Corporate Entrepreneurship: Developing Internal Innovation

Entrepreneurial Thinking   The contemporary thrust in entrepreneurship as the major force in American business has led to a desire to foster this type of activity inside enterprises Intrapreneurship – entrepreneurial activity inside the corporation where individuals (intrapreneurs) “champion” new ideas from development to complete profitable reality .

including the following: – Required changes.Entrepreneurial Thinking The desire to pursue corporate entrepreneurship has arisen from a variety of pressing problems. and improvements in the marketplace to avoid stagnation and decline – Perceived weaknesses in the traditional methods of corporate management – The turnover of innovative-minded employees who are disenchanted with bureaucratic organizations Embrace change or be out of business! . innovations.

in association with an existing organization. and corporate venturing are all important and legitimate parts of the corporate entrepreneurship process. . Thus strategic renewal.Defining the Concept Corporate entrepreneurship is a process whereby an individual or group of individuals. creates a new organization or instigates renewal or innovation within the organization.

Corporate Intrapreneuring “…renewal within the organization…” as distinguished from internal Corporate R&D .

Corporate Intrapreneuring “…renewal within the organization…” .

Elements of a Corporate Intrapreneuring Strategy   Developing the Vision Encouraging Innovation – Radical innovation – unprecedented breakthroughs – Incremental innovation – systematic evolution of a product or service into newer or larger markets   Forming Venture Teams Structuring for an Intrapreneurial Climate .

3M’s Rules that Encourage Employees to Foster Ideas       Don’t kill a project Tolerate failure Keep divisions small Motivate the champions Stay close to the customer Share the wealth .

Forming Venture Teams Collective Entrepreneurship – Where individual skills are integrated into a group and their collective capacity to innovate becomes something greater than the sum of its parts .

Another method…   Fund the development of a separate product team whose purpose is to keep the “heartland” product “evergreen” Internal competitive teams – knowledgeable of each other or – “hidden”  Political competitiveness can be helpful but more often detrimental .

Product Improvements Over Time (more detailed) Trajectory of a technology evolution Product Performance improved original improved again 50% adoption Time .

Product Improvements Over Time (more detailed) Trajectory of a technology evolution Product Performance improved original improved again 50% adoption Time .

Another method…  Fund the development of a new product team whose purpose is to replace the “heartland” product .

also known as “The Paperless Office” – Xerox Start introduced in 1981 (before the IBM PC with twopage bitmap displays.Replace the “Heartland”  Xerox: xerographic technology – inkjet (type I and type III) – magnetography – electrophoresis  Xerox: paper – “Office of the Future”. networked printers and file servers and Ethernet access)  Kodak: silver-based photography – Non-silver-based phgotography – Digital photography – Digital cameras .

Hewlett Packard: HPUX – OS/2 – Linux . POWERade. Evian. DASANI. Clear Coke – “Clear” sodas (Sprite. Sparkletts. Fresca. etc. Mad River. etc.Replace the “Heartland”  Toyota: internal combustion engine – Electric propulsion – Hybrid propulsion – Fuel cells  Cola Cola Corporation – New Coke.)  IBM: AIX.) – Higher end drinks (Odwalla. KMX.

Replace the “Heartland”    Often very threatening to the “heartland” team Can cause internal divisions and strife if not explained very well Your competition is trying it: If a replacement technology or product or service can be found. you’d better get there first! .

Replace the “Heartland” .

Business Planning 6. Assessment of Current Culture 5. Intrapreneuring 4.Structuring for an Intrapreneurial Climate Intrapreneurship Training Program 1. Action Planning . Introduction 2. Personal Creativity 3.

Corporate Entrepreneurship Assessment Instrument (CEAI) Developed to measure key entrepreneurial climate factors  Five factors:  – Management support for entrepreneurship – Risk-taking activity – Rewards – Resource availability – Organizational boundaries .