Corporate Entrepreneurship III MBAX 6100 Entrepreneurship & Small Business Management Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado

Corporate Entrepreneurship III Today’s Agenda  Corporate Entrepreneurship – Intrapreneurship  Lucent case  Feasibility - Is this a good industry?  Entrepreneur Interview

Corporate Entrepreneurship III Next Week’s Schedule  Corporate Entrepreneurship  Competitive advantage

Corporate Entrepreneurship III Obstacles to Corporate Entrepreneurship  Systems  Organization Structures  Strategic directions  Policies & Procedures  People  Culture Morris & Kuratko, Corporate Entrepreneurship

Corporate Entrepreneurship III Corporate Entrepreneurship - Intrapreneurship  Innovation  Managing innovation  Managing ego "Nobody talks of entrepreneurship as survival, but that's exactly what it is and what nurtures creative thinking." -- Anita Roddick

Corporate Entrepreneurship III Sources for Today’s Talk  Gifford Pinchot & Ron Pellman, Intrapreneurship in Action, 1999, Berrett-Koehler Publishers  Norman Johnson, Senior Vice President Weyerhaeuser Company, “Acquiring and Managing Creative Talent”, Creative Action in Organizations, Ford and Gioia, 1995 Sage Press  A J Chopra, Managing the People Side of Innovation, 1999 Kumarian Press  H. A. Simon, “How Managers Express Their Creativity”  My own experiences

Corporate Entrepreneurship III Innovation

What is Innovation?  “Ability to bring something new into existence.” Webster  Artistic  “human process leading to a result which is: (Kao)  novel (new)  useful (solves a problem or satisfies a need)  understandable (can be reproduced)”

Corporate Entrepreneurship III Creativity - How Does It work?  Process vs. Intuition  Logical Process  become aware  define the problem  consider alternatives  pick best solution  Mental Leap  Eureka!

Corporate Entrepreneurship III Management Innovation  Defines creativity as problem solving  Problem solving depends on knowledge & expertise  Prerequisites of creativity are  50,000 chunks  10 years of experience H. A. Simon, “How Managers Express Their Creativity”

Corporate Entrepreneurship III Managing Innovation

Corporate Entrepreneurship III Managing Innovation  What do creative people want?  Manager’s impact on innovation  Ego agenda

Corporate Entrepreneurship III What Do Creative People Want?  Same things that everyone wants  Recognition of achievements – public and private  Intrinsic & extrinsic motivation  Compensation equal to peers  Recognition of their peers  See the results of their work  To learn new skills  Toys

Corporate Entrepreneurship III Creative People Can Be a Pain in the Butt  Trouble being accurate, punctual and proper. Other things are more important to them.  More loyal to tasks, ideas or profession than organization  Often don’t like working in teams  Weird work habits

Corporate Entrepreneurship III Most Ideas Are Not “Suitable”  Creative people produce ideas that are fresh and different – not always concerned with practicality  People create ideas for themselves, not with you or your problems in mind

Corporate Entrepreneurship III What Should Be Your Response to a “Bad” Idea?  How do you say idea is unacceptable, but not make person defensive?  The more negative your reaction… the more likely it is to be the basis of a good idea the more likely it is to be the basis of a good idea  Find the seeds & fix flaws

Corporate Entrepreneurship III Seeds & Flaws  Find seeds  Ideas are raw material – represent the beginning of the creative process  Find 3-5 advantages  Identify the problems  Fix flaws  Do you want to fix the flaws?  Tailor by eliminating the problems  Transform by thinking of a different way  Easier to add practicality to a fresh but flawed idea, than to add freshness to a practical but old idea. A J Chopra, Managing the People Side of Innovation, 1999 Kumarian Press

Corporate Entrepreneurship III Managing Ego

Corporate Entrepreneurship III Managing Ego  What you say about my idea can really hurt - attacks my self-esteem  Maslow hierarchy of needs  Need to maintain or enhance our self-esteem  Fear of being thought stupid  Perceptions of other people’s reactions to us are important  Reality check, not that you need approval

Corporate Entrepreneurship III We All Want to Look Good  Want to be liked, attractive  Want to belong  Don’t want to be considered dumb  Don’t want to be embarrassed  You try to look good by?  Making someone else look less good  Taking more than your fair share of the credit  Confirm how good we are  Being vindictive or petty

Corporate Entrepreneurship III How Do We Respond to Attack on Our Self-esteem?  Focus changes from the task to reacting to the blow  Repair the damage it caused  Making sure I don’t suffer any more  Not giving you any more ideas  Give you only safe ones  Defend my idea  Attack your idea  If you’re my boss and want me to implement, then don’t try very hard  Sulk

Corporate Entrepreneurship III How Deal with Your Own Ego?  Someone tells me that my idea is dumb  Tell person that they don’t understand my idea  Convince them of the benefits  Shut up and sulk

Corporate Entrepreneurship III Your Strategies for Managing Innovation

Corporate Entrepreneurship III Senior Management  Create a vision  Determine what is blocking innovation – informal channel  Find and reward sponsors  Foster system for self-organizing teams  Show dissatisfaction for the status quo  Intolerant of selfish politics Gifford Pinchot & Ron Pellman, Intrapreneurship in Action

Corporate Entrepreneurship III Middle Management  Role is to create innovative culture  Bet on people, not the idea  Build network of sponsors  Ask for advice, not resources  Become a sponsor  Know the customer Gifford Pinchot & Ron Pellman, Intrapreneurship in Action

Corporate Entrepreneurship III Innovators  Use informal organization  Build effective teams  Build network of sponsors  Ask for advice before asking for resources  Help people in other parts of the organization  Know the customer Gifford Pinchot & Ron Pellman, Intrapreneurship in Action

Corporate Entrepreneurship III Issues in Establishing Innovation  Should you promote conflict?  Is pressure good?  How deal with group think?  Should you recruit from outside or promote from within?  Lone wolf vs. team player – which is more effective?  How prevent “idea infanticide”?

Corporate Entrepreneurship III How Not to Trigger Corporate Immune System?  Develop sponsors  Commitment & active involvement of top management  Reach out across boundaries  Get close to customers  Understand financial dynamics early

Corporate Entrepreneurship III Conclusion on Managing Innovative People  Creative people often are a little weird, but want what everyone wants - to be recognized and respected.  Find the seeds and fix the flaws  Manage the ego agenda, including your own  Your strategies  Listen