Can We Drive Growth and Innovation through Corporate Entrepreneurship?

Editor's Note: Take a look at our featured best practice, Design Thinking (225-slide PowerPoint presentation). [NOTE: Our Design Thinking presentation has been trusted by an array of prestigious organizations, including industry leaders such as Apple, MIT, NASA, Ford, Boeing, Fujitsu, Syngenta, Palo Alto Networks, and Mercer, to name just a few.] Design Thinking is [read more]

Also, if you are interested in becoming an expert on Innovation Management, take a look at Flevy's Innovation Management Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

* * * *

Foremost, what exactly is “Corporate Entrepreneurship?”

Corporate Entrepreneurship is defined as the process by which teams within an established organization conceive, develop, launch, and manage a new business that is distinct from the parent organization by leveraging the parent organization’s resources.

Corporate Entrepreneurship encapsulates more than just New Product Development. It also includes ventures to drive innovations in services, brands, channels, etc. Likewise, it can involve breaking from the existing business model of the parent organization–i.e. Business Model Innovation (BMI).

Studies have shown Corporate Entrepreneurship stimulates Innovation, revitalizes the organization, increases employee productivity, propels growth through disruptive offerings, and creates a superior market advantage. In fact, Corporate Entrepreneurship is a cost-effective approach to promote and maintain a Competitive Advantage.

So, how do we adopt and drive Corporate Entrepreneurship?

Well, there are 4 dominant models of Corporate Entrepreneurship. The model an organization adopts is dependent on how it’s positioned along 2 dimensions–organizational ownership and resource authority. Organizational ownership refers to who within the organization has primary ownership for the creation of the new venture. Resource authority addresses how the venture is funded and resourced.

These 4 models, and how they map against the dimensions, are depicted in the slide below.

Let’s dive a bit deeper into each of these operating models.

The Opportunist

All organizations begin here as the Opportunist, where there is little organizational ownership or resource authority. Under this model, the organization has no deliberate approach to Corporate Entrepreneurship. Internal and external networks drive concept selection and resource allocation.

Since Corporate Entrepreneurship is not being actively managed in the Opportunist model, this model only works well in trusting Corporate Cultures. The Culture should also be fostered to support experimentation and Innovation. Without this type of environment, many ideas can fall through the organizational cracks or never receive sufficient funding.

Usually, after seeing some success in its entrepreneurial endeavors, the organization will start formalizing and adopting one of the other models.

The Enabler

The goal under the Enabler model is to facilitate entrepreneurial employees and teams. Thus, under this model, the organization provides both funding and senior management attention to prospective Corporate Entrepreneurship projects. The thinking here is that employees will be willing to develop new ideas if they have adequate, foundational support.

A great example of the Enabler organization is Google. In fact, both Gmail and Google Maps began as employee side projects.

Google allows employees to spend 20% of their time working on Corporate Entrepreneurial projects. Activities include promoting their ideas to colleagues, assembling teams, and building prototypes. At any given time, Google is supporting over 100 new business ventures at various stages of development. If a project succeeds, the team members are awarded significant bonuses (designated Founder’s Awards)—up to millions of dollars.

The Advocate

The Advocate model exhibits strong organization ownership by evangelizing and promoting Corporate Entrepreneurship. There are 2 primary strategic goals of the Advocate:

1. Reinvigorate or transform Business Units.
2. Support Corporate Entrepreneurship teams.

The Producer

The final, and most mature model, is the Producer. As the most mature model for Corporate Entrepreneurship, the Producer provides full-service support by conceiving, screening, funding, coaching, scaling, and reintegrating new business concepts. This type of organization can even establish a Center of Excellence (CoE) for Corporate Entrepreneurship projects.

Interested in learning more about Corporate Entrepreneurship and its 4 operating models?  Take a look at our framework on Corporate Entrepreneurship.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

“Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”

– Omar Hernán Montes Parra, CEO at Quantum SFE

Want to Achieve Excellence in Innovation Management?

Gain the knowledge and develop the expertise to become an expert in Innovation Management. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

To be competitive and sustain growth, we need to constantly develop new products, services, processes, technologies, and business models. In other words, we need to constantly innovate.

Ironically, the more we grow, the harder it becomes to innovate. Large organizations tend to be far better executors than they are innovators. To effectively manage the Innovation process, we need to master both the art and science of Innovation. Only then can we leverage Innovation as a Competitive Advantage, instead of viewing Innovation as a potential disruptive threat.

Learn about our Innovation Management Best Practice Frameworks here.