CH 3: The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

5 critical steps of a corporate entrepreneurship strategy are:

(1) developing the vision (2) encouraging innovation (3) structuring for an entrepreneurial climate (4) preparing individual managers for corporate innovation (5) developing venture teams.

Methods to help restructure corporate thinking and encourage an entrepreneurial environment:

(1) early identification of potential innovators (2) top-management sponsorship of innovative projects (3) creation of innovation goals in strategic activities, (4) promotion of entrepreneurial thinking through experimentation (5) development of collaboration between innovators and the organization at large

Corporate entrepreneurship strategy has several linkages, which include:

(1) individual entrepreneurial cognitions of the organization's members (2) external environmental conditions that invite entrepreneurial activity (3) top management's entrepreneurial strategic vision for the firm (4) organizational architectures that encourage entrepreneurial processes and behavior (5) the entrepreneurial processes that are reflected in entrepreneurial behavior (6) organizational outcomes that result from entrepreneurial actions.

RUlES fOR an InnOvaTIvE EnvIROnMEnT

1. Encourage action. 2. Use informal meetings whenever possible. 3. Tolerate failure, and use it as a learning experience. 4. Persist in getting an idea to market. 5. Reward innovation for innovation's sake. 6. Plan the physical layout of the enterprise to encourage informal communication. 7. Expect clever bootlegging of ideas—secretly working on new ideas on company time as well as on personal time. 8. Put people on small teams for future-oriented projects. 9. Encourage personnel to circumvent rigid procedures and bureaucratic red tape. 10. Reward and promote innovative personnel.

5 Corporate Entrepreneurship Assessment Instrument (CEAI) key entrepreneurial climate factors

1. Management Support 2. Autonomy/Work Discretion 3. Rewards/reinforcement 4. Time availability 5. Organizational boundaries

5 important practices for establishing innovation-driven organizations follow:

1. Set explicit innovation goals. 2. Create a system of feedback and positive reinforcement. 3. Emphasize individual responsibility. 4. Provide rewards for innovative ideas. 5. Do not punish failures.

Preparing Management

1. The Entrepreneurial Experience. 2. Innovative Thinking. 3. Idea Acceleration Process. 4. Barriers and Facilitators to Innovative Thinking. 5. Sustaining Innovation Teams (I-Teams). 6. The Innovation Action Plan.

answers to these questions can inform the process to develop its own philosophy of corporate innovation:

- Does our company encourage entrepreneurial thinking? - Does our company provide ways for innovators to stay with their ideas? - Are people in our company permitted to do the job in their own way, or are they constantly stopping to explain their actions and ask for permission? - Has our company evolved quick and informal ways to access the resources to try new ideas? - Has our company developed ways to manage many small and experimental innovations? - Is our system set up to encourage risk-taking and to tolerate mistakes? - Are people in our company more concerned with new ideas or with defending their turf? - How easy is it to form functionally complete, autonomous teams in our corporate envi- ronment?

How a corporate entrepreneurship strategy is manifested through the presence of what 3 elements?

- an entrepreneurial strategic vision - a pro-entrepreneurship organizational architecture - entrepreneurial processes and behavior as exhibited across the organizational hierarchy.

Innovation

- chaotic and unplanned by some authors - a systematic discipline. 1. Radical 2. Incremental

middle-level managers

- endorse - refine - shepherd entrepreneurial opportunities - identify - acquire - deploy resources needed to pursue those opportunities.

First-level managers

- experimenting roles that correspond to the competence definition subprocess - adjusting roles that correspond to the competence modification subprocess - conforming roles that correspond to the competence deployment subprocess.

Factors in large corporations that have exhibited successful innovations:

1. Atmosphere and vision. 2. Orientation to the market. 3. Small, flat organizations. 4. Multiple approaches. 5. Interactive learning. 6. Skunk Works.

The Corporate Innovator's Commandments

1. Come to work each day willing to give up your job for the innovation. 2. Circumvent any bureaucratic orders aimed at stopping your innovation. 3. Ignore your job description—do any job needed to make your innovation work. 4. Build a spirited innovation team that has the "fire" to make it happen. 5. Keep your innovation "underground" until it is prepared for demonstration to the corporate management. 6. Find a key upper-level manager who believes in you and your ideas and who will serve as a sponsor to your innovation. 7. Permission is rarely granted in organizations; thus, always seek forgiveness for the "ignorance" of the rules that you will display. 8. Always be realistic about the ways to achieve the innovation goals. 9. Share the glory of the accomplishments with everyone on the team

Innovation team, or I-Team

2 < people who formally create and share ownership of a new organization. A small business operating within a large business, and its strength is its focus on design issues (i.e., on structure and process) for innovative activities.

Shared Mission and Vision

1. Belonging 2. Relationships 3. Structure 4. Commitment

Belonging

Having a purpose beyond the daily work

Intracapital

for the corporate entrepreneur to use whenever investment money is needed for further research ideas.

collective entrepreneurship

individual skills are integrated into a group; this collective capacity to innovate becomes something greater than the sum of its parts. Over time, as group members work through various problems and approaches, they learn about each other's abilities

Corporate Venturing

• Internal Corporate Venturing • Cooperative Corporate Venturing • External Corporate Venturing

intrapreneurship

AKA - corporate entrepreneurship - corporate innovation

Commitment

Active, committed participation of employees

Strategic entrepreneurship

By contrast, approaches have as their commonality the exhibition of large-scale or otherwise highly consequential innovations that are adopted in the firm's pursuit of competitive advantage. These innovations may or may not result in new businesses for the corporation.

DEfInIng CORPORaTE EnTREPREnEURShIP

Corporate Venturing Strategic Entrepreneurship

the resources of the organization are irrelevant to the ability of the corporate entrepreneur to implement an idea.

False

Structure

Local initiative and central synthesis

Relationships

Mutual trust and a supportive basic attitude prevail

as part of creating an innovative climate, a firm should base rewards given upon results achieved.

True

interactive learning

Within an innovative environment, investigation of ideas cut across traditional functional lines in the organization.

Corporate Entrepreneurship

a new "corporate revolution" taking place, thanks to the infusion of entrepreneurial thinking into large bureaucratic structures.

Skunk Works

a nickname given to small groups that work on their ideas outside of normal organizational time and structure.

Corporate venturing

approaches have as their commonality the adding of new businesses (or portions of new businesses via equity investments) to the corporation. Accomplished through 3 implementation modes: 1. Internal corporate venturing, 2. Cooperative corporate venturing 3. external corporate venturing.

Radical innovation

launching inaugural breakthroughs such as social networking, mobile computing, cloud storage, online dating, and green technologies. - Stimulate through challenges and puzzles. - Remove budgetary and deadline constraints when possible. - Encourage technical education and exposure to customers. - Allow technical sharing and brainstorming sessions. - Give personal attention—develop relationships of trust. - Encourage praise from outside parties. - Have flexible funds for opportunities that arise. - Reward with freedom and capital for new projects and interests.

what's an advantage to developing an entrepreneurial environment?

retention and motivation of the best employees

corporate innovative training program modules

sustaining innovation teams an entrepreneurial experience social media training and awareness

Incremental innovation

the systematic evolution of a product or service into newer or larger markets. Ex. microwave popcorn, popcorn used for packaging (to replace Styrofoam), frozen yogurt - Set systematic goals and deadlines. - Stimulate through competitive pressures. - Encourage technical education and exposure to customers. - Hold weekly meetings that include key management and marketing staff. - Delegate more responsibility. - Set clear financial rewards for meeting goals and deadlines.

3M innovative 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

Strategic Entrepreneurship

• Strategic Renewal • Sustained Regeneration • Domain Redefinition • Organizational Rejuvenation • Business Model Reconstruction

Corporate Entrepreneurship Assessment Instrument (CEAI)

Developed by researchers Donald F. Kuratko and Jeffrey S. Hornsby - provide for a psychometrically sound measurement of key entrepreneurial climate factors.

who observed that corporate entrepreneurship may be formal or informal activities aimed at creating new businesses in established companies through product and process innovations and market developments?

Shaker A. Zahra

3M's philosophy

The more ideas, the better the chances for a successful innovation. In other words, to master innovation, companies must have a tolerance for failure.