Successfully developing new businesses within a large, established organization depends on two cardinal decisions: (1) who, if anyone, within the company has primary ownership for creating new businesses? And (2) Is money dedicated to corporate entrepreneurship or are new business concepts funded in an ad hoc manner? In our last posting we described the Enabler Model, in which there is no designated innovation organization but money is dedicated to the early stages of new business conception. Individuals and teams with new business concepts are explicitly supported, encouraged, and often strategically channeled, with a promise of serious management attention to those concepts that look promising.
The Advocate Model represents another way in which companies can evolve beyond supporting corporate entrepreneurship only opportunistically. In the Advocate Model, a company assigns organizational ownership for driving the creation of new businesses to a designated corporate-level group, but it intentionally provides the group with only a modest budget. Advocate organizations act as evangelists and innovation experts, facilitating corporate entrepreneurship in conjunction with business units, which must demonstrate their commitment to new business development by paying most of the bills.
The Advocate Model is a relatively new and in some ways counterintuitive form of corporate entrepreneurship. A primary purpose of contemporary corporate entrepreneurship efforts is to overcome the resistance of business units to adopting immature new business concepts. So how can an organization that has no direct power over business units accomplish very much? In some corporate contexts, it cannot. But, surprisingly, in many corporate contexts, it can.
So what’s your best approach if you’re a budding corporate entrepreneur working within the Advocate model? First, you need to build and maintain connections. Successful advocates depend on knowledge and trust among both internal networks and the external ecosystem. Second, you must also maintain awareness and support among corporate leadership. Of course, testimonials from business unit leadership about bottom-line results are most persuasive. But top leaders also want to be reassured that the company is being exposed to leading-edge thinking and technologies. You want to be known as the person who can sort “the wheat from the chaff” in emerging technologies, where visions are often quite different from substance.
A fundamental challenge for Advocate organizations is to maintain a balance between explorations of longer-term, game-changing concepts and producing tangible near-term results. It takes time to fill the pipeline, and individual projects may have a long gestation period. Another challenge is to remain current, not only in understanding the external ecosystem but also in employing leading-edge methods and practices in corporate entrepreneurship. Good Advocate teams are introspective and regularly seek outside process concepts and advice.
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).