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  • Writer's pictureJohannes Mutzke

Links in the Chain of "Corporate-Entrepreneurship"​

In my October 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)?

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!


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