This past weekend our CEO Simon Hill published a reflection in the Business Reporter on the corporate entrepreneur – has its time finally arrived? Here’s a short excerpt:
Breakthrough innovation is the introduction of new ideas that drive a different way of doing things. This requires risk taking. Breakthrough innovators are willing to make decisions and choices on the basis of intuition and insight, rather than relying solely on data and forecasts – they bet on people rather than manage a process. Evidence shows that more than 80 per cent of breakthrough innovators allow projects to start with no projection of future returns. The innovator’s dilemma (as famously defined by Clayton Christensen in his 1997 book of the same name) has lead to the accepted view that breakthrough innovation should be handled outside core organisational structures and allowed to flourish unencumbered by day-to-day core business life.
To better understand the concept of corporate entrepreneurship it is important to look at the practical example of 3M and how they implemented corporate entrepreneurship policies. 3M has successfully developed a culture that encourages its employees (corporate entrepreneurs) to be creative and come up with new ideas which may or may not work.
They have set aside 15 percent of the company’s time each day to allow their employees (corporate entrepreneurs) the freedom to work on their own projects. They call this their ‘innovation rule’. They have created a management control system that provides the (corporate) entrepreneurs with various resources that they might require for developing and experimenting new products and services. They have allowed their employees the freedom to fail, as it encourages them to be creative and come up with new ideas. They also have a system in place that rewards employees for being creative and generating new ideas.
By creating a flat decentralised structure, communication has been made more effective and open between all. The company acknowledges that open communication has helped them get where they are today making decisions quicker and easier. 3M has benefited from this culture as it has brought it closer to the actual customers, resulting in 3M being able to meet its customers’ requirements quicker and more effectively.
We also found some interesting figures that support the idea that investing in innovation pays, especially for large corporations.
As you can see, there are many advantages to corporate entrepreneurship, as espoused by other companies such as Amazon, Google, Microsoft, PwC and many others. When are you adopting it?