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Corporate Entrepreneurship is an organizational state or supportive environment allowing innovative and future-oriented thinking to flourish at all levels of the organization. It is about thinking innovatively in order to act strategically and flexibly, while managing the demands and pressures experienced by the established organization. Corporate Entrepreneurship can take any organization, even the most traditional or established, on to a new level of productive flexibility.
Lessons From the Start-Up
The term corporate entrepreneurship (CE) refers to the establishment of a state or environment in an organization that draws on the spirit of enterprise often associated with start-up companies.
The entrepreneurial features of a start-up are:
- Contemporary innovation: traditionally, entrepreneurs have been seen as ‘inventors’ who brought new ideas to the marketplace. The evolving role of innovation encourages input from all levels within the organization.
- Leaner/flatter/smarter: the small, flat and flexible structure of start-up organizations facilitates strong team communications and empowers employees to define decisions.
- Flexible means change-enabled: the flexibility of the start-up is particularly valuable in its capacity to manage, and thrive on, change. They can respond quickly to demands for changes in direction, driven by client demand or economic and social circumstances, without losing sight of the overall vision.
- Responsive means competitive: start-up organizations evaluate ideas and then act upon this evaluation, i.e. they are astute in deploying innovative thinking via decision-making and resource allocation.
- Eyes on the future: a proactive approach through forward thinking and anticipating the needs and demands of customers before they arise.
- Clear perception of client needs: breaking through the parameters of current activities to deliver something new. Several of the most innovative start-ups have created new markets, rather than simply offering a ‘better’ version of an existing product or service.
The lessons of innovative thinking and flexibility gathered from start-ups must be balanced by the careful encouragement, gathering and deployment of innovative thinking.
The key is finding a balance between encouraging innovation and managing new thinking to ensure that the overall aims and objectives of the organization are maintained. For example, a health trust full of maverick thinking and behavior would be inappropriate given the political and social responsibility of public sector health organizations. However, a trust entirely lacking in innovation, and burdened by past experiences, will be inefficient and slow to respond to change.
Balancing the management of innovation for the good of the entire organization, while maximizing the potential of the individual innovating employee, is the key to success offered by the CE environment.
Benefits of the CE Environment
CE as an endeavor sits somewhere between change management, innovation and leadership, and provides the potential for today’s organizations to constantly evolve and adapt to changing circumstances.
The benefits or outputs of CE for an organization will include:
- the capacity to manage change affecting the organization itself or its market environment
- the ability to make creative/imaginative use of the resources currently held by the organization
- the ability to meet client needs and to satisfy them
- the capacity to anticipate client needs that may not be fully demonstrated as yet
- the capacity, led by the decision-making and resource-deploying managers of the organization, to weigh risks against potential gains generated by new thinking
The Corporate Entrepreneur
Today, the skills of the entrepreneur are understood to stem not from a rigid set of innate traits, but from a learning process undergone over time. CE is, therefore, also a skill-set held by the organization’s managers, that enables them to draw innovative thinking from all employees, and to deploy it to address client needs, and to manage the organizational environment.
Creating a culture that encourages, acts upon, and rewards innovative thinking is vital, in order to ensure that the ‘raw materials’ are available for these entrepreneurial managers. Equally, employees must be trained in the importance of creativity and opportunity seeking; educated as to how such thinking fits within the overall organizational cultural state of CE; and encouraged and supported in generating new and value-adding ideas, even where managing risk is involved.
Private Vs Public Sector Entrepreneurship
CE has been adopted and adapted by the public and private sectors in subtly different ways. This difference is largely due to the differing objectives, responsibilities and environmental pressures experienced by organizations in these two sectors.
The corporate entrepreneur is found in the private sector, and uses their skills to improve internal processes, products and services to create organizational or market change that will ultimately improve the bottom line.
The social entrepreneur transfers the tactics, strategies and benefits of CE to the social sphere, i.e. the public sector. The responsibility of the organization is of course social in the first instance, and must be financially viable rather than necessarily profit generating. Rather than being thought of in purely financial terms, the success of the social entrepreneurship endeavor is measured by the improvement and further development of services, or the establishment of new services and resources.
The social entrepreneur acts as a change agent within the public sector by:
- working within a pre-established remit to create and sustain social value, while keeping an eye on changes in the needs of service users that may affect that remit
- periodically identifying new opportunities to support and improve services, and reviewing the underlying social mission of the organization
- learning, innovating and reviewing in constant cycles
- acting to maximize the quality of services provided, regardless of the limited nature of resources at any given time
- maintaining accountability to all stakeholders, and ensuring that this accountability is visible at all times
When thinking about adopting CE practices in the public sector, organizational leaders will need to take into account the particular environmental constraints on the sector.
Conclusion
CE is the practice of establishing an entrepreneurial environment in a non-start-up organization; one which encourages innovative thinking across the workforce, and which establishes entrepreneurial skill-sets at the managerial level in order to maximize the potential impact of this thinking. CE as an organizational endeavor adds value by systematically, but creatively, addressing change, managing future client demands, and harnessing the capacity for innovation often already latent within the workforce.
