Corporate Entrepreneurship

The Nature of Corporate The Nature of Corporate EntrepreneurshipEntrepreneurship

• Defining The ConceptDefining The Concept– Corporate EntrepreneurshipCorporate Entrepreneurship

• Activities that receive organizational sanction and Activities that receive organizational sanction and resource commitments for the purpose of resource commitments for the purpose of innovative results.innovative results.

– A process whereby an individual or a group of individuals, in A process whereby an individual or a group of individuals, in association with an existing organization, creates a new association with an existing organization, creates a new organization or instigates renewal or innovation within the organization or instigates renewal or innovation within the organization.organization.

– A process that can facilitate firms’ efforts to innovate constantly A process that can facilitate firms’ efforts to innovate constantly and cope effectively with the competitive realities that and cope effectively with the competitive realities that companies encounter when competing in international markets.companies encounter when competing in international markets.

The Need for Corporate The Need for Corporate EntrepreneuringEntrepreneuring

• Rapid growth in the number of new and sophisticated Rapid growth in the number of new and sophisticated competitorscompetitors

• Sense of distrust in the traditional methods of corporate Sense of distrust in the traditional methods of corporate managementmanagement

• An exodus (leaving the organization) of some of the best An exodus (leaving the organization) of some of the best and brightest people from corporations to become small and brightest people from corporations to become small business entrepreneursbusiness entrepreneurs

• International competitionInternational competition

• Downsizing of major corporationsDownsizing of major corporations

• An overall desire to improve efficiency and productivityAn overall desire to improve efficiency and productivity

The Corporate The Corporate Entrepreneurship ProcessEntrepreneurship Process

Corporate Entrepreneurship

Corporate Entrepreneurship

Corporate Venturing

Corporate VenturingInnovationInnovationStrategic

Renewal

Strategic Renewal

INNOVATION

Types of InnovationTypes of Innovation

• Radical InnovationRadical Innovation

– The launching of inaugural breakthroughs.The launching of inaugural breakthroughs.

– These innovations take experimentation and These innovations take experimentation and determined vision, which are not necessarily determined vision, which are not necessarily managed but must be recognized and nurtured.managed but must be recognized and nurtured.

• Incremental InnovationIncremental Innovation

– The systematic evolution of a product or service into The systematic evolution of a product or service into newer or larger markets.newer or larger markets.

– Many times the incremental innovation will take over Many times the incremental innovation will take over after a radical innovation introduces a breakthrough.after a radical innovation introduces a breakthrough.

Rules for an Innovative Environment

1.1. Encourage action.Encourage action.

2.2. Use informal meetings whenever possible.Use informal meetings whenever possible.

3.3. Tolerate failure and use it as a learning experience.Tolerate failure and use it as a learning experience.

4.4. Persist in getting an idea to market.Persist in getting an idea to market.

5.5. Reward innovation for innovation’s sake.Reward innovation for innovation’s sake.

6.6. Plan the physical layout of the enterprise to encourage informal Plan the physical layout of the enterprise to encourage informal communication.communication.

7.7. Expect clever Expect clever bootlegging (sale)bootlegging (sale) of ideas—secretly working on new of ideas—secretly working on new ideas on company time as well as personal time.ideas on company time as well as personal time.

8.8. Put people on small teams for future-oriented projects.Put people on small teams for future-oriented projects.

9.9. Encourage personnel to circumvent rigid procedures and bureaucratic Encourage personnel to circumvent rigid procedures and bureaucratic red tape.red tape.

10.10. Reward and promote innovative personnel.Reward and promote innovative personnel.

STRATEGY

Conceptualizing Corporate Conceptualizing Corporate Entrepreneurship StrategyEntrepreneurship Strategy

• Corporate Entrepreneurship StrategyCorporate Entrepreneurship Strategy

– A vision-directed, organization-wide reliance on A vision-directed, organization-wide reliance on entrepreneurial behavior that purposefully and entrepreneurial behavior that purposefully and continuously rejuvenates/revives the organization and continuously rejuvenates/revives the organization and shapes the scope of its operations through the shapes the scope of its operations through the recognition and exploitation of entrepreneurial recognition and exploitation of entrepreneurial opportunity.opportunity.

– It requires the creation of congruence between the It requires the creation of congruence between the entrepreneurial vision of the organization’s leaders entrepreneurial vision of the organization’s leaders and the entrepreneurial actions of those throughout and the entrepreneurial actions of those throughout

the organizationthe organization..

Critical steps of a corporate Critical steps of a corporate entrepreneurial strategyentrepreneurial strategy

– Developing the visionDeveloping the vision

– Encouraging innovationEncouraging innovation

– Structuring for an entrepreneurial climateStructuring for an entrepreneurial climate

– Developing individual managers for corporate Developing individual managers for corporate entrepreneurshipentrepreneurship

– Developing venture teams. Developing venture teams.

CORPORATE VENTURING

• Reestablishing the drive to innovate:Reestablishing the drive to innovate:– Invest heavily in Invest heavily in entrepreneurial activitiesentrepreneurial activities that allow new ideas to that allow new ideas to

flourish in an innovative environment.flourish in an innovative environment.– Provide nurturing and information-sharing activities.Provide nurturing and information-sharing activities.– Employee perception of an innovative environment is critical.Employee perception of an innovative environment is critical.

• Corporate VenturingCorporate Venturing– Institutionalizing the process of embracing the goal of growth Institutionalizing the process of embracing the goal of growth

through development of innovative products, processes, and through development of innovative products, processes, and technologies with an emphasis on long-term prosperity.technologies with an emphasis on long-term prosperity.

CORPORATE VENTURING

Developing Individual Managers Developing Individual Managers for Corporate Entrepreneurshipfor Corporate Entrepreneurship

1.1. The Breakthrough ExperienceThe Breakthrough Experience

2.2. Breakthrough ThinkingBreakthrough Thinking

3.3. Idea Acceleration ProcessIdea Acceleration Process

4.4. Barriers and Facilitators to Innovative ThinkingBarriers and Facilitators to Innovative Thinking

5.5. Sustaining Breakthrough TeamsSustaining Breakthrough Teams

6.6. The Breakthrough Plan The Breakthrough Plan

Preparing for FailurePreparing for Failure

• ““Learning from Failure”Learning from Failure”

– Recognizing the importance of managing the grief Recognizing the importance of managing the grief process that occurs from project failure. process that occurs from project failure.

– Understanding how organizational routines and rituals Understanding how organizational routines and rituals are likely to influence the grief recovery.are likely to influence the grief recovery.

– Ensuring that the organization’s social support system Ensuring that the organization’s social support system can encourage greater learning, foster motivational can encourage greater learning, foster motivational outcomes, and increase coping self-efficacy in outcomes, and increase coping self-efficacy in affected individuals.affected individuals.

SUCCESSFUL CORPORATE ENTREPRENEURSHIP

– Think big . . . really big.– Bring in the A-team.– Start small.– Establish unique measurement

techniques.

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