Flevy Management Insights Case Study

Innovative Corporate Entrepreneurship Model for Industrials in North America

     David Tang    |    Corporate Entrepreneurship


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Corporate Entrepreneurship to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR A leading industrial equipment manufacturer faced challenges in integrating Corporate Entrepreneurship, resulting in a stagnant innovation pipeline and missed market opportunities. The initiative successfully launched 15 new initiatives, increased revenue by 5%, and improved employee engagement by 20%, highlighting the importance of cultivating an entrepreneurial culture for sustained growth.

Reading time: 8 minutes

Consider this scenario: A leading industrial equipment manufacturer in North America is struggling to integrate entrepreneurial initiatives within its corporate structure.

Despite a robust market presence, the company's innovation pipeline is stagnant, leading to lost market opportunities and diminishing competitive edge. The organization is seeking to foster a culture of Corporate Entrepreneurship to drive innovation, agility, and growth amidst a rapidly evolving industrial landscape.



Initial observations suggest that the industrial equipment manufacturer's stagnation in innovation may be rooted in a lack of structured Corporate Entrepreneurship frameworks and an organizational culture that does not effectively support entrepreneurial behavior. Another hypothesis could be that there is a misalignment between the company's strategic objectives and its innovation initiatives, leading to ineffective resource allocation and a lack of direction for intrapreneurial teams.

Strategic Analysis and Execution Methodology

The effectiveness of Corporate Entrepreneurship can be significantly enhanced by adopting a structured, phased approach, which offers a comprehensive roadmap for fostering innovation and entrepreneurial behavior within the organization. This methodology not only streamlines the process but also ensures alignment with the company's strategic objectives, ultimately driving sustained growth and competitiveness.

  1. Assessment of Corporate Entrepreneurship Landscape: Review the current state of entrepreneurial activities, culture, and processes. Identify barriers to innovation and assess the alignment with strategic goals.
  2. Strategy Formulation: Develop a clear Corporate Entrepreneurship strategy that includes defining vision, objectives, and governance structures. Align this strategy with overall business goals to ensure coherence and support from leadership.
  3. Program Design and Implementation: Design a tailored Corporate Entrepreneurship program with clear processes for idea generation, evaluation, and incubation. Implement pilot projects to test and refine the program.
  4. Monitoring and Scaling: Establish metrics to monitor the performance of entrepreneurial initiatives. Scale successful projects and integrate them into the broader organizational fabric.
  5. Culture and Capability Building: Foster an entrepreneurial culture through training, incentives, and communication. Develop capabilities necessary to support ongoing entrepreneurial activities.

For effective implementation, take a look at these Corporate Entrepreneurship best practices:

Corporate Entrepreneurship Primer (24-slide PowerPoint deck)
Corporate Entrepreneurship Program Development (31-slide PowerPoint deck)
Hypergrowth Curve (157-slide PowerPoint deck)
View additional Corporate Entrepreneurship best practices

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Corporate Entrepreneurship Implementation Challenges & Considerations

In executing the above methodology, executives may raise concerns regarding the integration of entrepreneurial projects with existing operations without disrupting core business functions. Addressing this requires a careful balance of autonomy and oversight to ensure that entrepreneurial initiatives complement rather than compete with the core business.

Another consideration is the measurement of success in Corporate Entrepreneurship. While traditional financial metrics are important, it’s also critical to evaluate the strategic value of innovations, even those that do not immediately contribute to the bottom line.

Lastly, the risk of failure in entrepreneurial ventures is inherent and can be a source of resistance within established companies. It is vital to establish a culture that not only tolerates but also learns from failure to truly embrace the entrepreneurial spirit.

Upon successful implementation of the Corporate Entrepreneurship methodology, organizations can expect to see an increase in the number of viable new product or service launches, enhanced operational agility, and improved employee engagement and retention. These outcomes should be quantifiable through increased revenue streams from new ventures, a higher rate of successful project implementations, and measurable improvements in employee satisfaction scores.

Implementation challenges may include resistance to change, particularly from middle management, difficulties in aligning the various parts of the organization around entrepreneurial activities, and the challenge of maintaining momentum after the initial excitement of the program launch has faded.

Corporate Entrepreneurship KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


What gets measured gets done, what gets measured and fed back gets done well, what gets rewarded gets repeated.
     – John E. Jones

  • Number of new initiatives launched: Indicates the level of entrepreneurial activity and innovation within the company.
  • Percentage of revenue from new products/services: Reflects the financial impact of Corporate Entrepreneurship on the company’s growth.
  • Employee engagement scores: Serves as a proxy for the cultural adoption of entrepreneurial values and practices.

For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.

Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard

Implementation Insights

Real-world statistics from McKinsey & Company highlight that organizations with advanced Corporate Entrepreneurship capabilities are 3.5 times more likely to achieve above-average growth. This emphasizes the importance of building a mature Corporate Entrepreneurship function as a key driver of innovation and competitiveness.

One of the critical insights from implementing Corporate Entrepreneurship is the realization that not all employees are natural entrepreneurs. Therefore, it is crucial to identify and empower those with entrepreneurial traits while providing the necessary support and resources for others to contribute to innovation in ways that align with their skills and interests.

Another insight is the role of leadership in setting the tone for an entrepreneurial culture. Leaders must actively encourage experimentation, provide clear strategic direction, and be willing to accept the risks associated with innovation.

Corporate Entrepreneurship Deliverables

  • Corporate Entrepreneurship Strategic Plan (PowerPoint)
  • Innovation Pipeline Dashboard (Excel)
  • Entrepreneurial Culture Assessment Report (PDF)
  • Corporate Entrepreneurship Training Toolkit (PDF)
  • Program Implementation Roadmap (PowerPoint)

Explore more Corporate Entrepreneurship deliverables

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Corporate Entrepreneurship Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Corporate Entrepreneurship. These resources below were developed by management consulting firms and Corporate Entrepreneurship subject matter experts.

Ensuring Alignment with Corporate Strategy

Ensuring that Corporate Entrepreneurship initiatives align with the broader corporate strategy is critical. Misalignment can lead to wasted resources and initiatives that do not contribute to the company's goals. To avoid this, companies must establish a clear strategic framework that defines the role of entrepreneurship within the company's vision and objectives. This framework should be revisited regularly to adapt to changes in the business environment and internal corporate direction.

According to a study by BCG, companies that align innovation projects with business strategy see 40% higher returns on innovation investment compared to those that do not. Therefore, it is imperative for organizations to implement a strategic alignment process that continuously evaluates and adjusts the fit between entrepreneurial initiatives and the company's long-term objectives.

Fostering an Entrepreneurial Culture

Cultivating an entrepreneurial culture within a traditional corporate environment is challenging but essential for the success of Corporate Entrepreneurship. This involves more than just encouraging creative thinking; it requires structural changes such as implementing flexible processes, establishing autonomy for teams, and creating incentive systems that reward innovation. Leadership must consistently communicate the value of entrepreneurship and be visibly committed to supporting it.

Research by Deloitte indicates that companies with a strong, clearly defined sense of purpose are more likely to encourage innovation and entrepreneurial thinking among their employees. Leaders in these organizations are also more likely to consider societal impact and employee fulfillment as important as financial performance, which further reinforces an innovative culture.

Measuring the Success of Corporate Entrepreneurship

Measuring the success of Corporate Entrepreneurship initiatives is complex, as traditional financial metrics may not fully capture the strategic value of innovation. Companies must develop a balanced scorecard that includes both financial and non-financial KPIs, such as the number of ideas generated, the conversion rate of ideas to projects, and the impact on customer satisfaction or market share. This approach allows for a more nuanced understanding of the program's effectiveness.

Accenture's research underscores the importance of non-financial metrics, revealing that companies that focus on innovation as a key component of their growth strategy are twice as likely to use non-financial indicators to measure success. These indicators can provide early signals of progress and potential, guiding strategic decisions and investments.

Managing the Inherent Risks of Innovation

Innovation entails risk, and companies must manage this risk without stifling the entrepreneurial spirit. One way to do this is by adopting a portfolio approach to innovation, spreading the risk across a range of projects with different risk profiles. Companies should also establish clear criteria for evaluating and discontinuing projects, ensuring that resources are reallocated quickly and effectively when necessary.

According to McKinsey, a well-managed portfolio of innovation initiatives can yield a risk-adjusted value that is 2.7 times the cost of the investment. This demonstrates the potential for significant returns when risks are managed effectively within a Corporate Entrepreneurship framework.

Scaling Successful Innovations

Scaling successful innovations is another common challenge for companies. To address this, organizations must have processes in place to identify successful initiatives quickly and mobilize resources to support their growth. This often requires cross-functional collaboration and the ability to integrate innovations into the existing business without disrupting core operations.

PwC's Innovation Benchmark Report highlights that the most innovative companies are adept at scaling their best ideas and can do so quickly. They use agile methodologies to test, refine, and scale innovations, which is a critical capability in today's fast-paced business environment.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Launched 15 new initiatives within the first year, indicating a significant increase in entrepreneurial activity.
  • Achieved a 5% increase in revenue from new products/services, contributing to overall company growth.
  • Employee engagement scores improved by 20%, reflecting a stronger adoption of entrepreneurial values and practices.
  • Successfully integrated 3 pilot projects into the broader organizational operations, enhancing operational agility.
  • Developed and deployed a Corporate Entrepreneurship Training Toolkit, resulting in 30% of the workforce participating in innovation training sessions.

The initiative to foster a culture of Corporate Entrepreneurship within the industrial equipment manufacturer has been largely successful. The launch of 15 new initiatives and a 5% increase in revenue from these new products/services are tangible indicators of enhanced innovation and growth. The significant improvement in employee engagement scores by 20% is a testament to the effective cultural shift towards entrepreneurial thinking and behavior. The successful integration of pilot projects into the organizational fabric demonstrates operational agility and the ability to scale innovations. However, the challenge of aligning all parts of the organization around entrepreneurial activities and maintaining momentum post-launch indicates room for improvement. Alternative strategies, such as more focused alignment sessions and continuous momentum-building initiatives, could have further enhanced outcomes.

For next steps, it is recommended to focus on sustaining the momentum of Corporate Entrepreneurship initiatives. This includes setting up a dedicated innovation task force to ensure continuous alignment and support for new projects. Additionally, expanding the Corporate Entrepreneurship Training Toolkit to include advanced modules on scaling innovations and managing risks could further empower employees. Finally, establishing a more formalized feedback loop from all organizational levels will ensure that the program remains dynamic and responsive to both internal and external changes, thereby securing its long-term success.


 
David Tang, New York

Strategy & Operations, Digital Transformation, Management Consulting

The development of this case study was overseen by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.

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Source: Innovative Corporate Entrepreneurship Blueprint for Forestry & Paper Products Firm, Flevy Management Insights, David Tang, 2025


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