1. Entrepreneurs Challenging The Unknown
Zelimir William Todorovic Ph.D.
Doermer School of Business and management Studies
Indiana University – Purdue University, Fort Wayne

2. Entrepreneur Is it all a Myth
Entrepreneurship - The Introduction

3. Etrepreneurship in the Past
“ If you are a small businessman, you may be as extinct as the village blacksmith”
“Small business is as dead as the dodo”
Entrepreneurship - The Introduction

4. Entrepreneurship Today
70% of economic activity
Between 60% and 80% of new jobs
Driven by passion and purpose
U.S. standard of living (4 times better than former USSR) ascribed to entrepreneurship
Entrepreneurship - The Introduction

5. Entrepreneurship - The Introduction

6. Entrepreneurship - The Introduction

7. The Evolution of Entrepreneurship
Entrepreneur is derived from the French entreprendre, meaning “to undertake”.
No single definition of entrepreneur :
Small Business
Leadership Style

8. Who Are Entrepreneurs?
Entrepreneurs, driven by an intense commitment and determined perseverance, work very hard. They are optimists who see the cup as half full rather than half empty. They strive for integrity. They burn with the competitive desire to excel.

9. Common Characteristics Associated with Entrepreneurs
Commitment, Determination, and Perseverance
Drive to Achieve
Opportunity Orientation
Initiative and Responsibility
Persistent Problem Solving
Seeking Feedback
Internal Locus of Control
Tolerance for Ambiguity
Calculated Risk Taking
Integrity and Reliability
Tolerance for Failure
High Energy Level
Creativity and Innovativeness
Self-confidence and Optimism
Independence
Team Building

10. Defining The Concept
Recent research has defined corporate entrepreneurship as a process whereby an individual or a group of individuals, in association with an existing organization, creates a new organization or instigates renewal or innovation within the organization.

11. Entrepreneurial Orientation
Autonomy
Innovativeness
Proactiveness
Competitive aggressiveness
Risk-Taking
Autonomy
Two techniques often used to promote autonomy
Using skunkworks to foster entrepreneurial thinking
Designing organization structures that support independent action
Innovativeness
Two methods used to enhance competitive position through innovativeness
Fostering creativity and experimentation
Investing in new technology, R&D, and continuous improvement
Proactiveness
Two methods to promote acting proactively
Introducing new products or technological capabilities ahead of the competition
Continuously seeking out new product or service offerings
Competitive aggressiveness
Two ways competitively aggressive firms enhance their entrepreneurial position
Entering markets with drastically lower prices
Finding successful business models and copying them.
Risk taking
Three types of risks faced by organizations and their executives
Business risk taking
Financial risk taking
Personal risk taking
Two methods to strengthen competitive position through risk taking
Researching and assessing risk factors to minimize uncertainty
Using techniques that have worked in other domains

12. Entrepreneurial Orientation
Dimension Definition
Autonomy Independent action by an individual or team aimed at bringing forth a business concept or vision and carrying it through to completion.
Innovativeness A willingness to introduce novelty through experimentation and creative processes aimed at developing new products and services as well as new processes.
Proactiveness A forward-looking perspective characteristic of a marketplace leader that has the foresight to seize opportunities in anticipation of future demand.
Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp ; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp
Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation

13. Entrepreneurial Orientation
Dimension Definition
Competitive An intense effort to outperform industry rivals. It is characterized by a combative posture or an aggressive response aimed at improving position or overcoming a threat in a competitive marketplace.
aggressiveness
Risk taking Making decisions and taking action without certain knowledge of probable outcomes; some undertakings may also involve making substantial resource commitments in the process of venturing forward.
Source: J. G. Covin and D. P. Sleving, “A conceptual Model of Entrepreneurship As Firm Behavior,” Entrepreneurship Theory & Practice, Fall 1991, pp. 7-25; G. T. Lumpkin and G. G. Dess, “Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance,” Academy of Management Review 21, no. 1 (1996), pp ; D. Miller, “The Correlates of Entrepreneurship in Three Types of Firms,” Management Science 29 (1983), pp
Adapted from Exhibit 12.3 Dimensions of Entrepreneurial Orientation

14. Entrepreneurial Orientation
Risk Taking
Innovation
Pro-activeness

15. Managing Innovation
Innovation: using new knowledge to transform organizational processes or create commercially viable products and services
Some Companies, such as Apple, are always innovating popular products, while others are constantly struggling for their one great idea.
Innovation: using new knowledge to transform organizational processes or create commercially viable products and services
Latest technology
Results of experiments
Creative insights
Competitive information
There are “five disciplines” for creating what customers want
Identify important customer needs
Create solutions that fill those needs
Build innovation teams
Empower "innovation champions" who keep the effort on track
Align the entire enterprise around creating value for customers

16. Continuum of Radical and Incremental Innovations
Exhibit 12.1 Continuum of Radical and Incremental Innovations

17. Innovation Challenges
Seeds versus Weeds
Experience versus initiative
Internal versus external staffing
Building capabilities versus collaborating
Incremental versus preemptive launch
Internal versus external staffing
Innovation projects need competent staffs to succeed
People drawn from inside the firm
May have greater social capital
Know the organization’s culture and routines
May not be able to think outside the box
People drawn from outside the firm
Are costly to recruit, hire, train
May have difficulty building relationships
Building capabilities versus collaborating
Innovation projects often require building new sets of skills
Firms can seek help
Other departments
Partner with other companies that bring resources and experience
Partnerships
Create dependencies and inhibit internal skills development
Sharing benefits of innovation may create conflict
Incremental versus preemptive launch
Companies must manage the timing and scale of new innovation projects
Incremental launch
Less risky
Requires few resources
Serves as a market test
Can undermine the project’s credibility if too tentative
Large-scale launch
Requires more resources
Can effectively preempt a competitive response

18. Managing Innovation Firms need to regulate the pace of innovation
Incremental innovation (six months to two years)
Radical innovation (Typically 10 years or more)
Innovation often requires collaborating with others who possess complementary knowledge and skills
Innovation requires the knowledge of the market
Firms need to regulate the pace of innovation
Incremental innovation
May be six months to two years
May use a milestone approach driven by goals and deadlines
Radical innovation
Typically long term – 10 years or more
Often involves open-ended experimentation and time-consuming mistakes
Strict timelines unrealistic
Innovation often requires collaborating with others who possess complementary knowledge and skills
Partners can come from several sources
Other personnel within the department
Personnel within the firm but from another department
Partners outside the firm
Non-business sources, including research universities and the federal government

19. Market Knowledge needed for Innovation
Consumers
Competitors

20. Market Knowledge needed for Innovation
Consumers
Decide on your target consumers
Understand your target consumers
Common mistakes:
Knowing the size of the market does not mean you know your target consumers
Selecting a specific target segment does not mean you are going to reject consumers from other segments. On the other hand, providing services and products to consumers from different segments does not mean you are targeting on everybody.

21. Competitors The size of industry The number of competitors/substitutes
The competitive advantage for each competitors
What is your niche market?

22. The Age of Gazelles
A “gazelle” is a business establishment with at least 20% sales growth every year (for five years), starting with a base of at least $100,000.

23. Gazelles - Innovation
Gazelles are leaders in innovation.
Gazelles produce twice as many product innovations per employee as do larger firms.

24. Entrepreneurial Assessment Approach
Type of Venture
Qualitative, Quantitative, Strategic, and Ethical ASSESSMENTS
Type of Entrepreneur
Type of Environment
Do the Results of the Assessments Make Sense Given:
Stage of Entrepreneurial Career
Prior Experience and Education
Early Career
Mid Career
Late Career

25. 3M’s Innovation Rules Don’t kill a project Tolerate failure
Keep divisions small
Motivate the champions
Stay close to the customer
Share the wealth

26. “Corporate Entrepreneurship Assessment Instrument (measured key entrepreneurial climate factors)
Management Support
Autonomy/Work Discretion
Rewards/Reinforcement
Time Availability
Organizational Boundary

27. The Entrepreneurial Perspective
Although certainly not an exact science, this perspective provides an interesting look at the entrepreneurial potential within every individual.

28. ENTREPRENEUR MANAGER Figure 2
Interrelationship of Entrepreneurs and Managers - Modified
ENTREPRENEUR
MANAGER
Entrepreneurial Skills Required
Managerial Skills Required
Entrepreneurial and Managerial Skills Required
Open Systems Model
Rational Goal Model
Internal Process Model
Human Relations Model
Approximate
AGT need
Entrepreneur’s capability A B C D

29. Business Incubators
Business incubators are designed to “hatch” new businesses
Incubators provide some a number of resources to a new venture
Business incubators are designed to “hatch” new businesses
Incubators provide some or all of the following functions
Funding
Physical space
Business services
Monitoring
Networking

30. Business Networking Coaching/ Business Support Infrastructure
Time (Months) E M P H A S I
Growth
Cost Minimization
Infrastructure
Fortifying
Coaching/ Business Support

31. Dominant
Progression
Time (Months)
Growth
Cost Minimization
Infrastructure
Fortifying
Coaching/Business Support
Incubator as a Growth Tool
Incubator as a Subsidy Tool