The notion of what a big business is and should be is shifting. To remain competitive, even old businesses must become more entrepreneurial and develop new enterprises to stay ahead.
Corporate entrepreneurship is a term used to describe the combining of financial resources and structure with the entrepreneurial spirit of startups.
What exactly is corporate entrepreneurship?
Intrapreneurship, or Corporate Entrepreneurship, is the establishment of new enterprises, goods, or services inside an organization in order to generate new revenue.
Corporate entrepreneurship may be accomplished in two ways. A well-established organization, for example, might develop an innovation internally, create the startup and then release it to external investors before bringing the business back into the corporation at a later stage.
Or the company identifies an early-stage startup to collaborate with or acquire, and then it assimilates the business into the wider organization.
What is the significance of corporate entrepreneurship?
In a fast-paced business environment, corporate entrepreneurship is critical. Corporate entrepreneurship may also result in increased productivity and morale among staff who are granted space and opportunity to confront new challenges and implement unique concepts.
Nonetheless, corporate entrepreneurship has even more advantages, according on Markus Venzin, professor of global strategy and dean of innovation at Bocconi University.
Around 70% of global carbon dioxide emissions are generated by just 100 firms. Corporate entrepreneurship is crucial, according to Markus, because it may lay the groundwork for future action on climate change.
“We need to focus on corporations becoming more sustainable if we want to create a more long-term viable world,” he adds.
On October 28, Markus is giving a free online Masterclass in Management where he’ll talk about how new technologies such as data science, artificial intelligence, and the Internet of Things (IoT) can be utilized to make businesses more sustainable.
The potential of corporate entrepreneurship is enormous, whether it’s banks collaborating with or establishing their own fintech enterprises, traditional farmers taking advantage of the most up-to-date technology in artificial intelligence and biotech to improve their operations more sustainably, or energy companies partnering with dynamic, agile clean energy businesses to rethink the energy business.
According to Markus, businesses are no longer in a position to refuse its adoption.
“It has to be feasible,” he adds. “You must go above and beyond your core product in order to tackle broader issues, collaborate with startups, and perform your job as a manager.”
“It necessitates taking chances as individuals and that’s going to be a critical part of making the world more sustainable.”
Creating a corporate entrepreneurship plan
Firms must have the proper culture in place to foster and enable innovation in order to effectively implement corporate entrepreneurship.
Managers must select individuals with entrepreneurial ambition and be receptive to developing a culture that encourages creation and implementation of new ideas. Companies must also commit to improving their capabilities for segmenting the market, predicting trends, and understanding customers’ needs.
Internally, firms must also reduce what Markus refers to as “firm-related uncertainty.” In other words, they should clarify how excellent concepts are bolstered by the organization.
This is made possible through the use of a machine learning algorithm that analyzes user experience data from across the web to identify areas where users are having difficulties using their site.
Organizational uncertainty: To protect themselves, managers must make sure their concepts are recognized as opportunities. They must package their ideas and persuade others in order to do so.
Decision-making uncertainty: Resources must be committed to sound ideas. Behavioral uncertainty occurs when managers’ actions don’t completely reveal their intentions in a process.
Value uncertainty: To what extent are benefits of entrepreneurial ideas shared? Individual and unit-level concerns include the issue of value appropriation, international commercialization, transfer pricing, and the use of incentive systems. If entrepreneurs want to know what perks they may anticipate if they participate in innovation processes, they must first understand how those processes work.
Examples of corporate entrepreneurship
Markus is also the co-founder and managing director of Corporate Hanger, a venture builder established by Italian electrical cable maker Prysmian Group to discover and develop new ideas from within or outside the organization.
After managing the companies for roughly five years, Corporate Hanger hands them over to clients. Kablee, an e-commerce platform for cables, is one example. Cultifutura is a vertical farming solutions firm, and it’s another example.
Enel is a major Italian energy company that actively encourages corporate entrepreneurship. The Enel Innovation World Cup is an internal competition sponsored by the company’s Innovation & Sustainability department, which encourages risk exposure and gives worldwide Enel employees the chance to start energy-related ventures.
Employees may run the entire production process on their own or in collaboration with others. They create concepts, test them, and then acquire client comments so that the product reaches market consistent with customers’ expectations.
Students at Bocconi University’s Markus’ corporate entrepreneurship course learn about his own experiences and the network of visitors speakers through both.
The great minds in the know-how industry hang out at conferences, where they talk to executives from top firms like Prysmian and Siram Veolia. The president of a data science consulting firm also makes an appearance.
The course also develops students’ competence in deciding to start a firm and how to go about doing it effectively. It also demonstrates the need for large businesses to take advantage of their resources in order to incubate and develop the finest ideas.
“They can be very sustainable,” says Markus. “Corporate entrepreneurship has a lot of potential to make the world more sustainable because when you have a startup that makes things more sustainable, through collaboration with a larger corporation, it can grow much quicker and spread across many countries simultaneously.”
There’s increasing demand for corporate entrepreneurship, whether you’re considering launching your own business or want to learn the skills you’ll get at Bocconi University within a firm or lead the sourcing and acquisition of creative early-stage enterprises to work with. And as Markus points out, businesses are at their mercy.