These days, innovation is a bigger buzzword than ever, inside corporations as well as in start-ups. But within a corporate context, it can be especially challenging for innovators to get effective support for designing a successful new business.  Our studies on innovation at more than 30 major companies show that the best way to approach this issue is by looking at (1) Who, if anyone, within the company has primary responsibility for creating new businesses?  And (2) Is there money dedicated to corporate entrepreneurship or are new business concepts funded in an ad hoc manner, through “slush funds”?   

All companies begin with what we call the “Opportunist” model—the first of four models for corporate entrepreneurship that we will discuss. Without any designated organizational ownership or resources, corporate entrepreneurship proceeds opportunistically, if at all, based on the efforts of intrepid “project champions.” This is how the typical start-up company turns a visionary’s dream into reality.  Yet in large, established companies, the unfortunate truth is that such champions typically toil against the odds, rarely capturing sufficient management attention. 

In general, the Opportunist model of corporate entrepreneurship works well only in trusting corporate cultures that are open to experimentation and that have diverse social networks behind the official hierarchy. In other words, there need to be multiple executives who can say “yes” to a new business concept. Without that type of environment, good ideas can easily fall through organizational cracks or receive insufficient funding to prove feasible. In addition, emerging concepts must be allowed to evolve on their own terms, rather than being subject to ordinary new product development processes or reviews.

So if you are an innovator trying to work within the Opportunist model, how should you proceed?  The moment you begin working seriously on your first corporate entrepreneurship opportunity, make sure you find a senior-level sponsor. Your sponsor is someone to whom you can go when you need help, someone who will provide access to company leaders and advocacy on your behalf at senior staff meetings, as well as standing up for the project when it comes time to allocate resources. If you have failed to find a committed senior sponsor after a few months of leading a new business creation project, do two things:

                              1.            Start sending out CYA memos (seriously—you’ll need them later).

                              2.            Revise your résumé, because you’re probably going to need it.

From the point of view of top management, a corporate environment that nurtures unstructured innovation can be hard to sustain; consequently, the Opportunist approach is not dependable for many companies in the long term. In some companies, an ad hoc innovation culture flows down from the very top and dissipates when a new CEO comes in. For other companies, success in corporate entrepreneurship leads them to grow to a size where informal innovation management does not continue to work as well as it did when the company was smaller. Likewise, in some industries, the nature of competition may change from a locally dominated cluster to a globalized network in which an informal culture of innovation does not work reliably.

When organizations get serious about organic growth, executives realize that they need more than a diffuse, ad hoc approach.  In our next posting, we’ll describe the Enabler Model of corporate entrepreneurship, which is often the next step for companies that want a more disciplined approach to new business creation while maintaining the creative involvement of whole company–and is often a more positive environment for would-be corporate entrepreneurs. 

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Read more from Robert Wolcott and Michael Lippitz on how corporate entrepreneurs can take their vision to market and help their companies Grow From Within.

Robert Wolcott and Michael Lippitz are leading authorities on innovation and corporate entrepreneurship at the Kellogg School of Management at Northwestern University, and co-authors of Grow From Within: Mastering Corporate Entrepreneurship and Innovation (McGraw Hill, 2009). In the past six years, they have studied more than 30 companies across industry sectors and developed an ongoing dialogue with them about corporate entrepreneurship through the Kellogg Innovation Network (KIN).