Corporate Entrepreneurship

ANY ESTABLISHED FIRM

• Start as a startup
• No rules → Start with an opportunity & idea → go through iterative
method (means-end relationship, effectuation process) -> try to focus on
some mean-end → Firm will grow → Difficulty to increase operation and
sells due to entrepreneurial culture & lack of efficiency
• Multidivisional structure → Divide work → Number of employees grows
→ Efficiency → Have to create organizational routines & capabilities (by
doing same repetitive works) → Organizational rigidity
• Then, established firms struggle to find new entrepreneurial ideas → Sells
decreases → Firms do not survive → Death
• Corporate Entrepreneurship
 Apple Watch
• Steve Jobs – The role of CEO
• Most innovative company
• speed of new product introduction to market, lean R & D processes,
exploitation of technological platforms, and systematic exploration of
adjacent markets
• Breakthrough innovation
• Long term investment – risky investment
• Easy to use
• Hierarchy – Fast process , Meeting with VPs on every Monday
• Design team – freedom, innovative packaging
• Secrecy – no one can copy , loyal people , fast & proactive
 Entrepreneurial Orientation
• Innovativeness
• Risk taking
• Proactiveness
 Objective
• To learn how to identify, organize and build a new
enterprise
• We don’t just study entrepreneurs, we become
entrepreneurs.

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 Why?
• Control your own destiny – beg vs. create awesome job
• Attackers vs. Defenders: Attackers make all the money & have
all the fun, e.g., Zuckerberg, Jobs
• Change the world
• Nothing will use your talents more than starting a company!

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 Where to start
• An Idea!

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 Let’s go back to 1887
• You are Thomas Edison
• Just invented the light bulb
• Now build a plan for a business
• How would you do this?

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 Beginning of Business Plan
• Trying to accomplish? Wiring of America
• To be done? Transmission and distribution
• Protect the IP? Yes & how.
• Market size? U.S. population/households plus businesses - about the same
overseas – Demand for Light= a*Time + b*Income + Constant c*Independent
Variable………..
• Forecasting Y=
• Competition? Kerosene lamps, SOSO, etc. What people will you need? #’s,
skills, location
• What’s your sales model?
• Time to ramp up? Years
• How much capital? Millions but start small = Sources of Income & Costs

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 Why Exceptional Opportunity?
• There are many opportunities within the idea; job is to pick
one & focus - explain why & growth strategy.
• Should you go into the transmission business? Distribution?
Equipment?
• Must concentrate attack to increase chance of success with
limited resources
• Now why is this so interesting & exciting?
• Numbers!
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 Risks
• You would deal with a list of problems that you would have to
address. How serious is each problem? When would you have
to address the problem?
• You would detail what are the risks in your plan -
technological and market - and how you would reduce risks.
• You would detail who the stakeholders would be, and your
value proposition to each one.
• You would understand a typical sales call.

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 Summarize the Market
• population/ households = $ for natural gas + $ for
candles/whale oil =
• Total Addressable Market (TAM)
• Market Penetration %
• 1889….1890….1891
• You would build a model by making some assumptions!

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 Some New Markets You Might Suspect
but Can’t Quantify
• Is your market “Light”…or is it “Power”? Example:
Elevators. Small motors for refrigerators, typewriters.
• If you could estimate even a portion of that, you would
multiple it by a certainty equivalent... And come to a
number that you could feel was in the ballpark.
• “Our first market is rich households in New York City
within 1 mile of our generating facility”

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 Why?
• You have limited resources
• You want early adopters
• You want homes that could afford to wire
• You want homes that afford your price and which could lend
“status” to your “value proposition”
• You want homes that will impress investors.

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 Where to start
• Your Idea!

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Vision and its Formation

Vision & Goal Setting

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 Three Questions for Entrepreneur
1.Where do I want to Go?
2.How will I get There?
3.Can I do It?

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 Vision charts the path an organization chooses

Today: Journey of Visioning Future:

Known 1. What do we stand for? Unknown
2. What do we aspire to become?

“Visioning is the ability to see beyond our present reality, to create, to

invent, what does not yet exist, to become what we not yet are.”

Stephen Covey, ‘First Things First’ 21

>>>Executing the Balanced Scorecard
Effective vision statements have eight characteristics …

1. Imaginable 2. Future-oriented 3. Desirable 4. Feasible

Describes the goal; Expresses long-term Appeals to long-term Lays out realistic yet
serves as a clear goals or aspirations for interests of internal, ambitious goals
guideline for strategic the organization and its external stakeholders
decisions stakeholders

8. Easy
5. Specific 6. Flexible 7. Unique to associate &
communicate
Clearly guides decisions; Allows firm to proactively Provides a differentiated
Every employee can
helps decide what firm can cope with changes in the identity & strategic
relate to it
and cannot do environment direction
Is simple enough to be
communicated within 5
minutes
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 Core
Ideology

Vision
Statement
Envisioned
Future

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 Sony in the 1950s
Core Values
Core
Ideology
Purpose
Vision
Goal
Envisioned
Future Vivid
Description
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 Sony in the 1950s : Core Values
• Elevation of the Japanese culture and national
status
• Being a pioneer-not following others; doing
the impossible
• Encouraging individual ability and creativity

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 Sony in the 1950s : Purpose
• To experience the sheer joy of innovation and
the application of technology for the benefit
and pleasure of the general public

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 Sony in the 1950s : Vivid Description
• We will create product that become pervasive around
the world... We will be the first Japanese company to
go into the US market and distribute directly... We will
succeed with innovation that US companies have failed
at-such as the transistor radio...Fifty years from now,
our brand name will be as well known as any in the
world...and will signify innovation and quality that rival
the most innovative companies anywhere.... “Made in
Japan” will mean something fine, not something
shoddy.
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 Sony in the 1950s : Vision
• Become the company most known for
changing the worldwide poor-quality image of
Japanese products

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Vision, Goal Setting and Strategy

Vision & Goal Setting

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>>>Executing the Balanced Scorecard
It provides a goal to the firm and ensures
effective communication to all stakeholders
Customers
Society Shareholders

Vision
Company
goals and
performance
Regulators Employees

Strategic
Suppliers
Partners
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>>>Executing the Balanced Scorecard
Overall, vision is a powerful tool to manage
change, communicate and execute on strategy

• Provides common goals

1 • Provides a tangible symbol
3
• Clarifies purpose of Create • Motivates people
Commun-
actions and decisions to common • Ensures strategy can be easily
investors, analysts and icate to vision communicated
regulators external and
stake- culture
holders

2 • Sets criteria for strategic decisions

Guide strategic • Defines and communicates priorities
management • Helps co-ordinate actions of different
decisions people in a fast and efficient way
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 Vision, Goal, Strategy and Performance
Strategic
Analysis

Strategy
The centrally
integrated,
Vision Goals externally Performance
oriented of how
we will achieve
our objectives

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 Vision statements are not static; they evolve with
the organization and its environment

“Create seamless
“A personal computer “Empower people experiences that
on every desk and through great combine the power
in every home, software - of the internet with
running Microsoft anytime, anyplace, the magic of
software.” and on any software across a
device.” world of devices.”

1975 1999 2008

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 Success of Start-ups
• Timing!

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What is Creativity?

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 What Is Creativity?

• Along with the profit motive, risk taking, opportunity

recognition and the creation of an enterprise, creativity and
innovation are also fundamental aspects of entrepreneurship.
• Creativity is the ability to make sense of the world in new
ways, to discover hidden patterns and make connections
between seemingly unrelated phenomena.
• This is done for the purpose of generating solutions to
problems, which is the main focus of the creative individual.
• Exercising creativity requires three fundaments—experience,
skill and talent. The greater the experience, skill and talent
set, the greater the scope for creative thinking.
How?

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 Thinking about Professor Younus, ‘World’s
Banker to the Poor’ from Bangladesh

Do you believe he exercised creativity? How did he do so?

Barriers to Creativity: Some Exercises

• In the next three minutes, write down as

many uses for a metal coat hanger that
you can think of.
How did you visualize your metal coat hanger?
But these are also metal coat hangers
Cover the nine dots
with four straight
and continuous lines.
In other words the
lines must be drawn
without lifting the
pencil off the paper.

[Majaro 88]
Solution
• Carl wins: Carl wins race after race, he is the
fastest runner, yet he gets no trophy, why?
• To light a fire: You are hiking with a friend in the
deep woods of northern Canada. A cold front
quickly approaches and you find cover behind a
sheltered boulder. A fire will be necessary if you
are to survive the storm. In your pack you have
only one match, a candle, a tightly wound ball of
birch bark and a roll of toilet paper. Which would
you light first?
• A good guess? There is a man who guesses the
score of every football game before kick-off. How
can he do this?
• Digging dirt: How much dirt is in a round hole that
is 7 feet deep with a diameter of 4.5 feet?
• The crazy cat: A cat jumped out of the window of a
30-storey apartment building and lived. How?
• One-way street: A girl who was just learning to
drive went down a one-way street in the wrong
direction, but did not break the law. How come?
• Saw purchase: A profoundly deaf person decides
that he wants to build some shelves, so he heads
down to the hardware store to buy a saw. How
does he let the assistant know that he wants to
buy a saw?
We can be tricked
Your brain is fairly accurate when it makes
assumptions—most of the time, not all.

Aoccdrnig to rscheearch at Cmabrigde Uinervtisy, it

deosn’t mttaer in waht oredr the ltteers in a wrod are,
the olny iprmoatnt tihng is taht the frist and lsat ltteer
be at the rghit pclae. The rset can be a toatl mses and
you can sitll raed it wouthit a porbelm. Tihs is bcuseae
the huamn mnid deos not raed ervey lteter by istlef, but
the wrod as a wlohe.
 Ask interesting questions…
For example… ‘Why do we always do it that
way?’

Why is the US rail system 4’ 8.5” wide?

So why is the British rail system 4’ 8.5” wide?

‘Why do we always do it that way?’

So why were chariot’s wheels that wide?

‘Why do we always do it that way?’

Conclusion
4’ 8 I/2” wide = 2 horses rears
What is Jack Ma’s secret for the ‘creative
mindset’?
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How?

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SCAMPER

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 SCAMPER

• Creativity Technique
S: Substitute
Substitute
What can you substitute? What can be used
instead? Who else instead? What other
ingredients? Other material? Other process?
Other power? Other place? Other approach?
Other sounds? Other forces?

Example: I want to invent a new type of pen.

Substitute: Ink with iron, nib with knife.
C: Combine

Combine
What can you combine or bring together
somehow? How about a blend, an alloy, an
assortment, an ensemble? Combine units?
Combine purposes? Combine appeals? Combine
ideas?
Combine: Writing with cutting,
holding with opening.
A: Adapt
Adapt
What can you adapt for to use
as a solution? What else is like
this? What other idea does this
suggest? Does past offer a
parallel? What could I copy?

Adapt: Pen top as

container.
M: Modify
Modify
Can you change the item in some way? Change
meaning, colour, motion, sound, smell, form,
shape? Other changes?
Also: Magnify—what can you add? More time?
Greater frequency? Stronger? Higher? Longer?
Thicker? Extra value? Plus ingredient? Duplicate?
Multiply? Exaggerate?
And: Minify—what can you remove? Smaller?
Condensed? Miniature? Lower? Shorter? Lighter?
Omit? Streamline? Split up? Understate?
Modify: Body to be flexible or make the
pen extra large or really small.
P: Put to other uses
Put to other uses
How can you put the thing to different
or other uses? New ways to use as is?
Other uses if it is modified?

Put to other uses: Use the pen to write on wood.

E: Eliminate

Eliminate
What can you eliminate? Remove
something? Eliminate waste? Reduce
time? Reduce effort? Cut costs?

Eliminate: Clip by using Velcro

R: Rearrange
Rearrange
What can be rearranged in some way?
Interchange components? Other pattern?
Other layout? Other sequence? Transpose
cause and effect? Change pace? Change
schedule?

Rearrange: Nib to fold outwards.

 Your Turn to SCAMPER

You have a cardboard box. Apply SCAMPER to

the cardboard box. Record your answers for
each on your chart paper. You may draw pictures
to help you explain your answers.

S: Substitute P: Put to other uses

C: Combine E: Eliminate
A: Adapt R: Rearrange
M: Modify
 SCAMPER
Put together a team of colleagues whose
thinking and world views do not necessarily
resonate with yours, but you could still work
together effectively. Take anything familiar
with a known outcome, for instance, socks
sold in pairs to ‘ensure uniformity’, fizzy drinks
tasting sweet to ‘ensure pleasure through
taste’ or using a toothbrush and paste for
brushing your teeth to ‘ensure dental hygiene’
and re-imagine it. Think first about ‘why do
we always do it this way?’. As a result of
asking this question, your team will develop
assumptions and explanations which might
come across as quite convincing and practical.
Storyboarding

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 Storyboard

Choose a relatively new and interesting ‘home-grown’

product or service in common use within your
community—one which you feel creatively solves a
problem. It could be a phone application, electronic device
or personal hygiene product. Hold an interview with the
creator of your chosen product or service—ascertain how
specifically they came up with the idea. Delve into the
history of the idea creation process and unearth the
conditions and results of any trial and error that led to the
final shape or form of the chosen produce/service. Depict
your findings visually as a storyboard. Draw out major
lessons.
The creative mindset will require challenging each
of these assumptions by turning them upside
down. Use the SCAMPER technique for doing this
and completely reimagine the process of
delivering your chosen outcome. Share what you
have come up with the class and generate
feedback.
Six Thinking Hats

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Thank You