Corporate Entrepreneurship: Models and Strategies

Definition of Corporate Entrepreneurship

Corporate entrepreneurship is the process of creating new business ventures or promoting innovation and change within an established organization. It involves developing and implementing new ideas, products, or services within the framework of an existing company, and it requires a combination of entrepreneurial thinking and corporate resources and capabilities.

Model corporate entrepreneurship – The Opportunist

The Corporate Entrepreneurship Model – The Opportunist is one of several models used in the development of corporate entrepreneurship. This model assumes that corporate entrepreneurship occurs accidentally, mainly due to unexpected business opportunities.

• Organizational Ownership Dimension ; refers to the level of control and decision-making authority that employees have within an organization. It relates to the degree to which employees feel a sense of ownership and responsibility towards the organization and its goals.
• Dimensions of resource authority ; whether the project is funded by company money specifically or ad hoc

These 2 dimensions create 4 models of corporate entrepreneurship :

• The opportunist: the ownership is dispersed and the allocation of resources is ad hoc
• The enabler: dispersed ownership and special resources
• The advocate: focused ownership and ad hoc resources
• The The Producer: focused ownership and dedicated resources

Characteristic Features Model the Opportunist

• Has no organizational ownership and designated resource authority.
• A model that is often adopted by a company at the beginning of their journey.
• Innovation is created because of the encouragement of an individual ‘warrior’ who tries to overcome various obstacles to bring about this innovation.
• The opportunist model will work if the company has an open culture model for experimentation.
• A growing company will slowly move away from this model due to the awareness of the focus of organizational ownership and authority resources to create organic growth.

The Enabler

“The Enabler” is a model of corporate entrepreneurship that focuses on empowering employees to develop and implement new ideas. In this model, the company provides a platform and resources for employees to pursue entrepreneurial initiatives within the organization.

The company provides several criteria:

• Clear instructions on which opportunities to pursue
• Guidelines for funding
• Transparency to decision makers, recruitment and employee retention

An example of a company implementing The Enabler strategy is Google. Google gives employees 20% of their time to create new ideas.

Example of steps for pitching ideas on Google:

• Promote their ideas to colleagues
• Form a team
• Explore the idea
• Prototypes

Speaking of promoting ideas, it’s essential to have a solid understanding of business models. One of the most popular business canvas models is the Lean Canvas, which focuses on creating value and reducing waste in the product development process. Innovation is vital for companies to stay relevant and competitive in the market. Let’s delve into the topic of innovation and its importance in business.

The Advocate & The Producer

“The Advocate & The Producer” is a model of corporate entrepreneurship that focuses on two key roles within the organization: the advocate and the producer. The advocate is responsible for identifying new opportunities and advocating for them within the organization, while the producer is responsible for executing on those opportunities and bringing them to fruition.

A senior executive or manager who has a deep understanding of the industry and the market, as well as the vision and strategic thinking needed to identify new opportunities. The advocate’s role is to champion new ideas and push for resources and support within the organization to bring them to life.

The producer, on the other hand, is typically a middle manager or project manager who has the skills and experience to execute on the opportunities identified by the advocate. They are responsible for taking the vision and ideas of the advocate and turning them into actionable plans and projects.

Together, the advocate and the producer form a powerful partnership that can drive innovation and growth within the organization. The advocate brings the big picture vision and strategic thinking, while the producer brings the practical skills and experience needed to make things happen.

By embracing the advocate and producer roles, organizations can foster a culture of innovation and entrepreneurship that is essential for staying competitive in today’s fast-paced business environment.

The Advocate is a model when funding is not a critical issue.

Model The Advocate :

• The company has a special division for creating new business but the company does not have a special budget for developing new business ideas.
• This division will later provide assistance to employees to ensure that the innovations they are trying to develop will work well.
• This dedicated division will also help to develop a detailed 4-8 week business plan including contracts with senior management.
• The program team and facilitator will present to the unit’s business leaders to assess the feasibility of the idea from the eyes of the executives.

The Producer

The Producer is a role in the Advocate & Producer model of corporate entrepreneurship. This role is responsible for executing on the opportunities identified by the Advocate, bringing them to fruition, and ensuring that they are successfully integrated into the organization. The Producer is typically a middle manager or project manager with the skills and experience to implement the plans and ideas proposed by the Advocate.

They have a strong focus on operations and are responsible for coordinating the various aspects of the project or initiative, including timelines, budgets, and resources. The Producer must also have a deep understanding of the market and the industry in order to ensure that the implementation aligns with the overall strategy of the organization.

Characteristics of The Producer model (eg IBM & Motorola):

• Drive emerging ideas, encourage collaboration across units, build business potential and create pathways for executives to pursue careers outside their business units.
• Smoothly integrate new initiatives into established business units.
• Senior figures who understand the company’s internal political flow are very important to run this model because it requires very efficient and reliable communication.

Challenges from The Producer model:

• Requires a very significant and large investment over many years
• Need to integrate a successful project into an established business unit

The Corporate Entrepreneurship model is suitable for companies:

• The Opportunist: used when a new company is established and aims to explore latent innovation capabilities that exist within the company’s employees.
• The Enabler : Used to support a company’s innovative and experimental culture.
• The Advocate : Used to accelerate the growth of established divisions with a process that is not too gradual in the presence of stable leadership.
• The Producer : Used when a company wants to pursue new growth, discover breakthrough opportunities, or thwart potentially disruptive competition.

INNOVATION

The process of corporate entrepreneurship can be done through 3 things, namely:

• Renewal strategy
• Corporate venturing
• Innovation

Innovation refers to the creation and introduction of new ideas, products, processes, and services that bring significant value to individuals, organizations, and society as a whole. It involves identifying new opportunities and transforming them into practical and useful outcomes that enhance performance, productivity, and competitiveness.

The source of innovation is creative ideas. The keywords for innovation are new & useful, and have creative ideas from the beholder’s point of view. Innovation is a new product or service that is also useful for the daily life of the users. The difference between innovation and intervention lies in the word commercialism.

The Conceptual Business Model

When a company is defining their business model, they can use 2 tools, namely the Business Canvas Model or the Ten Types Business Model Innovation approach.

A business model that is still in the conceptual stage should have 3 parts:

• Create Value
• Deliver Value
• Capture Value

There are several stages to validating a company’s conceptual business model:

• Ensure assumptions match reality
• Listen to the voice of the customer
• Perform analysis based on big data
• The assumptions used must match each other

Basic Business Canvas Models

Business canvas models are visual frameworks that help entrepreneurs and businesses describe, design, and plan their business models. Here are some of the basic business canvas models:

• Lean Canvas: This is a popular business canvas model that is used to create a one-page business plan. It includes nine building blocks, such as problem, solution, key metrics, unique value proposition, channels, customer segments, revenue streams, cost structure, and key partnerships.
• Business Model Canvas: This is another popular business canvas model that helps entrepreneurs to design and describe their business models in a clear and concise way.
• Value Proposition Canvas: This canvas model helps businesses to design and refine their value propositions. It includes two building blocks: customer profiles and value maps.
• Strategyzer Canvas: This canvas model is designed to help businesses to create, develop, and test new business models. It includes four building blocks: product/service, customer, value proposition, and channels.
• Customer Empathy Canvas: This canvas model is designed to help businesses to understand their customers’ needs, behaviors, and motivations. It includes three building blocks: customer, situation/context, and insights.

These are just a few examples of the many business canvas models available. The right canvas model will depend on the specific needs and goals of the business.