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:
Start sending out CYA memos (seriously—you’ll need them
Revise your résumé, because you’re probably going to
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.
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
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).