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Corporate Entrepreneurship Innovation and Creativity

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					        Innovation Strategies
A workshop for the MEET U.S.
                     Program


     Facilitator: Alex F. DeNoble, Ph.D.
              San Diego State University
A Mandate for Corporate Innovation and
New Business Creation!
     New business creation must be
     considered the most important task of
     the senior executive in the existing
     enterprise, especially the larger one.
     Without it the enterprise is unlikely to
     survive. Let alone do well in a period of
     rapid transition such as the one we live
     in and are likely to live in for the
     foreseeable future…
                                    Peter Drucker
                     MEET U.S.
Overview of the Workshop
  • The workshop is organized into four
    parts:
       • Part I - Exploring the concept of
         Corporate Entrepreneurship
       • Part II - Introducing the concept of
         Entrepreneurial Intensity
       • Part III - Developing skills in creativity
       • Part IV - Strategies for
         entrepreneurship, innovation and
         creativity


                       MEET U.S.
Corporate Entrepreneurship


            PART I




             MEET U.S.
What is Corporate Entrepreneurship?

  • A term used to describe entrepreneurial
    behavior inside established
    organizations which leads to the
    creation of new business initiatives
    through:
    – product and service innovation
    – process innovation and
    – market development


                     MEET U.S.
Why Should Companies Invest in
Innovative Activities?
 •   Use of Corporate name          • Use of top management
 •   Use of board of directors        as mentors
 •   Importance of strategic fit    • Use of corporate network
 •   Use of marketing clout         • Use of corporate
 •   Use of internal financing        infrastructure
 •   Use of technology              • Use of staff support
 •   Use of corporate assets        • Product/Service to
 •   Use of production and            market quickly
     manufacturing
                                    • Win/win for corporation
                                      and employee

                             MEET U.S.
Challenges to Innovation Inside the
Company
• Corporate Culture             • Punish risk-taking
• Hierarchical structure        • Lack of
• Bureaucratic                    motivation
  management style              • Inappropriate
• Difficulty in managing          reward systems
  mavericks                     • Turf wars




                    MEET U.S.
Gains from Innovative Investments

• Exposure to possible         • Efficiently utilize plant
  new markets                    space, time and people
• Add new products to          • Integrate activities of
  existing markets               multiple departments
• Develop antennae for         • A platform for management
  new technologies               development
• To generate capital          • Ownership position in new
  gains                          companies




                         MEET U.S.
Exercise I


     Identifying and
   Evaluating Innovative
       Companies



             MEET U.S.
Entrepreneurial Intensity


            PART II




              MEET U.S.
Entrepreneurial Intensity

• Entrepreneurship is not an “either-or”
  proposition!
• There is some level of
  entrepreneurship in every organization!
• In determining how entrepreneurial
  and organization is we look to
        “Entrepreneurial Intensity”

                MEET U.S.
Entrepreneurial Intensity


  Entrepreneurial Intensity captures the
        Frequency and Degree of
         Entrepreneurial Initiative




                  MEET U.S.
To be Entrepreneurial…

                      Degree of
                  Entrepreneurship



 Innovativeness       Risk-taking    Proactiveness




                       MEET U.S.
A Few Words About Innovation


     There's a way to do it
         better...find it

                          - Thomas Edison




              MEET U.S.
Product/Service Innovation
 • New-to-the-world products/services
                                                       High
 • New-to-the-market products/services
 • New product/service lines in a company
 • Additions to product/service lines




                                            Degree of innovation
 • Product improvements/revisions
 • New applications for existing
   products/services
 • Repositioning of existing
   products/services
 • Cost reduction for existing
   products/services

                                                          Low
                        MEET U.S.
Directions for Innovation
                             MARKETS
                      Existing            New
    Existing
P
R               Existing Product/ Diversified Market
O                Market Space           Space
D
U
C
T              Diversified Product Diversified Product/
S                     Space           Market Space
    New

                           MEET U.S.
Process Innovation

 • Major new process                             High

 • Minor new process
 • Significant revision of existing




                                      Degree of innovation
   process
 • Modest improvement of existing
   process


                                                    Low
                  MEET U.S.
Process Innovation
           Where can innovation happen?
 •   Administrative systems
 •   Service delivery systems
 •   Production methods
 •   Financing methods
 •   Marketing or sales approaches
 •   Procurement techniques
 •   Compensation methods
 •   Supply chain management
 •   And more ….

 The bottom line is that Innovation can happen anywhere!!

                         MEET U.S.
Risk-Taking
  • A decision-making under
    conditions of uncertainty with the
    possibility of incurring significant
    losses
  • Two perspectives on risk:
    – Sinking the boat risk
    – Missing the boat risk




                   MEET U.S.
Sinking the Boat Risks
  • What happens if the company
    pursues a concept and it does not
    work out?
  • Could result from:
    –   Poor thought-out concept
    –   Bad timing
    –   Insufficient market research
    –   Inadequate marketing mix (4P’s)
    –   Undercapitalization


                       MEET U.S.
Missing the Boat Risks
  • What is the impact of not pursuing an
    opportunity that would have become
    profitable?
  • Could result from:
    –   Delays in acting on a concept
    –   Preempted by competitors
    –   Changing customer needs
    –   Overemphasis on market research, financial
        data or input from consultants…


                        MEET U.S.
Always remember


   There's as much risk in doing
   nothing as in doing something.
                          - Trammell Crow




              MEET U.S.
Proactiveness

 • Involves
   – Action
   – Perseverance
   – Adaptability
   – Willingness to assume
     responsibility for failure

                   MEET U.S.
Entrepreneurial Intensity


   If you always do what you have
   always done, you will always get
   what you have always gotten….
                             Tom Peters




                MEET U.S.
Exercise II

   How effective is your
   company’s Innovative
        Practices?



              MEET U.S.
Developing Skills in Creativity



           PART III




              MEET U.S.
Creativity
• Applying a person’s mental ability and
  curiosity to discover something new
• Relating previously unrelated things
• Connecting things together in new and
  different ways
 "Being creative is seeing the same thing
      as everybody else but thinking of
            something different"



                 MEET U.S.
Exercise III


   What’s wrong with today’s
      Laptop Computers




               MEET U.S.
Exercise IV


    Let’s reinvent the Laptop
             Computer!




              MEET U.S.
Strategies for Entrepreneurship,
Innovation and Creativity




              PART IV




                MEET U.S.
Setting the Environment….

   It's the job of a manager not to
   light the fire of motivation, but
   to create an environment to let
   each person's personal spark
   of motivation blaze.

                       - Frederick Herzberg

                MEET U.S.
Setting an Innovative Environment
entails….


  •   Envision the future
  •   Create a sense of urgency
  •   Expect calculated risk-taking
  •   Encourage experimentation
  •   Develop incentives
  •   Focus on customer needs
  •   Seek feedback from stakeholders

                   MEET U.S.
But Beware of the Pitfalls…

  • Barriers to an innovative culture
    include:
    – Too much focus on the present
    – Not understanding innovation
      processes
    – Fear of and resistance to change
    – Punishing failure
    – Top-down management
                   MEET U.S.
And finally…..

    The person who says it cannot
     be done should not interrupt
     the person doing it.

                             - Chinese Proverb




                 MEET U.S.
Thank You!




   MEET U.S.