intrapreneurship and corporate entrepreneurship development

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INTRAPRENEURSHIP DEVELOPMENT

Contents

Entrepreneurship

Intrapreneurship

Corporate Entrepreneurship

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Entrepreneurship

Stevenson, 1983, 1985; Stevenson and Jarillo, 1991

The pursuit process of opportunities beyond the resources you currently control

Entrepreneurship is a process

Entrepreneur is an individu doing entrepreneurship

Entrepreneurial is attitudes, skills, and behaviors of the entrepreneur

World Economic Forum Executive Summary, 2009

Opportunity Recognition for Value Creation

(Innovation)

Willingness & initiative to seize

opportunities

Willingness to take

calculated risks

Strategies to manage limited

resources

New Venture Creation, Timmons, 2003, from research at Boston College

Entrepreneurship is a process...

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Entrepreneurial Process Model

Uncertainty

Ambiguity

Capital market context

Exogenous forces

Timmons’ model of the Entrepreneurial Process, 2003

Why Entrepreneurship?

Indonesia Singapore U S A

0.2% 7,2% 11,5%

Global Entrepreneurship Monitoring (GEM) Report, 2007

Entrepreneur population

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Who should be Entrepreneurial?

As Individual:

Business owner

Private employee

State officer

Educator

As Organization:

Private Corporation

State Corporation

Government

School/University

INTRAPRENEUR CORPORATE ENTREPRENEURSHIP

Intrapreneurship

Stevenson and Jarillo (1990: 23)

A process by which individuals inside organizations pursue opportunities independent of the resources they currently control

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Intrapreneur - Corporate Relationship Model

Modified from Intrapreneuring, Pinchot, 1985

Innitiative, Innovation

Resources: Financial, Market Penetration,

Research facility

Example: The Intrapreneur who become Entrepreneur

Steve Jobs & Steve Wozniac They joined and create

Apple Computer after their PC concept rejected by HP

and Atari

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The Intrapreneur

Pinchot (1985, p. ix, in: Sharma & Chrisman, 1999)

Intrapreneurs are … ‘dreamers who do’

Those who take hands-on responsibility for creating innovation of any kind within an organization

They may be the creators or inventors but are always the dreamers who figure out how to turn an idea into a profitable reality

Intrapreneurial Grid

Artist Inventor INTRAPRENEUR

Idea Generator Manager

Supervisor

Worker Valuable Worker

High

Intrapreneuring, Pinchot, 1985

Low

Low High

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Example: The Intrapreneur

http://www.bnet.com/article/how-they-did-it-seven-intrapreneur-success-stories/196890


Cheryl Pohlman

Worldwide Product and Marketing Communications Director for inkjet systems,

Inkjet printer division,

KODAK

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Jeri Yoshizu

Scion Sales and Promotion Manager

Scion17

TOYOTA



Scott Gatz

Former Senior Director of Advanced Products

Sponsored search engine

YAHOO

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Alicia Ledlie

Senior Director for health business development

In-store health clinics

WALL MART

http://id.wikipedia.org/wiki/Andy_F._Noya


Andy Noya

Wartawan, Presenter, Host ‘Kick Andy’

Waklil Pemimpin Umum Media Indonesia

Pemimpin Redaksi Metro TV

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http://id.wikipedia.org/wiki/Yohanes_Surya


Prof. Yohanes Surya, PhD

Wartawan, Presenter, Host ‘Kick Andy’

Waklil Pemimpin Umum Media Indonesia

Pemimpin Redaksi Metro TV

http://id.wikipedia.org/wiki/Joko_Widodo


Joko Widodo

Walikota Solo

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Dahlan Iskan

Former President Director of PT. Perusahaan Listrik Negara

Minister of State-owned Corporations

Intrapreneurial Process Model

de Jong and Wennekers (2008), Mair (2002), Antoncic and Hisrich (2001)

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Intrapreneurial is an attitudes, skills, behaviors

Modified from Intrapreneurship, de Jong & Wennekers, 2008

Taking Initiative: self starting, proactive, persistence

Innovative: implement vision to increase benefit/cost

Voicing

Championing

Taking Charge

Some Degree of Risk Taking

Recombination of Resources

Resource Acquisition

Planning and Organizing

Modified from Intrapreneurship, de Jong & Wennekers, 2008

Intrapreneurship is a process...

Opportunity perception

Idea generation Internal coalition Building

Persuading the Management

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Grow from Within, Wolcott & Lippitz, 2010

The process by which teams within a established firm conceive, foster, launch, and manage a new business that is distinct from but leverages the company’s current assests, markets, and capabilities

Corporate Entrepreneurship

Value capture

Innovation Radar A business system innovation

Solutions

Brand Platform

Networking


Customer experience

Supply chain

Organization

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The 4 Model of Corporate Entrepreneurship

Enabler

Company provide funding & attention to prospective

projects (ex: Google)

Producer

Company supports a full-service group with special mandate (ex: IBM, Cargill)

Opportunist

Internal & external networks drive concept selection & resource allocation (ex:

Zimmer)

Advocat

Company evangelizes for corporate entrepreneurship, funded by business unit (ex:

DuPont)

Diffused Focused

Ad Hoc

Dedicated


Incentive Design for Corporate Entrepreneurship

The 4E Model, Viswanathan, Nagarajan, 2004 ESADE MBA Business Review

1. Prime Factor

Human Element; Critical Success Factor; Autonomy, Structure, Processes

2. Incentive System Parameters

Short-Term vs Long-Term; Performance Relatedness; Attracting and retaining

3. Incentive System Components

Financial, Non-Financial, Risk

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1. Prime Factor: Critical Success Factors

Success Factor Incentive Features

Enthusiasm and Continuing Commitment

Significant Earning Potencial

Direct relationship between incentives and performance

Competitiveness

Financial and symbolic significance

Rapidity of Feedback

Individualization

Effective Teamwork

Team-wide Incentives

Fairness of Distribution

Team Recognition

Organizational Support

Perception of Fairness

Balance between potential risks and rewards

Recognizing and Adapting to Reality

Payment for results, not for strict adherence to plan

Significant personal financial risk for venture managers

3. Incentive System Components: Financial


Equity and Equity-Related

Shares/ Options in parent firm/ venture

Phantom shares: If venture doesn’t exist as a separate entity

Encourages collaborative behavior

Purchased equity in new venture links risk to potencial reward

Relatively long term incentive

Bonuses

Three popular types Fixed amounts known in advance: Variable, per formance linked, Discretionary bonus after major contribution

Can be both long term as well as short term

Salary increases Salary increase is related to Changing role in the venture

Fringe benefits Holiday trips, Scholarships to Children Sabbaticals ,etc

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Top management support for venture

Presence of a management champion for th

Increased resources: money or personnel

Autonomy Freedom Independece

Basic motivation of intrapreneur is to realize his vision in his own way: Autonomy

Intrapreneur does not have to take management permission for every move: Freedom & Independence in operation

Recognition

Recognition is not just a gesture, it is an empowerment tool

Manifested through recognition ceremonies, awards and corporate publications

Authority Responsibility Power

Subtle incentives

Only explicit way of awarding these incentives is through promotions

Promotion to broadened responsibilities is the fundamental corporate reward

3. Incentive System Components: Non-Financial


Financial Risk

Opportunity cost of leaving some other division and working for new venture

Possibility of missing out on incentives due to the inherent risk of the new venture

Career Risks Working for the new venture may become a Stumbling block in

the employee’s career. He may miss out on promotions, etc

Job Security and benefits related risk

Firms sometimes don’t guarantee jobs in case of venture failure. This creates job security risk.

While joining new venture employees often have to give up standard benefits package

Effort & Stress A new venture, by its inherent nature, is often more stressful and

difficult than an established venture

3. Incentive System Components: Risk

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Pre-Launch Small discretionary bonus could be provided on

completions of feasibility and concept study

Product Development Stage

Medium to significant bonus on ontime, within estimated budget, product development

Needs built in quality protection provisions

Startup Bonus could be calculated as a % of the difference

between planned and actual startup expenses

Ongoing Sales and Production

Percentage of dollar amount improvement over planned profit or loss to be shared by venture team

Post Venture Maturity stages

Payout mechanism for venture personnel who voluntarily leave or are transferred or discharged

Lifecycle Incentive Approach

Intrapreneuring Phase

No Phase Description

1 Solo phase self vision, no-ego barrier, write down your idea & concept

2 Network phase

share your idea, getting feedback to elaborate strength & weakness and suggestion

3 Bootleg/ Informal phase

Start getting supporter without company back-up, fine tuning style of early team

4 Formal phase

Getting management support, Recruiting formal team, legitimacy & leadership, maintain expectation

5 Execution Resource recombining & acquisition, Implementation

Modified from Intrapreneuring, Pinchot, 1985

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Entrepreneurship vs Intrapreneurship

Intrapreneurship is part of entrepreneurship, but differ in term of:

Resource: existing network, corporate reputation, market

penetration, technology base, competence human resource, financial

Risk

Autonomy

Share

Intrapreneurship Development

Learning Environment Framework for Successful Corporate Entrepreneur, Rupcic, Zekic, Kutnjak,

2010

Desentralized Organization

Learning Orientation

Learning

Culture

Transformational Leadership

Organizational Learning

INTRAPRENEURSHIP

Organizational Performance

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The Intrapreneur’s 10 Commandments

1. It’s easier to ask for forgiveness than for permission

2. Do any job needed to make your project work, regardless of your job description

3. Ask for advice before resources

4. Recruit strong team

5. Honor your sponsors

6. Underpromise and overdeliver

7. Be true to your goals, but realistic about ways to achieve them

8. Forget pride authorship, spread credit widely

9. When you bend the rules, keep the best interests of the company and its customer in mind

10. Prepare to be fired