(4 votes, average: 8.5 out of 10)
Loading ...How may an enterprise act like a startup?
By Joaquim P. Menezes
Large enterprises and startups are often conceptually placed in opposing camps, and seen as possessing contradictory strengths and weaknesses.
Take a large tech company. On the credit side, it would likely have:
- Significant financial and other resources;
- An established brand, market penetration, and,
- An infrastructure and systems built up over years
But these very “strengths” could also – in certain circumstances – prove to be that firm’s biggest liabilities.
Because when shifting market conditions or competition require it to be flexible, adopt new procedures, restructure operations and systems, the company may not be able to accomplish that quickly enough (ever witnessed a tractor-trailer trying to negotiate a sharp turn!)
The very activities that an enterprise finds difficult and challenging would be almost intuitive to many a startup.
A startup’s strengths would, typically, be energy, agility, new ideas, and the ability and willingness, when required, to change direction on a dime.
But on the debit side, it may face a resource crunch and may simply not have the money to follow through on its ideas and see them to completion.
Is there a model of entrepreneurship that blends the seemingly paradoxical strengths of an enterprise and a startup, while minimizing the weaknesses?
“There absolutely is,” according to Moren Lévesque a professor in the Department of Management Sciences at the University of Waterloo.
Lévesque, who is Canada Research Chair in Innovation & Technical Entrepreneurship, calls this model: “intrapreneurship” or “corporate entrepreneurship.”
She unpacked this concept beautifully, during the course of an interview yesterday at the University of Waterloo.
A large company can foster a spirit of interpreneurship, Lévesque says, by launching and nurturing smaller “centres of innovation.”
These function within the firm’s overall mandate, but are given significant freedom — as well as funding to experiment and research.
She cited “Xerox Technology Ventures” as an example of intrapreneurship in action.
Through this project, she said, Xerox allocates funds to employees with fabulous ideas for products or services that may be a bit outside of the company’s field of operations.
Nevertheless, employees are allowed to develop their ideas without worrying about where their funds will come from.
Why is this important?
“Because we usually we associate entrepreneurship with risk,” said Levesque. “But that’s not a problem the intrepreneur faces. The intrapreneur doesn’t even need to go and ask for money. The money comes from inside.”
Such security, she said, can be encouraging for people, who are very innovative, but may not be in a position to take on the financial risks posed by entrepreneurship.
Of course, Xerox also gains, because it would have an equity stake in whatever new business develops from this “intrapreneurial” project.
Why is “intrapreneurship” so important today? Lévesque answered that question as well.
With globalization opening up markets, she said, “the competition” is no longer just within the same country, it extends to overseas markets.
In this environment, firms need strategies that could given them a competitive edge.
And intreneurship – nuturing innovation and an entrepreneurial spirit within a company’s four walls – is certainly one such very powerful strategy, according to Lévesque.
Posted on September 7th, 2007 by Joaquim Menezes and filed under Best Practices |
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September 17th, 2007 at 6:03 pm
Yes, it is importnat and interesting topic to discuss in the public and let those CEO and “Founder” know this concept to help the business growing up.