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

Entrepreneurial Thinking
The desire to pursue corporate entrepreneurship has arisen from a variety of pressing problems, including the following:
Required changes, innovations, 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!

Defining the Concept

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

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

3Ms Rules that Encourage Employees to Foster Ideas

Dont 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

Replace the Heartland

Xerox: xerographic technology

inkjet (type I and type III) magnetography electrophoresis

Xerox: paper
Office of the Future, also known as The Paperless Office Xerox Start introduced in 1981 (before the IBM PC with twopage bitmap displays, networked printers and file servers and Ethernet access)

Kodak: silver-based photography

Non-silver-based phgotography Digital photography Digital cameras

Replace the Heartland

Toyota: internal combustion engine

Electric propulsion Hybrid propulsion Fuel cells

Cola Cola Corporation

New Coke, Clear Coke Clear sodas (Sprite, Fresca, DASANI, Evian, Sparkletts, etc.) Higher end drinks (Odwalla, Mad River, KMX, POWERade, etc.)

IBM: AIX; Hewlett Packard: HPUX

OS/2 Linux

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, youd better get there first!

Replace the Heartland

Structuring for an Intrapreneurial Climate

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

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