Strategic Renewal refers to the corporate entrepreneurial efforts that result in significant changes to an organization's business or corporate level strategy or structure. These changes alter pre- existing relationships within the organization or between the organization and its external environment and in most cases will involve some sort of innovation. Renewal activities reside within an existing organization and are not treated as new businesses by the organization.
The key steps in developing entrepreneurship inside a corporation
1. Develop a vision and strategy
2. Create a culture of innovation
3. Develop organizational support
4. Reward according to results
5. Communicate
1. Develop a vision and strategy
Mission
A mission statement is an enduring statement of purpose for an organization that identifies the scope of its operations in product and market terms, and reflects its values and priorities. Essentially, the mission statement defines the company and provides an answer to the question: ”What kind of company
do we want to be?” Not all executives like to conceive their company’s future through strategic-planning exercises. Jack Welch had his business units envision how the future could hurt them -”Destroy Your Business”
Welcoming new ideas
Leaders of highly innovative companies demonstrate in every decision, action, and communication that innovation propels profitability. The emphasis is on developing whole new business concepts, product platforms, and systematically ‘destroying one’s own’. Continual innovation is their soul business. Be a failure-tolerant leader: ”The fastest way to succeed, ”IBM’s Thomas Watson once said, ”is to double your failure”.
2. Creating a culture of innovation
Allowing divergent thinking
Convergent thinking focuses on clear problems and provides well-known solutions quickly. Order, simplicity, routine, clear responsibilities and predictability are the bedrock of convergent thinking.
Divergent thinking focuses on broadening (or diverging) the context of decision making. Divergent thinking essentially requires three central skills – conversation, observation, and reflection – to identify
new business ideas rate.”
Supervisory encouragement
Top management plays a central role in developing the vision and sharing it with the rest of the organization. Leaders of successful, continually innovative companies create a sense of community across the organization. Find, empower, and champion ‘middle manager entrepreneurs’ - frontline supervisors who assume the career risk of pursuing a new idea within the corporation, and who serve needed resources, run interference for the idea so it can germinate, and endure the ‘flack’ of institutional inertia and resistance.
Tolerating failures
Employees must be given permission to occasionally fail and learn from failure. Dead ends can sometimes be very enlightening - knowing what doesn’t work can be as useful as knowing what does. Creating a culture in which people feel comfortable with failure also requires abandoning traditional ideas about personal competition. 3M has encouraged idea sharing for decades, from the coffee-and-donut sessions years ago to today’s more formal tech forums and in-house trade shows.
3. Developing organizational support
Balancing partitioning and integration
Separation is no doubt the model of choice when the new and the old differ greatly. The simple injunction to cordon off new business is too narrow. Although ventures do need space to develop, strict separation prevents them from obtaining invaluable resources and robs their parents of the vitality they can generate. A delicate blend of separation and co-operation is a prerequisite for achieving both focused performance and faster growth.
Developing organizational support
New Venture Divisions (NVDs). NVDs are separate organizational units under the corporate
umbrella, tasked with incubating mainly discontinuous opportunities from idea conceptualization through commercialization and final value capture. The NVD model combines traditional corporate business development and venture capital principles. NVDs provide business ventures with a customized level of corporate sponsorship and support, along with the flexibility and autonomy of an entrepreneurial environment.
4. Reward according to result
The importance of rewarding
• All efforts are not of equal value…
• Intrapreneurs are achievers; and achievers are not equal to other people, not even
to each other
What sort of reward?
• Financial rewards: bonus, incentive stock options…
• Avoid using money to “bribe” individuals who come up with new ideas…
• Non-financial rewards: holiday, promotion, awards and other types of personal
Recognition
Promote open communication
• Role-based incentives (inventor, organizer, etc.)
• Incentives for team work
• Based on event milestones
• Simple and realistic
5. Communicate
Communication type and content
• Focus on face-to-face communication
• Other types of communication can be used: meetings, events, emails, Intranet…
• Tell powerful stories
Who should be targeted ?
• Frontline managers – their support is crucial
• Key elements in informal networks throughout the company
Promote open communication
• Develop alternative communication channels
• Provide employees who do not meet normally to interact: communal areas,
informal gathering…
Benefits of Corporate Entrepreneurship
CE can make a significant difference to a company’s ability to compete. It can be used to improve competitive positioning and transform corporations, their markets, and industries when opportunities for value-creating innovations are developed and exploited. A key benefit of CE may be to push companies to employ a range of strategies, often in unique combinations. By doing so, companies build layers of advantage by combining distinctive bases for competitive superiority. CE can improve a company’s growth. The CE improves performance by increasing the company’s proactiveness and willingness to take risks by pioneering the development of new products, processes, and services.
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