Corporate entrepreneurship may sound like a contradiction in terms to some, but those familiar with the concept understand how its congruences outweigh its conflicting implications. That’s because they see how it has spawned the development of countless new products and services under established business umbrellas.
That’s not all corporate entrepreneurs contribute to established business concerts. In addition to allowing for innovative ideas to expand beyond startups, corporate entrepreneurs with successful ideas also help capture profit and growth.
Whether you’re new to the term or looking for ways to build corporate entrepreneurship opportunities within your team, this guide provides information on best practices, challenges, and opportunities to explore entrepreneurial processes for established organizations. It explores:
Corporate entrepreneurship—a relatively recent concept, first mentioned in academic literature in 1971—attempts to harness forces commonly associated with entrepreneurship (e.g., innovation, creativity, and opportunity recognition) to operate within traditional business models. Because it brings an activity that typically occurs outside the corporate environment within its confines, the practice is sometimes referred to as intrapreneurship.
Corporate entrepreneurship allows the core business to profit from fresh ideas and strategies while the team implementing the new business idea benefits from established corporate venture capital, market position, and other resources frequently unavailable to startups. Corporate entrepreneurship also works to retain highly skilled employees who may otherwise strike out on their own if not given the chance to flex their entrepreneurial competencies.
Entrepreneurship plays an important role in individual lives and businesses alike, creating new services and products benefiting both consumers and providers. Some of the greatest inventions and innovations across the last few centuries resulted from entrepreneurial thinking.
Whether considering contributions of tech icons such as Bill Gates and Steve Jobs, transportation innovations from the likes of Cornelius Vanderbilt and Henry Ford, or the handy services of local plumbers and painters, entrepreneurship performs a critical role at nearly every level of society.
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Examples of corporate entrepreneur initiatives abound, with many proving clearly the value this type of risk-taking can produce. If you have ever enjoyed a McDonald’s Happy Meal, thank St. Louis regional manager Dick Brams for pitching the idea of a meal specifically made for children–and corporate leaders open to intrapreneurial innovation.
Similarly, the world would never know the joy of opening a new pack of Post-it notes or page markers had two 3M workers not partnered to create a new product that would allow their officemates to share messages without damaging surfaces. Today, Post-it notes and assorted projects generate more than $1 billion dollars in annual revenue.
Internal corporate venturing can seem daunting–counterintuitive even–when you think of it as developing a startup within an established business environment. The most successful intrapreneurship initiatives come from companies creating an environment where new ideas can flourish. As these and many other examples of corporate entrepreneurship demonstrate, innovation paired with calculated risk often pays off.
Many established businesses know they need to continue innovating to attract new customers and maintain a competitive advantage, but not all have mastered the process. Talking about innovation versus implementing it effectively are two separate things, and it can take some time to line up all the moving parts needed to innovate successfully.
Corporate entrepreneurship at its best harnesses all the important principles of strategic entrepreneurship and new opportunities development but with the backing of senior managers and the funding of large organizations. Those in the existing organization must be able to identify and reward entrepreneurial spirit, while those doing the innovating must recognize and appreciate the benefits that come with innovating inside an established setting.
First identified in the Harvard Business Review, the two-cultures problem refers to the lack of synergy between established organizations and new ventures growing from within. For instance, large companies typically focus on making informed decisions based on extensive data. New businesses, conversely, may not have access to such data and need to take a different approach.
Similarly, established companies praise conventional thinking that produces tried and true results. New ventures, conversely, thrive on working outside the box and testing innovative ideas to find the one that can produce groundbreaking products and services. Finding ways to build common ground goes far in narrowing the gap between competing cultures under one roof.
Harnessing corporate entrepreneurship doesn’t happen overnight, but there are steps middle managers and senior staff alike can take to create an environment in which intrapreneurship flourishes. Take Procter & Gamble, a leader in the new growth opportunities game.
Founded in 1837, this consumer goods corporation found itself with a stale portfolio of fabric and household care products as the 21st century dawned. Sure, established offerings like Gillette, Head & Shoulders, Pantene, and Vicks reliably brought in impressive annual revenues, but products like Gain and Tide weren’t growing fast enough.
Enter the “new-growth factory,” an idea dreamed up by top management as a strategic renewal plan for both strengthening existing business and systemizing growth opportunities. Rather than culture clashing and infighting over what was ultimately a shared goal of expansion, P&G leaders found beneficial ways to bring new and old together. This intrapreneurial business venturing approach doubled revenues within a decade, moving Tide sales from $12 billion to $24 billion in annual income.
The P&G example offers several critical insights into how to drive corporate entrepreneurship success. They include:
Despite proven success, corporate entrepreneurship has yet to fully catch on within academic teaching circles. Because of this, individuals interested in learning more about what it entails and how to apply it successfully may need to think outside the box.
Many MBA programs now offer entrepreneurship concentrations alongside generalist courses in topics such as operations, marketing, finance, and analytics. Undertaking a concentration focused on entrepreneurial topics can help you learn how to develop and expand sustainable ventures, compete in new markets, and capture venture finance successfully. What an MBA in entrepreneurship and innovation won’t teach, however, is how entrepreneurs can successfully cross pollinate with large companies.
Few if any MBA programs currently offer corporate entrepreneurship specializations. You may find one course on the subject, but otherwise you will need to glean knowledge that can be transferred to the topic in classes such as strategic leadership and operations management.
Online entrepreneurship courses offer the opportunity to build specialist knowledge while juggling other responsibilities. They also open access to more universities, allowing you to live in California and enroll at a school in New York. Whether undertaking an entire specialization or a one-off course on the topic, online programs offer access to an expanded offering of focused coursework.
Even if a university does not offer a focused degree or specialization on corporate entrepreneurship yet, you can likely find an online class devoted to the topic. Columbia University, for one, offers an online class in corporate entrepreneurship taught by internationally renowned thought leader Rita McGrath.