Grow From Within
Companies of all types and sizes must create internal entrepreneurial capabilities to stay competitive in an increasingly globalized marketplace where competitors can come from anywhere. Yet, there is no one-size-fits-all structure and process to building those capabilities within a corporation. The right model depends, first and foremost, on strategic objectives. It also depends on contextual factors such as internal structure and culture and external business environment. In "Grow From Within", Author Dr. Robert C. Wolcott, founder and executive director, Kellogg Innovation Network and a faculty member of the Kellogg School of Management, identifies four basic models that companies can use to structure and organize innovation. Here, he explains each model in brief:If you think your company lacks good ideas, think again. Companies don't generally lack good ideas. Rather, they don't have the right approaches to refine, develop and bring them to market. We've identified four models around which companies can design new businesses successfully. The models are based on organizational ownership (who, if anyone, within the company has primary ownership for creating new businesses?) and resource allocation (is money dedicated to corporate entrepreneurship or are new business concepts funded in an ad hoc manner, through "slush funds"?).
The opportunist -- diffused ownership and ad hoc resource allocation.
All companies begin as opportunists. Without any designated organizational ownership or resources, corporate entrepreneurship proceeds (if it does at all) based on the efforts and serendipity of intrepid "project champions" -- people who toil against the odds, creating new businesses often in spite of the corporation. Small entrepreneurial companies are opportunistic by their very nature. They are typically built around visionary champions and have leadership whose primary job is turning dreams into reality. Yet in large, established companies, encouraging visionaries and allocating sufficient management attention to these individuals is more rare.
The enabler -- diffused ownership and dedicated resources.
The premise of the Enabler Model is that employees will be willing and able to develop new business concepts if they are given adequate support and attention to believe that there is a good chance of the new business becoming real. Dedicating resources enables such teams to pursue opportunities largely on their own. Because there is no formal organizational ownership for such efforts, success depends on top management support to be turned into new businesses.
The advocate -- focused ownership and ad hoc resource allocation.
When business units enjoy significant autonomy from the corporate core, a new opportunity must be adopted by a business unit in order to come to fruition. In the Advocate Model, a company assigns organizational ownership for driving the creation of new businesses to a designated corporate-level group, but it intentionally provides the group only a modest budget, so that they develop compelling value propositions for business units. The Advocate Model is a relatively new and in some ways counterintuitive form of corporate entrepreneurship.
The producer -- focused ownership and dedicated resources.
A separate innovation organization is a common suggestion in the current corporate innovation literature. Unlike the separate organizations of the 1970s and 1980s, however, current implementations of the Producer Model recognize the difficulties such separated organizations have traditionally had in bringing proven new businesses back into the mainstream company. They are more than privileged versions of central R&D. Modern Producer organizations are more closely tied to corporate leadership and strategy, and they provide much greater support for the commercialization, transition and scaling of new businesses.
The right model (or models) for your company depends foremost on your innovation objectives, which will be influenced by how your company is organized, its culture, the pace of change in its markets, and capital and regulatory requirements. But organizational ownership and resource allocation are the cardinal decisions that that lead to success.
Source: "Grow From Within" blog
ABOUT THE AUTHOR
Robert C. Wolcott, Ph.D., Founder & Executive Director, Kellogg Innovation Network (KIN), Faculty, Innovation & Entrepreneurship, Center for Research in Technology & Innovation, Kellogg School of Management