Management & Leadership

Obstacles to Corporate Entrepreneurship

Obstacles to Corporate Entrepreneurship
Is it possible to find entrepreneurial opportunities within the corporate framework? Is intrapreneurship a thing? Image from Pexels
Courtney Eiland profile
Courtney Eiland March 1, 2022

Developing new products and new ventures within corporate culture is what corporate entrepreneurship is all about. That same culture creates opportunities but also obstacles.

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2021 saw a surprising shift in the US labor market. This change, sometimes called the "Great Resignation"or the "Great Reshuffle," presented employees a broader range of work opportunities than at any time in memory. With labor in demand, employers needed to sweeten their offers to attract top candidates.

Job seekers enjoyed perks ranging from working from home to increased flex time to unlimited paid time off. Some wanted more than convenience and increased pay (although people rarely say no to either). They wanted opportunities to innovate, to create new products and services, and to take risks. They wanted an entrepreneurial experience.

Some started businesses on their own. According to the U.S. Census Bureau, Americans filed 5.4 million new business applications last year, surpassing the previous record of 4.4 million set in 2020. But green field entrepreneurship isn't for everyone: it requires capital, management skills, and nerves of steel (after all, 90 percent of startup businesses fail). Perhaps you don't want to worry about the hassle of startup paperwork, creating your business model from scratch, sleepless nights, running out of funds to keep your business afloat, or hiring and managing the right team members to help execute your vision.

Which raises the question: is it possible to find entrepreneurial opportunities within the corporate framework? Is intrapreneurship a thing? This article examines that question while also addressing:

  • What is corporate entrepreneurship?
  • How do corporate entrepreneurs function within a corporate structure?
  • What unique obstacles do corporate entrepreneurs face?
  • What unique opportunities do corporate entrepreneurs enjoy?
  • How to become a corporate entrepreneur

What is corporate entrepreneurship?

Corporate entrepreneurship adapts the innovation and risk-taking elements of startups to corporate practice. Corporate entrepreneurs attempt to launch new disruptive businesses within established companies.

Gifford Pinchot III, author of Intrapreneuring: Why You Don't Have to Leave the Corporation to Become an Entrepreneur, coined the term "intrapreneur" in 1985. A a Babson College article summarizes Pinchot's thinking when it discusses the four types of corporate entrepreneurs:

  • Corporate venturing: creating a business within a business, such as a new product or market opportunity leveraging a core competency.
  • Intrapreneuring: taking the external entrepreneurial mindset and teaching these characteristics to managers, team leads, and other employees to create a culture of innovative thinkers.
  • Organizational transformation: creating new processes or procedures by rearranging resources or cutting costs.
  • Industry rule-bending: changing the rules of competitive engagement, forcing competitors to adjust their business models.

Green field entrepreneurship on its own can be daunting. Corporate entrepreneurs prefer organizational structure within an established company where their business ideas for corporate innovation are welcome.

How do corporate entrepreneurs function within a corporate structure?

Many large companies are starting to realize that corporate innovation is key to achieving longevity in the marketplace. As a result, these companies work to identify employees with drive and innovative ideas. These entrepreneurial behaviors help a company's built-in innovators move up the corporate ladder and land senior management positions to drive the business forward.

However, this concept is not a one-size-fits-all approach. According to the MIT Sloan Management Review, there are four models of corporate entrepreneurship within an organization:

  • The opportunist model eschews organizational ownership or resources, instead encouraging individuals and small teams to organize themselves to champion new business ideas.
  • The enabler model encourages innovative thinking and provides financial backing and support from senior management on selected projects.
  • The advocate model strongly encourages innovative thinking, but with funding derived from individual business units rather than from top management.
  • The producer model is similar to the enabler and advocate model but also emphasizes cross-unit collaboration and the potential for executives to explore career opportunities in different business units.

What unique obstacles do corporate entrepreneurs face?

Although it may seem that having a stake in an established business would be a dream come true, there is still the task of finding the right balance between conducting business as usual and embracing risk. New ventures aren't always going to be successful, and some corporate entrepreneurs may have to face the reality of hearing the unwanted phrase, "Well, this is what we've always done." On the other hand, you may find yourself at a company that encourages a culture of innovation. Either way, finding the right balance that fits the organizational structure is critical for business success.

The two-cultures problem

The Harvard Business Review describes this balancing act as the two-cultures problem. Established businesses, for the most part, already have the formula down. They take very calculated risks and have organizational systems to ensure success. New companies present more of a challenge as they seek to strike the right balance. The three challenges identified are:

New or emerging businesses typically have unreliable financial forecasts due to the lack of insights from similar companies in the marketplace. New businesses require fresh ideas and innovative thinking versus conventional thinking. New businesses struggle to find the right fit between new and old systems.

One of the main challenges of corporate entrepreneurship is getting buy-in from an establishment to accept new, riskier ways of doing business. The conflict between "playing it safe" and taking risks will remain challenging. However, suppose you can bridge this thinking pattern or work for an organization that encourages innovative ideas and is not afraid to take risks to an extent. In that case, some opportunities can contribute to a rewarding career.

What unique opportunities do corporate entrepreneurs enjoy?

Simply put, not everyone can be the boss. Quite frankly, not everyone wants to be the boss. Corporate entrepreneurs may view this as an opportunity to be a stakeholder within a large company that values their entrepreneurial mindset, business management, and decision-making skills. Procter & Gamble, for instance, experienced tremendous growth by implementing a culture for innovation, dubbing this process the "new-growth factory." P&G strengthened its core business through four types of innovation: sustaining, commercial, transformational-sustaining, and disruptive.

Many corporate entrepreneurs find validation and purpose when actively involved in the idea process and corporate strategy. This way of operating can lead to business growth, employee morale, competitive advantage, and higher levels of job satisfaction.

How to become a corporate entrepreneur

As more large companies are finding ways to promote a culture that embraces entrepreneurial behaviors, they rely on their employees to take the initiative in the process. This type of mindset is why pursuing professional development—through an entrepreneurship MBA or standalone courses—can yield considerable benefits.

Just do it!

Corporate entrepreneurship does not require a license, a certification, or any particular degree. Anyone with the skills to guide a startup and the ability to impress their employers' decision makers can become corporate entrepreneurs.

However, this path clearly poses challenges. Credentials and experience matter in the corporate world, and if you have neither, your chances of success are at the very least diminished. You can improve your odds by obtaining an MBA degree or taking corporate entrepreneurship courses. These credentials can provide the skills, tools, and knowledge you'll need to develop your next big idea and turn it into reality.

Get an MBA with a concentration in entrepreneurship

A general MBA provides a solid foundation of business fundamentals, all essential to starting and maintaining a successful business. Some schools offer the degree with a specialization in corporate innovation and entrepreneurship. These high-ranking programs include:

It's worth noting that these concentrations focus largely if not exclusively on green field (i.e., startup) entrepreneurship. There is currently no MBA program dedicated exclusively to corporate entrepreneurship. To narrow your focus, you may prefer to take a number of freestanding courses in the subject (see below).

Take courses in entrepreneurship

If you hope to make your entrepreneurial mark within a corporate setting, consider one or more individual courses covering the subject. Examples of the corporate entrepreneurship courses you can choose from include:

  • Business Modeling
  • Business Strategy
  • Entrepreneurship and New Ventures
  • Innovation Management
  • Lean Entrepreneurship
  • Negotiation Skills
  • Plan, Pitch, and Fund an Entrepreneurial Start-up
  • Product Development
  • Venture Capital

Columbia University offers an online course entitled Corporate Entrepreneurship taught by internationally renowned expert Rita McGrath.

Corporate entrepreneurship enables you to awaken your entrepreneurial mindset within an established organization open to innovative thinking rather than conventional thinking. As many job seekers or employees continue their soul searching during these unprecedented times, they may realize that the role of an intrapreneur instead of an entrepreneur is a better fit. Yes, obstacles will arise along the way no matter the journey, but it can turn into a rewarding experience in the long run. If you're lucky, that pitch that's been keeping you up at night could very well end up becoming the next big business idea.

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