Got the entrepreneurial itch?
You might want to hold off on plans to quit your day job and turn your spare bedroom into world headquarters for Your Big Idea Inc.
If your current employer’s smart and forward thinking, you’ll get the greenlight to scratch your entrepreneurial itch and unleash your inner business builder at work.
Lots of us associate entrepreneurship with start-up companies. Or we believe that innovation is driven by a lone wolf entrepreneur who, while toiling away in their garage, has a eureka moment and brings a breakthrough innovation into our world on a shoestring budget and a maxed out credit card.
And we have a hard time believing that big, established companies tightly wrapped in bureaucratic red tape can ever be hotbeds for innovation.
That’s a dangerous misperception, warn authors Robert Wolcott and Michael Lippitz, who focus on corporate entrepreneurship and innovation in their work at the Kellogg School of Management at Northwestern University.
It’s a misperception that can severely limit the vision and activities of both corporate leaders and frontline staffers who dream of building careers and companies around entrepreneurship-led growth.
“This perceptive bias against large corporations’ contributions to our economy’s new business development success is partly due to a survivorship bias in our sample set: we see only the small companies that succeed,” say Wolcott and Lippitz. “We don’t see the thousands of independent entrepreneurial ventures that fail or languish for years on life support – what some venture capitalists refer to as the ‘walking dead’.”
Unlike start-ups, big and established enterprises have greater bench strength with experienced management teams who know the rules of the game. Established companies also have deeper pockets, with the capital to carry a new venture though its early stages. And big companies already have market access and credibility, which makes recruiting partners and early customers a whole lot easier.
Wolcott and Lippitz define corporate entrepreneurship as “the process by which teams within an established firm conceive, foster, launch and manage a new business that is distinct from but leverages the company’s current assets, markets and capabilities.”
Now, building new businesses inside existing businesses can be easier said than done for a host of reasons. In big companies, there’s a built-in bias against new things and a locked-in focus on efficiency and risk avoidance. There can be an internal bias and a real reluctance to seek out external knowledge or tap into networks beyond the company’s walls. And there’s something called concept myopia. “A company’s existing ways of operating pose the most powerful barrier to a comprehensive vision of what is possible and even of what might be required.”
There’s also a risk of losing strategic focus as big new ideas and bold new opportunities quickly pile up. “People charged with leading innovation initiatives can find themselves pulled in many directions. The most successful corporate entrepreneurs tend to stay focused on the right objectives without losing the big picture.”
While they need to be protected from core business pressures, insulation can quickly turn into isolation and misalignment with strategic priorities. “An isolated corporate entrepreneurship team will find it difficult, if not impossible, to move a new business out of incubation into an appropriate line of business.”
And then there’s the culture change trap. “Many dedicated corporate entrepreneurship teams end up with the responsibility, either intentionally or by accretion, for building a culture of innovation companywide,” say Wolcott and Lipptiz. “What team, no matter how dynamic, innovative and assertive, can transform a company’s culture on its own.”
Culture change has to start and be constantly driven from the top of the house. When it comes to entrepreneurship and innovation, your CEO and senior management team has to walk the talk. If they’re all hat and no cattle, all sizzle and no steak, your culture isn’t going to change. “If the top group fails to model innovative behaviours and make an ongoing, credible case for innovation, real culture change will be a losing game.”
According to Wolcott and Lippitz, corporate entrepreneurship and innovation is essentially a new business design challenge. To meet that challenge, they offer up four models for corporate entrepreneurship and something called the Innovation Radar. “The Radar provides a simple tool for helping corporate entrepreneurs put all of the questions on the table up front, rather than stumbling on them later. Much like a compass, the Radar consists of four foundational dimensions that serve as business system anchors: the customers a business serves, the offerings it creates, the processes it employs and the points of presence it uses to take its offerings to market.”
According to the authors, our best shot at building a better world is through a fundamentally sound, vibrant entrepreneurial sector and big companies have a big role to play. “Entrepreneurship enables people to envision and create the future, something that is perhaps the fundamental path to a prosperous world. It is everyone’s responsibility – business, government, academia, and nonprofits – to create the context in which people can discover and manifest innovative solutions for human needs and desires.”
The good news is you don’t have to quit your day job, stock up on IKEA home office furniture and remortgage your house to imagine and implement those innovative solutions. Your employer may be ready, willing and able to unlock and unleash your entrepreneurial spirit.