can accelerate

entrepreneurial How

thinking

growthin large corporations

1. Growth Framework

2. Dynamic forces driving a company growth

3. Entrepreneurial strategy making

4. Final Lesson

Pros Business model advantages

Promote business development

Build credibility

Human talent development

Financial value creation and financing

Business model challenges

Business execution & renewal

Human & other resources constraints

Management challenges

Funding challenges/dilution

Cons

Growth accelerators and inhibitors 1. Top management

2. Human resources/culture

3. Strategy

4. Company financing

5. R&D / new product

6. Product/after sales

7. Operations management

8. Customer/market opportunity

9. Marketing/branding

10. Sales/distribution

11. Partnership

12. Capital markets

13. Acquisitions/mergers

14. Regulatory/government/taxation

15. Economic/corporate environment

16. Legal/lawsuits

2. Dynamic forces

driving a company

growth

Introduction A company is an ecology in which strategic initiatives arise following a certain pattern. Knowing how strategy originates and how strategy making takes place is crucial for the company to control its destiny.

Strategy making depends on two variables: decision making power concentration and simultaneity of strategic action.

Strategic initiatives within the company compete for limited resources.

Every company has its own cultural and administrative mechanisms to decide what initiatives are supported and how resources and

attention are assigned amongst them.

Robert Burgelman’s Rubber band Model Basis of competitive advantage In the industry

Competition at the company’s position in the industry as a result of external forces (Porter + analysis)

What the company does The consequential action in which the company engages. It links position and competencies

Strategic action

Distinctive competencies

Skills, assets and routines to meet the basis if competitive advantage in the industry

Beliefs on market domain and the relative importance of the competencies to achieve a competitive advantage. Values and principles of what we will do and what will not

Official Corporate Strategy Internal selection

contextReestablishes alignment in both axis when it is altered

Misalignment 1Basis of competitive advantage In the industry

What it takes to win

What the company does

Strategic action

Distinctive competencies

What we’ve got

What we say

Official Corporate Strategy

Internal selection context

Culture

Misalignment 2Basis of competitive advantage In the industry

What it takes to win

What the company does

Strategic action

Distinctive competencies

What we’ve got

What we say

Official Corporate Strategy

Internal selection context

Culture

Strategic Dissonance

Dissonance

Time

Rev

enu

e G

row

th

Sources of Strategic Dissonance

Dissonance is Strategic if:

- There is a divergence between Basis of Competitive Advantage and Distinctive Competence.

- There is a divergence between Official Corporate Strategy and Strategic Action.

Initially the signals are usually weak so our job as leaders is to discern signals from noise

3. Entrepreneurial strategy

making

Strategy Processes

Autonomous strategic action.

Induced Strategic Action

EmergingExternal

Environment

O�cial Corporate Strategy

Structural Context

Known environment

Strategic Context

Induced Autonomous

DefinitionsKnown environment: This is where the induced strategic process takes place. Threats and opportunities arise form here, forcing the company to adjust the induced strategy process.Emerging external environments: Unfamiliar, unknown environments where the autonomous strategy process takes place. Many of them do not survive but others may grow and complement or even substitute the familiar environment. Official Corporate Strategy: Beliefs on what the company does well, in what markets it can succeed, what are its values and what goals it aims to achieve.Induced Strategic Action: Initiatives on the part of operational and middle level managers that fit the concept of the official corporate strategy. Is oriented toward gaining and maintaining leadership in the company’s core businesses. Autonomus strategic action: Strategic initiatives outside the scope of the official corporate strategy. They differ from the induced ones in the technology they use, the value proposition or the target clients. They rely on new competencies or in a new combination of the existing ones. They lead to new businesses that are different from the core business, complementing or even substituting it. Structural Context: Administrative and cultural mechanisms to keep coherence between the official corporate strategy and the induced strategic action. The larger the company the more complex they are. Transforms “concept” into “action.Strategic Context: Administrative and cultural mechanisms to evaluate and choose strategic initiatives outside the structural context. Transforms “action” into “context”.. It allows to assess the adaptive potential of the autonomous strategic action to the official corporate strategy (which will change upon this incorporation).

Conclusion

The autonomous strategy process begins with strategic initiatives that often emerge fortuitously and unexpectedly. Initially there is no clarity about their strategic importance and how they may relate to the induced strategy process. Solving this indetermination is the most important challenge for company evolution. Hence why the design of the strategic context is crucial.

4. Final

Lesson

Two systems one company

Internal selectioncontext

Structural Context

Strategic Context

.

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