Inspiration & Creativity

Best Practices for Corporate Entrepreneurship – #1 C-Suite Vision & Championing

As a follow-up to my previous article on the challenges of “corporate entrepreneurship” (a term inherently loaded with tension), I’d now like to focus on best practices of “getting it right.” If you missed the previous articles, I highly recommend going back to review them. They provide insight to the inherent complexities facing those who embark on this journey, and important context for how to apply the best practices I’ll propose in the coming articles.

In the course of our innovation work over many years we’ve benchmarked and worked with dozens of companies and hundreds of leaders (innovators and entrepreneurs) that have led us to conclude on a set of “7 keys to success.” I’d like to zoom-in on them one-at-a-time in the next few articles.

The first is that the CEO/C-suite must provide “Vision & Championing” for the overall entrepreneurship effort of the enterprise. While it may seem obvious, this is typically where we find significant gaps, and where entrepreneurship initiatives either rise or fall. Why? Let’s break this success-factor it down into specific components … what it looks like, why it’s important and what “Vision & Championing” actually means:

Two Silver Chess Pieces on White Surface

  • Protection: entrepreneurship is counter-cultural by nature and therefore has to be protected – it’s a different way of working, often a separate entity, different profiles of people, it must have permission to play by different rules & measure and by different metrics. Because of the “cumulative differences” to most parts of the mainstream, the c-suite must be ready to take on the corporate-antibodies that will otherwise kill these tender new cells.
  • Buy-in: entrepreneurship can’t just be “tolerated” or seen as a temporary fad. It has be “their idea” (senior leadership), a “must-have,” with a coherent & strong conviction around a strategic-rationale for its necessity to the future of the company (where it fits, and why we have to do it).
  • Commitment/Support: this takes buy-in to the next level by putting skin in the game – resources, brand assets, budgets, great people (not the leftovers), active communication (internal and external), removal of roadblocks, frequent personal/visible attention/presence/interest.
  • Courage & Faith: it’s a long, hard road with most seedlings dying along the way and only a few mighty trees surviving over years & years of time. It takes patience, dogged courage and a deep conviction to continue believing – despite frequent failure (which is the name of the game) – to stay committed to see results. Lack of this commitment is the primary reason 80% of corporate incubators fail…because executive leadership simply can’t sustain the above over the long-term to see results (for various reasons – changes in leadership, financial pressures, shifts in strategy, cultural clash, lack of focus, etc.).

While all “best practices” we will review together in the future are interrelated and important, they all rely on “Vision & Championing” as the foundation. With it, almost any obstacle can be overcome and goal achieved. Without it, the “house of entrepreneurship” (no matter how well designed) will eventually crumble.

Picture: www.pexels.com

Links in the Chain of “Corporate-Entrepreneurship”

In the last post I mentioned the motivation for entrepreneurship-initiatives in a corporate environment (ex incubators, internal startups, “intrapreneurship,” etc.) and painted a picture of the overall challenge these efforts present. I used a few “parables” to make the challenge come to life and would now like to hone in on the specific (and unusual) image of the “speed-boat chained to the aircraft carrier” (you may need to take a moment to go back and read it) as a was to sharpen your understanding on the key points-of-tension between these two worlds.

In this parable there are a few key points to take to heart – first & foremost, if you’re doing entrepreneurial work inside of a corporate organization, you are on a chain (the corporate’s constraints) and can accelerate & maneuver only until the end of the chain before going the same speed as the aircraft carrier itself. Second, if the above is true, the following questions become absolutely essential to answer: how long is the chain?…what are the links in the chain (the constraints themselves)?…and how do you make it longer (more freedom to move)?

Selective Focus Photoraphy of Chains during Golden Hour

Based on our firsthand experience working and benchmarking with dozens of companies, here are the most common “links in the chain” (including constraints & pitfalls) that face most entrepreneurial teams in big organizations. I’ve organized them in three categories:

Culture & People

  • Hi-Risk & hi-reward (“lose everything…or make millions…”) – both of these are arguably the most powerful forces that drive & shape entrepreneurship in the real world. However, theses are also the most difficult to authentically replicate in large organizations (ex reward mechanisms, ownership, personal risk exposure, etc.).
  • Entrepreneurial profiles – it’s challenging to find these kinds of people in a corporate setting populated mostly with “sustainers” instead of starters (but they exist! – the challenge is finding them).
  • Risk-averse environment – in corporate cultures largely shaped by “right the first time,” “commitment to excellence,” and “protecting the brand”… tolerance for failure – the very thing needed to innovate – is limited.

Strategy & Management

  • Innovation strategy – limited direction on the avenues of growth and innovation beyond the core business. This lack of focus can make it extremely difficult to make necessary “bets” today for innovation activities that may only bear fruit the “day after tomorrow.”
  • Expectations – there is often a mis-match between the outcomes corporates expect versus the effort, time, resources, investment, number of ideas etc they’re willing to commit to make it happen. It’s the classic pipe-dream of picking “the one $100-million-idea” out of the stack of brainstormed-post-it-notes, dedicating 20% of a team’s time to build- & scale-up it up in the next 12 months. It ain’t gonna happen!
  • C-Level commitment – because entrepreneurial activities are so counter-cultural and require significant time to bear fruit, the level of “faith & protection to operate differently” cannot be under-estimated. This has to start at the C-suite-level and be vigorously sustained over time. Changes in leadership at this level make entrepreneurial efforts particularly vulnerable.

Process & Resources

  • Processes & metrics – an aircraft carrier & speedboat exist for different reasons, operate differently and should be measured differently. The same is true between the corporate- & entrepreneurial- worlds. Yet too often we find the entrepreneurial world having to operate under the same constraints & processes and being evaluated by the same metrics as the corporate world.
  • Time & speed – these are arguably the starkest “process-differentiators” when thinking about the previous point. Taking time to deliberate and perform deep analysis is a “must” for big organization (there’s too much at stake not to), whereas it can kill a startup whose life depends on sustaining momentum, taking action and “learning by doing…and failing.”
  • Resource-allocation – entrepreneurial efforts can often be a “side-show” in a corporate organization and suffer from “left-overs” – i.e. under-funding, 2nd rate talent, or half-hearted effort. The degree to which resources are committed to these activities can often make or break the success of entrepreneurial initiatives.

So, as you read through the list of “links in the chain”, think about how your corporate entity performs on each of these dimensions. Is it a “one-size-fits-all?” Does your organization recognize the difference, make provisions and “give you chain” to operate differently? How much? Try rating each link on a scale from 1-10 (mini-diagnostic). Understanding which chain-links are particularly problematic is a starting point for thinking about how to lengthen it…

…I’ll be back with best-practices that do exactly that!

Picture: www.pexels.com

Two Parables Illustrating the Challenge of Corporate Entrepreneurship & Incubation

One of the major focus-areas of our consulting practice is helping companies innovate by re-connecting with customer needs in order to bring new “high-traction-breakthrough-offers” to market. Remarkably, a significant majority of these clients are corporates (or large organizations) who feel a sense of urgency around this subject and look to entrepreneurship and startup-incubation as a key way to make it happen. Why is this the case? – the answer has many dimensions but is mostly centered on the need to break out of the rigidity, stagnation and incrementalism that characterizes large organizations and instead embrace the behaviors intrinsic to entrepreneurship – risk taking, customer-centricity, breakthrough-ideas, speed, growth, etc…

While this logic intuitively makes sense, realizing it “in practice” proves to be extraordinarily difficult and often elusive. In fact, it often ends in frustration, disillusionment, performance far below expectations, and significant resources wasted chasing a pipe-dream. Why?

Photo of Leopard Inside the Cage

To answer this question, it’s important to zoom out to get a perspective on the real problem and the daunting challenge it represents. I’d like to introduce you to two analogies, or parables, that I believe help visualize and internalize the dilemma (each of them bring light to different elements of the problem):

  • Building a Jungle-Animal-Habitat in the City – imagine being given this mission in the middle of New York City. This would be an extraordinarily difficult and require an immense amount of compromises (essentially building a zoo) – artificial habitats, confined spaces, imported non-local nutrition, specially skilled workers, etc… The bottom line is that combining a foreign habitat with a local ecosystem is immensely challenging and only possible with significant “artificial support”, barriers/protections, and concessions.
  • Speedboat Chained to an Aircraft Carrier – imagine the USS John F. Kennedy (1,092 feet in length and 100,000 tons) built as a giant platform whose core function is to be a resource- & operational- base for battle. Its key attributes are stability, capacity, reach and range that require a complex set of hierarchy and processes to operate what is essentially a “floating airport.” On the other hand think of a speedboat – small payload, speed, short distances, few people, etc. Now imagine the strange thought of them chained together… the speedboat can do whatever it wants to do until it gets to the end of the chain…then it’s going the same speed as the aircraft carrier.

If understanding the problem is fifty percent of the solution (and, yes…some exist!), I hope these parables begin to spark your thinking regarding the multi-dimensional challenges facing “corporate entrepreneurship” (a term which most would agree is full of tension & paradox). In future articles we will attempt to highlight and explore some of these dimensions & ramifications at a deeper level.

However, to further provoke your thinking on the the problem and its application to real life, I’d like to leave you with a few questions – 1) how long is the “entrepreneurship-chain” in your organization at which your innovation efforts are bound by the same constraints as the mother ship?, 2) whats is the list of specific factors that make up these constraints/compromises? (we’ll explore these constraints, and what to do about them, in future posts).

picture: www.pexels.com