Are you seeking a detailed account of corporate entrepreneurship? If yes, then you have landed at the right place. Let DKG clear the air around this topic and beef up your knowledge.
Every business, whether big or small, requires constant innovation and growth. Everyone is racing to be more innovative and agile, as they should be. It’s a competitive world, and we need to strive for excellence. But the question is how. Amongst many approaches, one is corporate entrepreneurship, also known as intrapreneurship. In short, it blurs the line between huge businesses and startups.
Let’s dive into the topic and discuss things in detail.
What is Corporate Entrepreneurship?
‘Corporate entrepreneurship is the process of creating new businesses within established organizations that can disrupt existing markets and create new industries’. – Robert D. Hisrich and Michele P. Peters, (2022)
As stated, corporate entrepreneurship is an approach to creating new initiatives or ideas in an existing organization. It may include working on new business models or building new products or services, as and what the organization requires. Further, there are two ways in which corporate entrepreneurship works.
Firstly, where a big organization builds a startup internally and liberates it, it ropes it back in and merges with itself after some time. Second, the large organization finds an initial-stage startup and collaborates with or directly acquires it with itself.
Different Models of Corporate Entrepreneurship
MIT researchers talk about four different types of corporate entrepreneurship.
The Opportunist Model:
This model does not focus on creating a predefined strategic plan. It simply follows a flexible approach. Further, the key features of this model include risk-taking, quick decision-making, resource allocation, and adaptation.
Note: The opportunist model best suits corporate cultures willing to experiment and have good social networks.
The Enabler Model:
The Enabler model is well-suited for organizations where experimentation is welcome. This model helps to enhance the overall company’s culture. It combines the existing staff with newly hired employees. The increased staff will result in faster changes.
Note: It may result in extra expenditure due to investing in employees’ ideas, who later become unwilling to work on them.
The Advocate Model:
The organization finding ways to boost the growth of their established departments can opt for the advocate model. However, there are a limited number of resources here, so managers need to build ideas based on their existing lines of business. Here, advocates help companies to teach what they can achieve and what they can pursue.
Note: The advocate model aims to reinvigorate business units and support corporate entrepreneurship teams.
The Producer Model:
The company creates entrepreneurial initiatives from within instead of relying on outside sources. It includes in-house ventures, risk-taking, and integration with the company’s existing operations. Further, the company invests in its employees’ ideas and helps them grow.
Note: The company focuses on generating ideas solely by themselves instead of taking any outside help.
What are the Pros and Cons of Corporate Entrepreneurship?
There are ample benefits associated with corporate entrepreneurship. Here are some key points.
- Availability of resources: As you know, start-ups usually have limited budgets; hence, having resources at the door is a plus. In the entrepreneurship ecosystem, you get access to a good amount of resources. It is a catch for entrepreneurs.
- Recognition of brand: Gaining brand recognition is one of the most challenging tasks in any industry. But corporate entrepreneurs get it ready at their disposal. However, you must continue working hard towards betterment to maintain the name.
- Developing new products: It is an excellent medium to build products or services through new ideas. This straightaway leads to more growth and innovation in a company. Further, new ideas or technology help you stay ahead of the competition.
- Good for sales: Sales are crucial in any business. Corporate entrepreneurs get it easy. The organization already has a sales cycle up and running. Moreover, the number of contacts and target companies is also worked upon. Hence, corporate entrepreneurs can benefit and get a head start in sales.
- Getting basic set-up: Nowadays, websites or apps are basic organizational needs. In the corporate entrepreneurship ecosystem, you get well-established websites or applications of the organization beforehand. Therefore, you don’t have to start from scratch and build up. You just have to continue the work.
- Corporate entrepreneurship may result in experiencing long approval cycles. It becomes crucial to get approval from the top management before making any decision. Hence, it is time and energy-consuming.
- Creating separate firms is a part of corporate entrepreneurship. However, power struggles may prevail after merging it with the main organization. There are chances of clashes between the teams.
- It may reduce the financial rewards for the entrepreneurs.
How Can You Foster Corporate Entrepreneurship?
Know your company’s risk
It is essential to analyze your company’s overall structure and functioning intricately. Check out some critical questions below that you must ask yourself before finalizing corporate entrepreneurship, such as what is the limit of your company to handle risks, does your industry actively follow corporate entrepreneurship or does it rarely, and in which fields/departments can you incorporate corporate entrepreneurship.
Understanding these circumstances will give you a clear idea of whether you should go for corporate entrepreneurship!
Establish clear goals and objectives
Jot down your vision and strategic goals that you wish to achieve. Understand what you want to accomplish. You can take appropriate help from business experts or managers to create a vision. After that, address the plan to your team and make sure they align well with your ideas. Also, choose which departments require new recruits to speed up the process.
Create an environment focusing on creativity, growth, and learning
Any kind of successful entrepreneurship depends on the type of environment there is. It’s crucial to foster an environment that supports taking risks, building relationships, providing supportive structure, setting realistic goals, providing a good supply of resources, and encouraging gaining new skills and knowledge.
Such an ecosystem drives innovation and accelerates overall business growth.
Implement corporate entrepreneurship
With the right set of people, the ideas will align more or less. The core purpose of the entire team here is to implement and manage corporate entrepreneurship. In addition, it is also recommended to check the four models of corporate entrepreneurship and see which aligns with you the best.
A dedicated team will focus on bringing the most innovative solutions for growth as needed.
Hire creative-minded entrepreneurs
Not every member of your team needs to have the potential to be an entrepreneur. Make sure you hire some passionate and determined individuals. It will boost your development and growth of the project. Furthermore, you can also rope in professional mentors and coaches. They can teach effective ways to increase productivity and grow well in this process.
Why is it Important?
By now, you must be aware of the concept of corporate entrepreneurship. It is a work culture that boosts innovation, creativity, and entrepreneurship. Further, many companies follow multiple ways to foster it that aim to encourage employees to take the lead, invest in new and innovative opportunities to get maximum benefits, and even offer bonuses or incentives of some kind.
The following essential points showcase the significant points of importance of corporate entrepreneurship:
Results in the company’s growth/ innovation
Implementing corporate entrepreneurship results in transformative innovation. The successful execution drives the business to build new ideas and develop new products and services. Further, the team continuously fetches new market opportunities, which in turn boosts revenue and, eventually, growth.
Boosts morale and productivity of employees
Corporate entrepreneurship encourages employees to take the lead in projects. Hence, it boosts their morale. With high morale comes confidence and grit to find new opportunities. This will empower the company to innovate further and excel in projects.
So, it’s a win-win situation for both employees and the organization.
There are many management levels in the typical entrepreneurial environment. It creates frustration and delays decision-making due to multiple layers of management. However, in corporate entrepreneurship, the structure is relatively flat. It doesn’t include a rigid process. Instead, it is easy and flexible. The decision lies mainly with the members.
In a nutshell, corporate entrepreneurship imbibes companies of various sizes, be it small, medium, or large. The factors that are enough to implement this concept are creativity, dedication, and resilience. It simply empowers organizations to understand the complexities of the business environment and take calculated risks.
It helps businesses familiarise themselves with the startup environment and find new growth opportunities. Even you can leverage it to secure your position as a leader in competitive industries.
Overall, it’s a dynamic concept in the modern business world. Adopting it can be a strategic imperative towards success today.
I hope the article helped you understand the concept of corporate entrepreneurship well.
Keep learning, and keep growing!
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