Presentación Carlos Baradello

Corporate Entrepreneurship:

Fundamentals

Carlos S. Baradello, PhDAssociate DeanAssociate Dean

Corporate & International ProgramsSchool of Business & ManagementSchool of Business & Management

Corporate Entrepreneurship

Corporate Entrepreneurship: Creating a Company within a Company

AGENDA

– Introduction to Corporate Entrepreneurship (CE)– Globalizationn: opportunties and risks.

CE Vocabulary– CE Vocabulary– Project Definition– CE Models – Project Evaluation– Integration of Concepts– Concluding Remarksg


C t E t hi (CE)Corporate Entrepreneurship (CE): Creating a Company within a Company

THEMESTheme #1: The impact of Globalization

h iover the corporationTheme #2: CE FundamentalsTheme #3: Creating a Process for CETheme #4: CE Project TemplatesTheme #4: CE Project TemplatesTheme #5: Models of CETh #6 I t ti ll C tTheme #6: Integrating all Concepts


THEME #1

Th I t fThe Impact of GlobalizationGlobalization

over the Corporation


Global Paradigm ShiftsPROFESSIONAL AREAS OF INTEREST

Global Paradigm Shifts

Innovation &Flat Digital &

EntrepreneurshipFlat Digital

Society

Invisible MarketsMarkets

3

Corporate EntrepreneurshipNetworking : Ecosystem IS KEY in Value Creation

Corporate EntrepreneurshipOlas de innovación tecnológica

BioTech

Evolución de Silicon Valley1950 – 20xx?

BioTechGreenTechRe. EnergyWater, etc.

=> Outsource SWR & SVC

=> Outsource Metal/Mechanical

=> Outsource PCB’s

71950 1960 1970 1980 1990 2000 2010


Global Growth will not be uniform: (Country GDP Rank in Billions of Real (2003) U.S. Dollars)

2000 2010 2020 2030 2040 2050

Market shifts are coming and will affect most economies

2000 2010 2020 2030 2040 2050U.S. U.S. U.S. U.S. U.S. China

Japan Japan China China China U.S.

Germany Germany Japan Japan India India

U.K. U.K. Germany India Japan Japan

France China U.K. Russia Russia Brazil

Italy France India U.K. Brazil Russia

China Italy France Germany U.K. U.K.

Brazil India Russia France Germany Germany

India Russia Italy Brazil France France

Russia Brazil Brazil Italy Italy Italyy y y

Source: Global Insight World Service and Goldman Sachs


Tecnology + Innovation + Sucess $$$


Globalization imperatives

Opportunities:

Global markets

Threats/Risks:

New competitors• Global markets• Global supply chain• Idea circulation

N t hi

• New competitors • Interdependencies• New P/S in your local

market• New partnerships• Access to new technology

and talentAccelerated growth

market• Speed/Acceleration• New personal/

professional requirements• Accelerated growth• Personal Development

professional requirements• Increase pressure for

talent


Perspectives on the Nature of Entrepreneurship(1)p p p

WealthCreation

Entrepreneurship involves assuming the risks associated with the facilitation of production in exchange for profit.

EnterpriseCreation

Entrepreneurship entails the founding of a new business venture where non existed before.

Innovation Entrepreneurship is concerned with unique combinations of InnovationCreation resources that make existing methods or products obsolete.

ChangeCreation

Entrepreneurship involves creating change by adjusting, adapting, and modifying one’s personal repertoire, approaches, and skills to

t diff t / t iti il bl i th i tCreation meet different /new opportunities available in the environment.

EmploymentCreation

Entrepreneurship is concerned with employing, managing, and developing the factors of production, including the labor force.

ValueCreation

Entrepreneurship is a process of creating value for customers by exploiting untapped/unseen opportunities.

Growth Entrepreneurship is defined as a strong and positive

Creation orientation towards growth in sales, income, assets, and employment.

(1) Entrepreneurial Intensity, Michael H. Morris


THEME #2

CECEF d t lFundamentals

Corporate EntrepreneurshipEnvironmental Turbulence Creates a Need for new Management Practices(1)

Customers• Fragmented markets• Increasing customer expectations lead to

TechnologyFirms required to change how they operate i t ll d t t ll d t• Increasing customer expectations lead to

customize (products, customer support &communication) vs. standardization.

• Higher cost of customization lead to cultivate long-term customer relationships

• Sustainable growth require learning new

internally and compete externally due to:• New Information management• New production and svc. delivery tech.• New customer management tech.• New logistics and inventory mangt. tech.

N l f t t h

The Embattled

Sustainable growth require learning newskills in serving global markets

• New sales force management tech.• New product development tech.

Corporation

Competitors• Competitors lead customers to new markets

increased expenditures in product develpmt.

Legal, Regulatory, and Ethical Standards• Increased accountability, visibility and

transparency to multiple stakeholders.increased expenditures in product develpmt.• Hard to differentiate, competitors

aggressively/ quickly mimicking new prod/svc• Increased competition with companies in

other industries forcing to change rules or even the game!

• Increased litigious environment raises the stakes on product liability, increase costsand restrain innovation.

• Regulatory restrictions limit choices while force firms to learn new ways to compete

• Society holding firms more responsible for

(1)Corporate Entrepreneurship and Innovation, Michael H. Morris, PhD., Donald F. Kuratko, PhD., Jeffrey G. Covin, PhD.

• Competitors specializing in narrow, profitableniches avoid costs of competing across a broader product and customer range, while attacking most profitable areas of business

• Society holding firms more responsible for the environmental and social implications of their actions


Corporate Entrepreneurship: WHY?

Renew y Regenerate the CorporationRenew y Regenerate the Corporation

Personal New Revenues &Profits

ProfessionalGrowth

Increased Portfolio of P/S & kGrowth P/S & markets

I d titi hi ti tiIncreased competitiveness, sophistication,able to “average-out the local turmoil's”

Corporate EntrepreneurshipDisruptive Technologies…

DISRUPTIVE INNOVATIONS

Customers/Markets…Disrupt Global Markets

Emerging

DISRUPTIVE INNOVATIONS Present new risks and require

new approaches to doingbusiness

Different customer needs, lower ability to pay and

i l t l ti

TRADITIONALBus. Development

Earns the right to

compete!requires a complete solutionSpeed of execution

compete!

MATURE STATE• Focus on large & dominant

Deadly embrace withSustaining MIGRATION

PATH

markets/customers• Meet growth goals in the

short term• Market behavior well

understood

embrace withestablished

customers & technologies

DisruptiveSustaining Products/Technology

g

Adapted from: “The Innovators Dilemma”, Clayton M. Christensen, HBS Press.


VALUE CREATION MIGRATION

Virtual

VALUE CREATION MIGRATION

Va Virtual Service Provider

alue

Solution Service Layer

Domain Information

Application / Services Layer

Standa Domain Information

Subscriber Equipment / Basic Services

Web Portal – Information Utility

ardizing

16Infrastructure Equipment

g


C t E t hiCorporate Entrepreneurship: Creating a Company within a Company

Markets/Customers

NEWBUSINESS

New Markets NEW

VENTURES

MarketExtensions

ESTABLISHEDCURRENTBUSINESS

Prod /

ExistingMarket(s)

E i ti P d t( ) N

CORPORATION

Prod./Tech’s

ExistingProduct(s)

Product(s)Extensions

NewProduct(s)


Corporate Entrepreneurship: NEW BUSINESSES

New Business New Learnings

New Risk

Risk Opportunity of Failure

Failure New Learnings


Corporate Entrepreneurship:Corporate Entrepreneurship: Virtuos Cycle

NewNew

L i ’Revenue

f Risk

Failure

Learning’sProfitsLearning’s

Failure

Success


Corporate Entrepreneurship: Promisesp p p• Renew & Regenerate

– New Technologies– New Markets– New Markets– Process Re-engineering– New Value Creation/Extraction– New organizational models

• Re-energize/Promote Corporative Culture Change– Dynamism & Speed– Promote taking measured risks

P l h ll d b t iti / i k– Personnel challenged by new opportunities/risk• Consistent Risk Management:

– Increase success probability– Increased opportunities (breadth scope quality– Increased opportunities (breadth, scope, quality,

quantity)– Able to stop earlier

• Creation of Corporate Memory:p y– Keep track of the first or second try– Lessons learned


Established Firms are under Pressure…stab s ed s a e u de essu eTheir old paradigm is breaking down…

• Bigger creation of stockholder value,• Faster creation of stockholder value,• Faster ability to respond to market changes,• Faster ability to embrace new technologies and y g

paradigm changes,• Increase their readiness to “tolerate risk”• Increase their readiness to “innovate” orIncrease their readiness to innovate or

“integrate innovations” => network Innovation• Customer-centric innovation• Increase ability to “fail wisely”• Increase ability to fail wisely• “…Stay hungry, stay foolish...” quote from Steve

Jobs

Corporate EntrepreneurshipTraditional Management

vsvs.Entrepreneurial Management

Encourages control Encourages Opportunity seeking

Encourages discipline Encourages innovation

Encourages conformity & efficiency Encourages vision & drive

Encourages training Encourages learning

Encourages uniformity Encourages questioning stat-quo

E ff ti / t t E b ildi l ti hiEncourages effectiveness/contract relationships only

Encourages building relationship within & outside the organization

Encourages long-term planning with functional knowledge

Encourages strategic thinking at all levels cooperation and rapidfunctional knowledge all levels, cooperation and rapid knowledge transfer.

Encourages to create certainty and clarify ambiguity. Risk avoidance.

Tolerates uncertainty and ambiguity. Promotes risk takingclarify ambiguity. Risk avoidance.

Discourages failure.ambiguity. Promotes risk taking and embraces changes


Large Corporations ProsperedLarge Corporations Prospered……in a Closed Innovation environment


Corporations are moving to…Corporations are moving to……an Open Innovation Model


Some ventures are better-off…Some ventures are better off……outside the corporation

The corporation becomes/creates an “Ecosystem”


Oth fi ´

Closed vs. Open Innovation

Our New M k t

Other firm s Market

License, Market

Internal Technology Base

License, Spin-out, Divestiture

Our Current Market

Internal/External Venture Handling

External Technology Insourcing External Technology Base

Stolen with pride from Prof Henry Chesbrough UC Berkeley, Open Innovation: Renewing Growth from Industrial R&D, 10th Annual Innovation Convergence, Minneapolis Sept 27, 2004


THEME #3

C tiCreating a P fProcess for

CECE



Speed -- Value Creation -- Renewal -- Transformationp

• The creation of new business units by an festablished firm,

• The development and implementation of entrepreneurial strategic thrusts,p g ,

• Promotion/emergence of new ideas from anywhere:

up/down the hierarchy up/down the hierarchy all functions/sectors up/down the supply chain



G P ti I /E t l I /F l

• Corporate Venturing: speed of execution for the f ti f t / t t i i t t

Governance -- Proactive -- In/External -- In/Formal

formation of new ventures/strategic investments

• Intrapreneurship: individual empowerment, take initiative, speeding tickets “are OK” and risk taking culture

• Bring the Market Inside: connected to trends via multiple stakeholders: suppliers, customers, regulators, academics, investment bankers, other industries, etc…., , ,

• Entrepreneurial Transformation: institutionalize permanent adaptability, renewal at increasing speed, risk/ rewards profile tolerance to failure -- corporate DNArewards profile, tolerance to failure -- corporate DNA



Communicate Sell Review Fund

• Elevator Pitches

Communicate -- Sell -- Review -- Fund

• Business Planning Process• Poster Sessions and One-Pagers• Business Pitches• Product/Service/Process Demos

Establish Credibility -- Passion --Clarity of Thoughts -- Mastery of Complexity

THE RIGHT OPPORTUNITY BY THE RIGHT TEAM!THE RIGHT OPPORTUNITY BY THE RIGHT TEAM!


If t t h bIf you want to have buyers…You need to be selling…

Elevator Pitch & One-Pager

Project Plan

Business Pitch Presentations

Demonstrations/Proof-of-Concept

C t T ti i l Customer Testimonials

Corporate EntrepreneurshipDisciplined Incremental Phased ReviewNew Venture Incubation/Acceleration Process

ExplorationOpportunityQualification

Business Plan

“Deployment, Launch & Execution”Opportunity Evaluation

eds

Mar

kets

Phase 0 Phase I Phase IIIPhase II

dige

nous

Nee

plic

able

gh G

row

th M •Locations

•Demographic•Gets/Gives

•Site Survey•Bus. Validation•Contract

•Customer •Buildings•Managers • Execution

Team CHAMPIONING

•Ind

•Rep

•Hig

WhitePaper

Business Plan

ProjectProposalPaper PlanProposal

Shelve/

Learning

Refinement & Framing

Corporate EntrepreneurshipDIPR: FUNNELS DOWN THE BUSINESS OPPORTUNITIESBUSINESS OPPORTUNITIES

Market/TechnologyMarket/Technology Trends Enables a disciplined process to

screen business opportunities, Establish a common framework to

Enables a disciplined process toscreen business opportunities,

Establish a common framework toEstablish a common framework to manage risks,

Maximize the efficiency (risk, cost and time) of the New Venture

Establish a common framework to manage risks,

Maximize the efficiency (risk, cost and time) of the New Venture )Exploration,

Capture the learning to avoid repeating the same mistake,

f l

)Exploration,

Capture the learning to avoid repeating the same mistake,

f l

Business Deployment, Launch & Execution

Defines a corporate culture (i.e. “HP way”) or approach to profitable growth.

Defines a corporate culture (i.e. “HP way”) or approach to profitable growth.

Date post:	17-Oct-2014
Category:	Technology
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