EMPLOYEE ENTREPRENEURSHIP

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INTRODUCTION

Employee entrepreneurship is the act of behaving like an entrepreneur while working within a large organization They focus on innovation and creativity, and transforms an idea into a profitable venture Every organization needs employees who demonstrate entrepreneurial qualities Companies need to indentify such candidates during interview

Entrepreneur vs. Employee Entrepreneur

Entrepreneur
A person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk Solely responsible for capitalization, marketing, and taxation & licensing requirements

Employee Entrepreneur
An employee of a large corporation who is given freedom and financial support to create new products, services, systems, etc., and does not have to follow the corporations usual routines or protocols

Traits Of Employee Entrepreneurship

Ability to deal with risk Results Oriented Growth Potential Team Player Multi-tasking Ability Creative Thinker

Why Employee Entrepreneurship?

Firms create competitive advantages by discovering new and better ways to compete in an industry and bringing them to market Encourage employees to be creative and to look for new ways to improve your current way of doing business An enterprise that does not daily innovate inevitably ages and declines

Their ideas are vehicles towards advancement

Increased value to organization

Companies Which Have Done It

3M
Example:- (Post it Notes)

3M scientist Spencer Silver invented a not so sticky adhesive in 1968. Spencer shared his idea through seminars in which he shared the features (and benefits) of this semi-adhesive to fellow 3M employees. But no one really caught the vision of his product for five long years. Finally, a co-worker, Art Frey, recognized the need for Spencer's idea

In 1974, a 3M Corporation employee Art Fry couldn't keep his hymns marked properly in his church choir book. After attempting various methods, he decided he'd try using some non-permanent adhesive that was available at his workplace. By placing this adhesive on the back of his markers, he found he could keep them secured in place and then easily peel them off when he was done

The man took his new discovery to the management at 3M With the company's support, the resourceful man researched and developed a new product.

Twenty-five years later, Post-It Notes continues to be one of 3M's top-grossing products.

Creates an Internal Incubator to Support Employee Projects and Innovation

Under Incubator, engineers can get 30 to 90 days away from their regular work to develop ideas of their own into products.
Their ideas must first be developed into prototypes and clear two rounds of judging, with founder Reid Hoffman and CEO Jeff Weiner involved in the final round. Many ideas submitted to Incubator come from LinkedIns monthly hack days, in which workers can win awards for small bits of quickly written software.

Case Study
Innovation Time Off program This program empowered and encouraged to spend 20% of their work time on projects that interest them and they think will benefit Google and their customers

This program allows good ideas spread fast, encourages collaboration, and fosters constructive input

For a Google employee to participate in the Innovation Time Off intrapreneurship program they need to prepare and submit a project proposal with a timeline

Several Googles newest products and service and services, such as Gmail, Google News, Orkut, and AdSense all were originated from Googles Innovation Time Off intrapreneurship program

BENIFEITS
"Fifty percent of what Google launched in the second half of 2005

actually got built out of 20% time."

SPIN OFF

DEFINITION

The process of splitting off certain parts of the company and found them as separate independent businesses. The shares of the new company are given to the shareholders of the existing company (on a pro rata basis). The transfer of product knowledge and knowledge from the parent to the newly start up company is the most important aspect.

Its a event through which a new company is created and separated from its parent company. After the event there are 2 separate companies, each with their own outstanding share capital.

REASONS FOR A SPINOFF

Focus on its core activities More profitable Spun of activities can be better developed on their own The activities don't fit in the overall branding strategy Seize opportunities Management of the new company are employees from the old company For takeover purpose Tax advantages

CHARACTERISTIC OF SPIN OFF

Two separate entities Shares given on pro rata basis to shareholders No funds change hands nor assets are revalued Different from Equity carve outs, Splits offs and split ups Voluntary & Involuntary spin off

EXAMPLE OF A SPINOFF

An example of a spin off was that of a newly formed company called Reinet Investments SCA from its Parent Company Financire Richemont SA. Shareholders in Company Financire Richemont SA voted at the AGM (9 October 2008) to spin off its Richemont luxury goods business as part of a planned restructuring of the firm. It also sold off its stake in British American Tobacco Plc and set up a separate investment unit called Reinet Investments SCA. Richemont owns a portfolio of leading international jewellery, watch, writing instrument and accessories brands including the Chlo fashion label. What made this spin off so complex was that the spin off was actually a crossborder corporate action event whereby the parent company is a Swiss listed company and the spun-off entity a Luxemburg listed entity.

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