To paraphrase Charles Darwin, it is not the strongest of the species that survives, nor the most intelligent, but the one that is most adaptable to change. Never has this been more true, than in today’s highly competitive and rapidly changing business world.
Large, established companies are being forced to find new ways to adapt to increasing pressure from smaller, faster and more agile companies. These new players are identifying and exploiting opportunities by disrupting markets, taking market share and threatening the very existence of established businesses.
Though not a new concept, corporate entrepreneurship is gaining momentum and is widely being recognized as the answer to these organisational woes. Behaving like a startup and harnessing the power of innovation, whilst retaining the benefits of being a large company, is allowing businesses to retain their competitive advantage and continue to flourish.
But what is behind this concept, and what do you need to know about it? Let’s start with a corporate entrepreneurship definition, and then cover four points that will bring you right up to speed.
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A definition of corporate entrepreneurship
Corporate entrepreneurship, or intrapreneurship as it is often referred to, is the concept of supporting employees to think and behave like entrepreneurs within the confines of an existing organisational structure. Employees with the right vision and skills are encouraged to identify opportunities and develop ideas which lead to innovative new products, services or even new lines of business.
Corporate entrepreneurship programs should produce ideas which are disruptive in nature, rather than smaller, incremental changes. Also, innovations tend to be led by employees, rather than being implemented by management.
Why do you need corporate entrepreneurship?
Innovation is the lifeblood of a company; without it, the company will die. But many larger organisations struggle to innovate successfully due to their structures, bureaucracy and culture. Implementing a corporate entrepreneurship program provides companies with a systematic way of increasing their innovation capabilities, the benefits of which can be huge:
- Growth: Successful corporate entrepreneurship ensures a consistent stream of new innovations in the product and service pipeline, which in turn leads to future revenues and growth for the organisation.
- Increased productivity and employee morale: Corporate entrepreneurship programs allow employees to tackle new opportunities, immersing them in work which they find to be both challenging and interesting. When employees are engaged and feel that their contributions are valued by the company, productivity goes up.
- Source of competitive advantage: Employees are an organisation’s greatest asset when it comes to identifying opportunities and threats in the market. They can provide insights not available to competitors, and are a valuable source of ongoing competitive advantage.
- Employee recruitment and retention: Allowing employees to pursue their ideas and opportunities for the business leads to higher levels of job satisfaction. A result of this is lower levels of staff turnover. In addition, companies that are known for encouraging corporate entrepreneurship will in turn attract other talented, entrepreneurially minded employees, creating a positive cycle.
You don’t create corporate entrepreneurs — you must find them
It is important to recognize that as a company, you don’t create corporate entrepreneurs, as they are already present within the organisation. What you must do is identify them, then support and encourage them.
Spotting them is a matter of looking for the right characteristics. Although successful corporate entrepreneurs come in many shapes and sizes, they tend to share the following common characteristics:
- Courageous: They are not afraid to challenge the status quo and are prepared to take risks to pursue an idea that they believe in.
- Curious and open minded: They are open to new ideas and not blinkered by existing successful products in the company. Their curiosity leads them to always search for new opportunities.
- Not driven by financial motives: They are rarely driven by personal financial gain, but rather by pursuing something that they are passionate about. They want to make the company better and improve the lives of its customers.
- Resilient: They must be able to handle the rejection or failure of ideas to be able to keep moving forward and producing new ideas.
It requires a different management approach
Implementing a corporate entrepreneurship program and producing successful innovations may require a change in the structure of the business, and it will most certainly require a change in management approach.
Corporate entrepreneurs are wired differently to the average employee and need to be encouraged and supported in a different way. In order to create an environment that brings out the best in your employees, consider the following points:
- Support: It is important to foster a culture that makes employees feel supported and valued. They should feel able to freely share ideas, and further down the line should be provided with the resources and guidance they need to increase the chances of producing successful innovations.
- Take a step back: Managers need to give employees the space to come up with solutions independently, rather than sticking to traditional methods. In addition, bureaucracy needs to be relaxed to allow the emergence of ideas that make sense for the business, not just those which fit within existing structures and procedures.
- Communication: Managers should be conscious to develop a culture of open communication where ideas can flow freely within the organisation, as well as with experts external to the organisation.
Your organisation might actually be killing innovation
Despite knowing that your company needs to be more intrapreneurial, you may unknowingly be stifling innovation within your organisation. Avoid falling into that trap by being aware of these pitfalls:
- Employees fear failure: To successfully foster open innovation, employees must not fear negative consequences of failed ideas. Management must develop a culture where risk is tolerated and failure is regarded as an opportunity to learn.
- Leaders do not put their money where their mouth is: While leadership teams may talk about encouraging innovation, many do not back this up with action. Resources continue to be allocated to core business projects, rather than directed towards more risky, but higher reward projects.
Speak to us today to find out more about corporate entrepreneurship and how it can help your business survive and thrive for the long-term.