Corporate entrepreneurship and innovation - Was the owner a real entrepreneur?

This week we look at the owner who started the business. While the owner may meet the definition of an entrepreneur, there is clear evidence that the degree of entrepreneurship is not absolute, but rather scalar, and therefore it is important to understand where the entrepreneur stands on the scale.

Burch defined what he considered the  range of entrepreneurial spirit/endeavour to be. However, I have attempted to revise the Burch Entrepreneurship Continuum, in order to make it more representative of current business practice, such as franchising.

Therefore when making an acquisition or merger, particularly if the other party is an SME, it is important to ensure that you rate the existing owner on the Entrepreneurship Continuum. This will provide an insight into whether or not the existing owner is likely to cave in and toe the corporate line, or whether they will leave soon after because of their high level of entrepreneurial drive. This will also impact on the level of entrepreneurial drive in the business and the level of innovation.

This can also impact on innovation, and can influence corporate strategy. We will consider this in the next blog on this topic.

Corporate entrepreneurship and innovation - the lifecycle

Certain lifecycle models show that as the business progresses from medium to large size, there is an increase in red tape, systems and controls. This is a necessity in order to gain and keep control, after the heady growth engendered by the entrepreneur. It is also this point at which entrepreneurs either lose the entrepreneurial drive, or leave to start again somewhere else.

Therefore it would appear that large business by default will lose the entrepreneurial spark, in order to increase its efficiency and control. Therefore how does the large business act in an innovative / entrepreneurial way? It is with a large degree of difficulty.

The whole organisation is focused on structured growth through systems and control, and yet the explosive growth generated by the entrepreneur is still needed but not catered for. So are the entrepreneurs still needed? How do you stimulate entrepreneurship and innovation within the constraints of systems and controls?

We will consider these issues in the next edition.

Corporate entrepreneurship and innovation

Unfortunately the global trend by the less informed has been to use entrepreneur and SME interchangeably. While entrepreneurs often do start SMEs, it is not the case that all SMEs are entrepreneurs, nor that entrepreneurs own SMEs. This has lead to the word entrepreneur losing its real meaning and value.

For a while, an attempt was made to differentiate, in the large business context, with the use of the word intrapreneur. However, this appears to have lost favour and momentum, assuming it ever was favoured to start with.

The need for entrepreneurship and innnovation in large businesses has not diminished in the least, and the current global recession should in fact be highlighting the need more than ever. This recession demands quick responses and innovative processes in order to survive. Market development requires a more entrepreneurial and innovative approach.

This blog will attempt to look at these issues going forward.

Dr Rob Smorfitt