Corporate Entrepreneurship ss 5-8

1
Corporate Entrepreneurshipss 5-8

• Mikkel Draebye

2
Agenda Session 5-8

• Where are we, What are we doing
• Flashback Whats so interesting about Rob?
• Recall Definitions of entrepreneurship
• Entrepreneurial Attitude October Sky
• Relevance of e-ship

3
Where are we?

• Course is about understanding corporate
  entrepreneurship How to foster, stimulate and
  nurture it
• The course is structured in 5 parts
• The nature of entrepreneurship from a behaviorial
  (RR) and attitudinal (October sky) point of view
  ( ch 12, session 1-6)
• The relevance of entrepreneurship (ch 12,
  session 7-8)
• The uniqueness (and non) of corporate
  entrepreneurship (ch. 12, session 9-10)
• The definition, measurement and manifestations
  of corporate entrepreneurship (ch. 23, session
  11-12)
• How foster corporate entrepreneurship (ch 4-15,
  session 13-44)

4
RR Case

• So, remind me what Rob did that was
  entrepreneurial ?

5
Some definitions of entrepreneurship

• The pursuit of opportunity beyond the resources
  you currently control
• Howard Stevenson (1988)

The process of creating value by bringing
together a unique combination of resources to
exploit an opportunity Howard Stevenson
(1986)
Create and build a vision from practically
nothing Jeffrey Timmons (2000)
6
Promoter vs. Trustee Orientation
7
Promoter vs. Trustee Orientation
8
Promoter vs. Trustee Orientation
9
Promoter vs. Trustee Orientation
10
Promoter vs. Trustee Orientation
11
Promoter vs. Trustee Orientation
12
Promoter vs. Trustee Orientation
13
It makes good sense to look as entrepreneurship
as an attitude or orientation. As such it must be
observed as it is interpreted by the entrepreneur.
The Entrepreneurial Mindset A collective
investigation into the nature of entrepreneurship
and some context conditions

• What is that entrepreneurs do that makes them
  entrepreneurial?
• What is that entrepreneurs do that make them
  succeed?
• What is it that facilitates entrepreneurial
  success?

14
Part 1 Intro and Context
15
Part 2 Idea Vision
16
Part 3 Starting up
17
Part 4 Team and resources
18
Part 5 Resource acquisition
19
Part 6 Perserverance
20
Part 7 Happy ending
21
Conclusions from video clips

• Its always possible
• You are not born an entrepreneur, you become one
• Have a clear vision and goal
• Put a team together
• Dont be put off by resource and competence
  constraints Beg, Borrow and Steal
• Share vision and show leadership
• Find sponsors and mentors
• Tolerate failure
• Tolerate risk
• Try, try and try again
• Learn from mistakes
• Look for opportunities where other see landfills
• Defy social pressure
• Believe that you have the ability to change
  things
• Dont underestimate yourself
• Be open to outside ideas
• Share success

22
This corresponds very well to what we in academia
normally highlight as themes of desirable and
acquirable attitudes and behaviors

• Commitment and determination
• Leadership
• Opportunity obsession
• Tolerance of risk, ambuiguity and uncertainty
• Creativity, self-reliance and adaptability
• Motivation to excel

23
1. The Entrepreneurial Imperative
24
What arguments has been put forward to claim that
this entrepreneurship thing is actually useful ?

• The turbulent environment argument
• The organizational lifecycle argument
• The Blue Ocean argument (or the fallacy of
  Porters generic strategies)
• The national competitiveness argument

25
The turbulent environment
26
A more dynamic industry environment necessitates
more dynamic employees and organizations

• Adaptability
• Flexibility
• Speed
• Aggressiveness
• Innovativeness

New skills
Turbulent env.
Traits and characteristics that the
entrepreneurial employee posses
27
The organizational lifecycle argumentCE as a
revitalization pill
Streamlining, small-company thinking
Large
Development of teamwork
Continued maturity
S I Z E
Addition of internal systems
Decline
Crisis Need for revitalization
Provision of clear direction
Crisis Need to deal with too much red tape
Creativity
Crisis Need for delegation with control
Crisis Need for leadership
1. Entrepreneurial Stage
2. Collectivity Stage
3. Formalization Stage
4. Elaboration Stage
Small
Sources Adapted from Robert E. Quinn and Kim
Cameron, Organizational Life Cycles and Shifting
Criteria of Effectiveness Some Preliminary
Evidence, Management Science 29 (1983) 33-51
and Larry E. Greiner, Evolution and Revolution
as Organizations Grow, Harvard Business Review
50 (July-August 1972) 37-46.
28
The Blue Ocean argument

• Based on 150 case studies
• Evidence found for the fact that sustained
  superior performance CANNOT be explained by
  generic strategy
• Authors argue that we are better off developing
  new value propositions and creating new market
  space than reacting to competition

29
Red vs. Blue Ocean Strategies
Red Ocean Strategy Blue Ocean Strategy
Compete in existing market Create uncontested market space
Beat the competition Make the competition irrelevant
Exploit existing demand Create and capture new demand
Make the value-cost trade-off Break the value-cost trade off
Align the whole system of a strategic firm's activities with its choice of differentiation or low cost Align the whole system of a firm's activities in pursuit of differentiation and low cost VALUE INNOVATION
30
Blue Ocean is becoming an umbrella notion
including also the older ideas of New Game
and time-based competition

• Wal-Mart
• Nokia
• Dell
• Zara

• Amazon
• Ryanair
• Swatch
• Nike
• Cirque du Soleil

• iPod
• Ferrari
• Harley Davidson
• BIC
• Husky

Focus
Low Cost
New Game
SPEED
Diff.
31
Empirical research supports the idea that
entrepreneurial/innovative/blue ocean
companies, outperform their traditional
strategy peers

• Covin Slevin 1989, 1990 (New Market
  Development)
• Davis, Morris Allen 1991 (New Product
  Development)
• Morris Sexton 1996 (Entrepreneurial Intensity)
• Shaker 1999 (NMD
• Hornsby 2001 (EI)
• Goosen 2002 (NMD, NPD)
• Hindle 2004 (EI)
• Yiu 2008 (NPD)
• Jaakko Aspara, Joel Hietanen Petri, 2008 (Blue
  Ocean)

WHY ?
32
National competitiveness argument -1
Entrepreneurship Economic Thought
Joseph Schumpeter (1930s)
Israel Kirzner (1970s)
S
S
D
D
CREATIVE DESTRUCTION Entrepreneurship moves
market away from equilibrium
ENTREPRENEURIAL DISCOVERY Entrepreneurship
moves market toward equilibrium.
New combinations new goods, methods of
production, new markets, sources of supply,
organizations.
Entrepreneur alert to opportunities that already
exist and are waiting to be noticed.
33
National competitiveness argument -2 (GEM)

• General National
• Framework
• Conditions
• Openness (External Trade)
• Government (Extent,Role)
• Financial Markets (Efficiency)
• Technology, RD (Level, Intensity)
• Infrastructure (Physical)
• Management (Skills)
• Labor Markets (Flexible)
• Institutions (Unbiased, Rule of Law)

Major Established Firms (Primary Economy)
GEM CONCEPTUAL MODEL
Micro, Small, and Medium Firms (Secondary
Economy)
National Economic Growth (GDP,Jobs)
Social, Cultural, Political Context

• Entrepreneurial
• Framework
• Conditions
• Financial
• Government Policies
• Government Programs
• Education Training
• RD Transfer
• Commercial, Legal Infrastructure
• Internal Market Openness
• Access to Physical Infrastructure
• Cultural, Social Norms

Entrepreneurial Opportunities
Business Churning
Entrepreneurial Capacity - Skills - Motivation
34
National Competitive Argument -2 (GEM)
35
Conclusion Interesting, but not an absolute
imperative

• Entrepreneurial organizations tends to be
• More aggressive (higher sense of urgency)
• Faster
• More flexible
• More adaptable
• More innovative creative
• But also
• Less cost efficient
• In function of the key success factors of the
  industry, the potential of transforming the
  organization towards being more entrepreneurial
  varies