Ian Mac Millan

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 ReInsurance, Panasonic (Japan), Olympus (Japan), L.G. Group (Korea), Texas Instruments, KPMG, Hewlett Packard, Intel, Fluor Daniel; Workout initiative, GE, 198992

Academic Positions Held

Wharton: 1986present (named Dhirubhai Ambani Professor of Innovation and Entrepreneurship, 2005; named Fred R. Sullivan Professor, 19992005; Director, Sol C. Snider Entrepreneurial Research Center, 1986present; Director, Goergen Entrepreneurial Management Program, 19982003; George W. Taylor Professor of Entrepreneurial Studies, 198699; Academic Director, Advanced Management Program, 198889). 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, 196570; Scientist, Atomic Energy Board, Government Metallurgical Labs, Republic of South Africa, 196364

Professional Leadership

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

Ian MacMillan and R. G. McGrath (2005), Marketbusting: Strategies For Exceptional Business Growth, Harvard Business Review, 8092.

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 threeyear 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 lowrisk 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 onsite. 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 MetricsParticularly 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): 505524. 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 objectoriented 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, 134141.

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 notand should notchoose 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, ResearchTechnology Management, 47(3): 626.

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 businessbuilding is taking place; the championing level, where resources are secured in the internal competition for staff and funds; and the heatshielding level, where the issues of project legitimacy are resolved. The nine roles range from creating options to keeping venture teams focused.

Past Courses

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.

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 profitmaking enterprise, the process of striving to do so can lead to a resourcelean notforprofit entity. ,Creating a profitable social entrepreneurship venture is by no means a simple challenge. It involves deeply understanding how to prioritize a multimission entity, how to analyze and engage traditional agencies, how to formulate political strategies to develop influence and social assets in target beneficiary markets, how to forge negotiating strategies for securing resources, how to capture publicity for the enterprise, and generally how to minimize resource requirements. Students in teams will develop a PowerPoint deck proposing a social enterprise start up using the tools and principles of the course. ,Format: Lecture, discussion, live case studies (discussions of progress reports of students own ventures), nationboosting presentations.

MGMT231 VENTURE IMPLEMENTATION

This advanced course on entrepreneurship focuses on developing a validated opprotunity into a venture that is ready for seed financing and/or launching the product or service. Participants in the workshop 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 committed to pursuing their opportunity commercially, or at least to seriously explore that possibility. The workshop 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. ,Format: Readings, discussion, and developing an implementation plan for a real venture.

MGMT801 ENTREPRENEURSHIP

Management 801 is the foundation course in the Entrepreneurial 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 nonprofit 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 semesterlong course, MGMT806). ,Format: Lectures and case discussions ,Requirements: Class participation, interim assignments, final project

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 fastchanging and innovative environments. Building on the skills of Management 801, every class session is built around an experience where you have to put learning into practice, including the awardwinning Looking Glass entrepreneurial simulation, roleplaying 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. Management 802 is built to be challenging and will require a desire to deal with ambiguous and shifting circumstances. ,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.

MGMT810 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 profitmaking enterprise, the process of striving to do so can lead to a resourcelean notforprofit entity. Creating a profitable social entrepreneurship venture is by no means a simple challenge. ,It involves deeply understanding how to prioritize a multimission entity, how to analyze and engage traditional agencies, how to formulate political strategies to develop influence and social assets in target beneficiary markets, how to forge negotiating strategies for securing resources, how to capture publicity for the enterprise, and generally how to minimize resource requirements. Students in teams will develop a PowerPoint deck proposing a social enterprise start up using the tools and principles of the course. ,Format: Lecture, discussion, live case studies (discussions of progress reports of students' own ventures), nationboosting presentations ,Requirements: Classroom participation, interim assignments, readings report, and final business plan

MGMT811 ENTREP THROUGH ACQUIS.

MGMT 811 focuses on the theoretical, strategic, analytics, and practical issues of acquiring a business. Topics include: locating a business, due diligence, reviewing and analyzing data, valuation, raising capital/financing the deal, structuring the acquisition, letters of intent, contracts/asset purchase agreements, and integrating the target. ,Format: The class consists of lectures, inclass discussions of caseletts, assigned readings, homework problems, and a group or individual project.

The Power of Chicken Feed to Build Wealth in South Africa, Knowledge@Wharton 05/14/2009

Knowledge @ Wharton

• Mapping Critical Knowledge for Digital Transformation, Knowledge @ Wharton 07/06/2017
• Beyond Commodities: How African Multinationals Are Being Transformed, Knowledge @ Wharton 05/09/2016
• How to Determine Which Part of What You Know Really Matters, Knowledge @ Wharton 04/21/2015
• Weighing the Risks in the Ebola Battle, Knowledge @ Wharton 08/06/2014
• Vacation Reading: Summer Book Report, Knowledge @ Wharton 07/01/2013
• A Fivestep Process That Can Help Social Enterprises Succeed, Knowledge @ Wharton 07/01/2013
• Why Social Entrepreneurs Should Pressuretest Their Ideas, Knowledge @ Wharton 06/19/2013
• Telepsychiatry Service for Underserved Communities: A Wharton Social Impact Winner, Knowledge @ Wharton 04/16/2013
• From Fringe to Mainstream: Companies Integrate CSR Initiatives into Everyday Business, Knowledge @ Wharton 05/23/2012
• The Ouster of Muhammad Yunus: Can Politics Destroy Grameen Bank?, Knowledge @ Wharton 04/13/2011
• M&A’s Overlooked Pitfall: The False Negative, Knowledge @ Wharton 03/30/2011
• M&A’s Overlooked Pitfall: The False Negative, Knowledge @ Wharton 03/02/2011
• Lessons in Entrepreneurship and Wealth Building from the Developing World, Knowledge @ Wharton 01/12/2011
• Lessons in Entrepreneurship and Wealth Building from the Developing World, Knowledge @ Wharton 09/29/2010
• Lessons in Entrepreneurship and Wealth Building from the Developing World, Knowledge @ Wharton 09/15/2010
• How Entrepreneurs Can Create Effective Business Plans, Knowledge @ Wharton 03/02/2010
• Measuring Consumer Leverage Exposure, Knowledge @ Wharton 12/21/2009
• Wipro: Tools to Power Your Business, Knowledge @ Wharton 11/10/2009
• Managing in an Upturn: Focus on Customers and Keep Expectations Low, Knowledge @ Wharton 09/16/2009
• How ‘Go/No Go’ Thinking Can Stop Innovation Dead in its Tracks, Knowledge @ Wharton 07/15/2009
• Eradicating Mud Cookies: Global Executives Try to Connect Profit to Social Good, Knowledge @ Wharton 07/08/2009
• Discoverydriven Growth: The Only Plan Is to Learn as You Go, Knowledge @ Wharton 04/29/2009
• A World Transformed: What Are the Top 30 Innovations of the Last 30 Years?, Knowledge @ Wharton 02/18/2009
• Africa’s ‘Cocoon’ Phase: Can Private Investors and Entrepreneurs Transform the Continent?, Knowledge @ Wharton 09/03/2008
• Two Companies, Two Different Blueprints for Reducing Global Warming, Knowledge @ Wharton 07/09/2008
• Creating a Sustainable Business among South Africa’s Poor ‘One Bite at a Time’, Knowledge @ Wharton 07/12/2006
• Podcast: Ian MacMillan on the $60 Billion Question, Knowledge @ Wharton 06/28/2006
• Experimental Entrepreneurship: Removing the ‘Tin Cup Dependencies’, Knowledge @ Wharton 02/08/2006
• Farewell, Peter Drucker: A Tribute to an Intellectual Giant, Knowledge @ Wharton 11/30/2005
• Marketbusters: A Call to Arms for Upperlevel Managers Looking to Increase Market Share, Knowledge @ Wharton 06/15/2005
• Does Success in Tech Ventures Follow from Better R&D? Think Again, Knowledge @ Wharton 07/14/2004
• In Search of Serendipity: Bridging the Gap That Separates Technologies and New Markets, Knowledge @ Wharton 07/02/2003
• Social Entrepreneurs: Playing the Role of Change Agents in Society, Knowledge @ Wharton 05/19/2003
• What Happens to the Inner Circle of the Ousted CEO?, Knowledge @ Wharton 06/19/2002
• Lessons from Softbank’s Hard Knocks, Knowledge @ Wharton 04/10/2002
• The New Business Reality, Knowledge @ Wharton 01/30/2002
• Starting a Business Today: Less Competition But Also Less Cash, Knowledge @ Wharton 06/20/2001
• What Makes a Good Entrepreneurial Leader? Ask Middle Managers, Knowledge @ Wharton 04/25/2001
• Uncertainty, Technological Turbulence, Competition–What’s a Manager to Do? Thrive on It, Knowledge @ Wharton 08/30/2000
• Selling Appliances to the World, Knowledge @ Wharton 07/23/1999
• Resource Diversion Strategies in Multiple Markets, Knowledge @ Wharton 05/24/1999