Corporate Entrepreneurship

Small Business Management

Entrepreneurial Architecture

Entrepreneurial Architecture

Entrepreneurial management differs from corporate
management in its strategic orientation, commitment of
resources and organizational design (Hisrich and Peters
2010
Transplantations of Entrepreneurial DNA in large firms.
Implantation of entrepreneurial DNA in large firms can be
done through its entrepreneurial architecture. Burns
(2012)
Elements of Entrepreneurial Architecture
The link
Entrepreneurial
Architecture
Leadership
Culture
Structure
Strategies
Leadership
Senge (1992) explained that leaders in entrepreneurial
organizations have three primary tasks. It includes the
following:
Designing organizational architecture that promotes learning
Make everyone in the organization believe in their vision
Exploit and manage change
Transformation leaders are proven to promote innovation in
organizations


Leadership and Innovation

Innovation Type Leadership Skills
Building new product and service design Internal marketing build a team of
innovators and garner support
Building new business models Pragmatic architect. Skillful in
imagination, thorough in implementation
New and improved customer solution Deep understanding of unmet customer
needs, vision, charisma and sensitivity
towards customer needs
New and improved product, process or
service offering

Build team, work at great speed because
time to market is critical, strategic
thinking, coordination and tough coaches
Culture and Innovation
Involvement
Consistency
Adaptability
Longterm vision
Mission

Market oriented
Customer oriented
Cost oriented
Efficiency oriented
Innovation oriented
Innovation oriented
culture
Amabile (1999) and Woodman and Schoenfeldt (1990)
studied the individual traits that support innovative culture
and values. These dimensions were:

Risk Tolerance
curiosity
persistence,
self-confidence
intuition
creativity and
intellectual honesty
energy, ability to deal with uncertainty

Structure and Innovation
Flexible
Less hierarchical
Flat
Team centered
Power distance
Informal networks
Decentralized
Empowerment
Organizational Climate: Structure
Loose
structure
Radical
creativity
Strategies and Innovation
Differentiation
Competencies
Processes

Capabilities and competencies sometimes becomes core
rigidities..

Innovation strategies:
market intelligence, customers feedback and responsiveness

Strategies for stability or change.

Innovation Strategies
In terms of strategic choices, entrepreneurial firms have
strategic options available from the three main innovation
strategies. These include:

First to the market
Second to the market
Late to the market

Opportunity cost versus risks.
Entrepreneurial Intensity
Morris and Kuratko (2002) attempted to measure innovation
in large firms by developing the concept of entrepreneurial
intensity

Entrepreneurial intensity can be measured through the size
of breakthrough termed as entrepreneurial degree and
number of small but continuous innovations termed as
entrepreneurial frequency.

The former is defined by Conway (2009) as a major advance
in a particular field leading to radical innovations and the
later is explained by Clark (2004) as learning by doing and
experience curve leading to incremental innovations.
Entrepreneurial Intensity
How they differ?
Possible within existing
culture, structure ,systems
and competencies
Minor changes to products
and services
Incremental
Innovation
Requires changes in structure,
culture, systems, values and
mind-sets
New markets, new products,
services, and solutions
Radical
innovation
Innovation Types
Transformational:
Developing
breakthroughs
Adjacent:
Expanding
existing
businesses
Core:
optimizing
existing
products and
customers
Human Resources and
Entrepreneurial Intensity
The organizations should facilitate both incremental and
radical innovation

Employee attitude towards creativity and CPS in particular
Employee behavior
Group effects


Innovation Management Strategies:
Build the climate for creativity and innovation
KEYS (Amabile et al)

Creative climate questionnaire (Ekvall)
Situational Outlook Questionnaire (Isaksen et al)

Models useful in highlighting important factors that
influence creativity and innovation

...without creative ideas to feed the
innovation pipeline so they may be
promoted and developed, innovation is
an engine without any fuel. (McLean
2005).
Pressures: Challenging Work and Work Pressures

Task Employees
Match
Stretch
and
balance
Information
Information
Freedom
Promotes
creativity
Organizational
Support
Autonomy
Sense of
ownership
Change
goals
frequently
Prescribed
paths
Kills
Creativity
Kills
Creativity
Resources: Time
Promotes
creativity
Organizational
Support
Exploration
Incubation
Fake
deadlines
Tight
Deadlines
Burnout
Distrust
Resources: Money
Increasing the
budget does not
increase creativity
Lower budget
restricts creativity
Threshold
sufficiency
Encouragement of Creativity: Work Group
Organizational
Support
Excitement
over team
goals
Value
diversity:
Different
perspectives
Procedures
Willingness
to help
Promotes
creativity
Encouragement of Creativity: Supervisory
Encouragement

Organizational
Support
Praise,
recognition,
appreciation
Acceptance
of new ideas
No value for
failure
Critique or
deferral
Kills
Creativity
Promotes
Creativity
Kills
Creativity
Encouragement of Creativity: Organizational
Encouragement

Organizational
Support
Values
Rewards
Procedures
Systems
Situational Outlook Questionnaire
(Isaksen 2007)
Challenge/Involvement
Trust/Openness
Idea time
Idea support
Playfulness and humour



Freedom
Risk taking
Debate
Conflict

Innovation Management
Strategies: Risk and Innovation
Lussier Sonfield & Lussier (1997) have suggested that a more
helpful way of entrepreneurial venture, strategically, is in
terms of innovation (its ability to create a unique and different
product) and risk (the probability of financial loss). This is
termed as entrepreneurial strategic matrix. These involve:

High innovation low risk (I-r)
High innovation high risk (I-R)
Low innovation low risk (i-r)
Low innovation high risk (i-R)

Your Organization
What is the single most important factor supporting
creativity and innovation in your current work
environment?
What is the single most important factor inhibiting
creativity and innovation in your current work
environment?
What is the single most important suggestion for
improving the climate for creativity and innovation in your
daily work environment?
Organizational climate for innovation at Google
Google appears to have learned a few lessons from other innovative organizations, such as 3M. Technical
employees are expected to spend 20% of their time on projects other than their core job, and similarly
managers are required to spend 20% of their time on projects outside the core business, and 10% to
completely new products and businesses. This effort is devoted to new, non-core business is not evenly
allocated weekly or monthly but when possible or necessary. These are contractual obligations, reinforced
by performance reviews and peer pressure, and integral to the 25 different measures of and targets for
employees. Ideas progress through a formal qualification process which includes prototyping, pilots, and
tests with actual users. The assessment of new ideas is highly data-driven and aggressively empirical,
reflecting the IT basis of the firm and is based on rigorous experimentation with 300 employee user panels,
segments of Googles132 million users and trusted third parties. The approach is essentially evolutionary in
the sense that many ideas are encouraged, most fail but some are successful, depending on the market
response. The generation and market testing of many alternatives and tolerance of failure are central to the
process. In this way the company claims to generate around 100 new products each year, including hits such
as Gmail, AdSense and Google News.

However, we need to be careful to untangle cause and effect, and determine how much of this is
transferable to other companies and contexts. Googles success to date is predicated on dominating the
global demand for search engine services through unprecedented investment in technology infrastructure
estimated at over a million computers. Its business model is based upon ubiquity first, revenues later, and
is still reliant on search-based advertising. The revenues generated in this way have it to hire the best and to
provide the space and motivation to innovate. Despite this it is estimated to have only 120 or so product
offerings, and the most recent blockbusters have all been acquisitions: YouTube for video content;
DoubleClick for web advertising; and Keyhole for mapping (now Google Earth). In this it looks more like
Microsoft than 3M.
Source: Bala Iyer and Thomas H Davenport (2008) Reverse engineering Googles innovation machine.
Harvard Business Review, April 58-68. Cited in Tidd and Bessant (2009)
Reflections
Questions for today?

Does too much education kill creativity ?

Does ideas of the past support creativity or it limits ones
ability to break from the past and think differently?

Activity
Think of creative problem solving in
organizations
How does it occur?
How would you encourage creative problem
solving in your organization?
Activity
How would you deal with it?
What would you be doing?
How would you behave?
What company might you be
working in?