Fast-tracking innovation: why corporate entrepreneurship matters
Any growth-oriented business or enterprise appreciates the value of accelerating innovation. Companies that don't innovate tend to stagnate, fall behind competitors and ultimately fail.
Never has this been more true than in today's highly competitive and dynamic business environment. As companies are adjusting to the disruption caused by the pandemic, they need to look for new ways to secure their future.
Businesses need to adapt to be ready for the many changes the near future is likely to bring. Embracing corporate entrepreneurship and innovation can allow corporate leaders to achieve rapid acceleration and success.
A concept coined as corporate venturing describes entrepreneurial activities that entail collaboration between established organizations with entrepreneurs, and new innovative businesses.
Corporate entrepreneurship is the creation of a new business within an existing firm. It entails turning creative ideas into valuable innovations that provide solutions for customers.
Corporate entrepreneurship encompasses a number of components, such as an ability to innovate, calculated risk-taking, agility and perseverance. These key skills help managers renew and re-energize their businesses objectives and boost overall business performance.
When we think of companies we always think of the bottom line, in other words, the famous EBITDA (earnings before interest, taxes, depreciation and amortization).
However, what is often forgotten is that revenue and EBITDA are just some of the components. Innovation is also a key driver for shareholder value, and sufficient, efficient innovation activities can increase the EBITDA x Valuation multiple radically. This way innovation activities can not only produce new revenue, but can have a tremendous impact on shareholder value as investors see the future of the company to be more bright and risks of failure are reduced.
Indeed, implementing a corporate entrepreneurship program to encourage innovation activities can come with enormous benefits for businesses.
Growth: Corporate entrepreneurship ensures you have a steady stream of winning innovations in your pipeline, which leads to future revenues and growth for the business.
Increased productivity and employee morale: Corporate entrepreneurship programs enable employees to work on ideas that they find exciting and challenging. Increased employee engagement and motivation ultimately leads to increased productivity.
Source of competitive advantage: Employees are invaluable in identifying market opportunities and threats. They can provide insights that competitors do not have and give you the competitive edge you're seeking.
Employee recruitment and retention: Encouraging corporate entrepreneurship will attract talented and entrepreneurially minded employees. Furthermore, allowing employees to pursue their business ideas leads to higher levels of job satisfaction. Higher levels of employee satisfaction will translate to less staff turnover.
You can help employees become more productive by fostering a culture that encourages creative thinking and inspires them to share their knowledge, skills, experience, and suggestions.
Here are some ways you can create an innovation-friendly environment in your business:
You want to instill in your employees that not trying anything new is often the biggest risk. So, encourage your employees to be open, share ideas and explore new ideas without fear of retribution.
When hiring new talent, look for employees who align with your company culture but aren't necessarily the same as you. Having employees who have different abilities or approaches to problem-solving will boost your innovation efforts. For instance, companies often have entrepreneurs in boardrooms, but seldom as individual hands on deck. Entrepreneurship as a Service (EaaS) is certainly something that would bring additional perspective into planning and day to day operation.
Be open and approachable to new ideas, and set aside spaces for employees to create and share ideas. You can also support innovation by setting up meetings to share ideas or time for employees to break from routine roles to inspire new thoughts. Also, when your employees do have an idea they want to test and validate, make sure they are given enough time and resources to do so. This will foster a culture where employees see that innovation is taken seriously and is a strategic priority.
Create work practices to encourage employees to work together and openly discuss ways to improve. You can allow job swaps that foster new perspectives from different employees or hold process improvement brainstorming sessions with employees from different parts of the business.
Ensure that you establish a process for assessing each new idea and that all employees understand the process. Employees are more likely to recommend ideas if they believe they will be properly considered. Make a point of promptly acknowledging every suggestion and providing feedback on the idea.
Today's business landscape is increasingly competitive, and companies that don't invest in corporate entrepreneurship and innovation risk failure. A solid corporate entrepreneurship and innovation strategy will help you stay relevant, acquire new business and increase profits.
Here is what you can do to promote and build an entrepreneurial and innovative corporate culture:
The most successful corporate innovation strategies involve key corporate stakeholders, including executives, board members, and others. A well-informed and highly motivated team is crucial for the success of your innovation. You can collect the team's views and ideas through brainstorming, group discussion, and other crowdsourcing activities.
What do you want to accomplish? Establishing clear goals and objectives is vital for any successful corporate innovation program. Setting up predetermined goals is also invaluable when evaluating progress during the implementation phase.
A dedicated corporate entrepreneurship and innovation team will help you oversee the implementation and management of your business initiatives. It will allow you to pursue innovations without disrupting normal day-to-day business operations.
Your new product or service is more likely to succeed in the marketplace if it aligns with customer needs and preferences. Therefore, when launching a new product or service, start by validating the solution, building a minimum viable product, and doing routine iterations. Doing this will help you achieve product-market fit.
Source the right minds with entrepreneurial abilities for creating innovative processes that stick. Instead of banking solely on in-house talent, you may want to consider serial entrepreneurs, founders, experienced product managers and venture designers with battle-tested ideas and ability for agile thinking and most importantly, a track record of success. Talk to us for more information!