must have successfully completed MGMT 801 before enrolling in this course. Students must have successfully completed MGMT801 before enrolling in this course. Format: Readings, discussion, and developing an implementation plan for a real venture.

  • MGMT731 - TECHNOLOGY STRATEGY

    The course is designed to meet the needs of future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technology-based industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems. The course uses a combination of cases, simulation and readings. The cases are drawn primarily from technology-based industries. Note, however, that the case discussions are mainly based on strategic (not technical) issues. Hence, a technical background is not required for fruitful participation.

  • MGMT801 - ENTREPRENEURSHIP

    MGMT 801 is the foundation coures in the Entrepeurial Management program. The purpose of this course is to explore the many dimensions of new venture creation and growth. While most of the examples in class will be drawn from new venture formation, the principles also apply to entrepreneurship in corporate settings and to non-profit entrepreneurship. We will be concerned with content and process questions as well as with formulation and implementation issues that relate to conceptualizing, developing, and managing successful new ventures. The emphasis in this course is on applying and synthesizing concepts and techniques from functional areas of strategic management, finance, accounting, managerial economics, marketing, operations management, and organizational behavior in the context of new venture development. The class serves as both a stand alone class and as a preparatory course to those interested in writing and venture implementation (the subject of the semester-long course, MGMT 806). Format: Lectures and case discussions Requirements: Class participation, interim assignments, final project Enrollment limited to Wharton MBA students only.

  • MGMT802 - INNOV, CHG AND ENT

    Designed for students with a serious interest in entrepreneurship, this course will provide you with an advanced theoretical foundation and a set of practicaltools for the management of startups and entrepreneurial teams in fast-changing and innovative environments. Building on the skills of MGMT 801, every class session is built around an experience where you have to put learning into practice, including the award-winning Looking Glass entrepreneurial simulation, role-playing exercises, and a variety of other games and simulations. The goal is to constantly challenge you to deal with entrepreneurial or innovative experiences, as you learn to navigate complex and changing environments on the fly, applying what you learned to a variety of scenarios. MGMT 802 is built to be challenging and will require a desire to deal with ambiguous and shifting circumstances. It is recommended students take MGMT 801 before enrolling in this course. Format: Lectures, discussion, interim reports, class participation, readings report, and presentations, and an innovation assessment in PowerPoint format.

  • MGMT806 - VENTURE IMPLEMENTATION

    This advanced course on entrepreneurship focuses on developing a validated opportunity or concept into a venture that is ready for seed financing and/or launching the product or service. Participants in this course must previously have developed a validated opportunity, either in a previous course or through independent efforts. Students may participate as a team of up to three people. Ideally, participants are commited to pursuing their opportunity commercially, or at least to seriously explore that possibility. The course provides a practical guidance for developing the product or service, forming the entity, raising capital building the team, establishing partnerships, and sourcing professional services. After completing the course, you will be "pitch ready" - whether submitting to campus venture competitions or to outside investors. Most coursework is focused on applying concepts and frameworks to project tasks in developing the venture. Students must have successfully completed MGMT 801 before enrolling in this course. Students must have successfully completed MGMT801 before enrolling in this course. Format: Highly interactive Requirements: Class participation, interim assignments.

  • MGMT811 - ENTREP THROUGH ACQUIS.

    MGMT 811 focuses on the theoretical, strategic, analytics, and practical issuesof acquiring a business. Topics include: locating a business, due diligence, reviewing and analyzing data, valuation, raising capital/financing the deal, search funds, structuring the acquisition, letters of intent, contracts/asset purchase agreements, integrating the target, acquisition growth strategies, and transitioning/exiting the acquisition. Format: The class consists of lectures, in-class discussions of cases, assigned readings, homework problems, case studies, and a group or individual project. It is recommended students take MGMT 801 before enrolling in this course.

  • MGMT893 - ADVANCED STUDY-EMGT

In the News

Knowledge @ Wharton

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Latest Research

Ian MacMillan and R. G. McGrath (2005), Marketbusting: Strategies For Exceptional Business Growth, Harvard Business Review, 80-92.
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In the News

Mapping Critical Knowledge for Digital Transformation

When companies digitalize in the context of their strategic knowledge, it can uncover powerful growth opportunities.

Knowledge @ Wharton - 2017/07/6
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