Presentación Carlos Baradello

1. Corporate Entrepreneurship:
Fundamentals
Carlos S. Baradello, PhD
Associate Dean
Corporate & International Programs
School of Business & Management

2. Corporate Entrepreneurship
Corporate Entrepreneurship:
Creating a Company within a Company
AGENDA
– Introduction to Corporate Entrepreneurship (CE)
– Globalizationn: opportunties and risks.
– CE Vocabulary
– Project Definition
– CE Models
– Project Evaluation
– Integration of Concepts
– Concluding Remarks
g

3. Corporate Entrepreneurship
Corporate E t
C t Entrepreneurship (CE):
hi (CE)
Creating a Company within a Company
THEMES
Theme #1: The impact of Globalization
over the corporation
h i
Theme #2: CE Fundamentals
Theme #3: Creating a Process for CE
Theme #4: CE Project Templates
Theme #5: Models of CE
Theme #6:
Th #6 Integrating all Concepts
I t ti ll C t

4. Corporate Entrepreneurship
THEME #1
The I
Th Impact of
t f
Globalization
over the
Corporation

5. PROFESSIONAL AREAS
Corporate Entrepreneurship OF INTEREST
Global Paradigm Shifts
Innovation
Flat Digital &
Society Entrepreneurship
Invisible
Markets
3

6. NetworkingEntrepreneurship
Corporate : Ecosystem IS KEY in Value Creation

7. Olas de innovación
Corporate Entrepreneurship tecnológica
Evolución de Silicon Valley
1950 – 20xx? BioTech
GreenTech
Re. Energy
Water, etc.
=> Outsource SWR & SVC
=> Outsource PCB’s
=> Outsource Metal/Mechanical
1950 1960 1970 1980 1990 2000 2010
7

8. Corporate Entrepreneurship
Global Growth will not be uniform:
Market shifts are coming and will affect most economies
(Country GDP Rank in Billions of Real (2003) U.S. Dollars)
2000 2010 2020 2030 2040 2050
U.S. U.S. U.S. U.S. U.S. China
Japan Japan China China China U.S.
Germany Germany Japan Japan India India
U.K. U.K. Germany India Japan Japan
France China U.K. Russia Russia Brazil
Italy France India U.K. Brazil Russia
China Italy France Germany U.K. U.K.
Brazil India Russia France Germany Germany
India Russia Italy Brazil France France
Russia Brazil Brazil y
Italy Italy
y Italy
y
Source: Global Insight World Service and Goldman Sachs

9. Corporate Entrepreneurship
Tecnology + Innovation + Sucess $$$

10. Corporate Entrepreneurship
Globalization imperatives
Opportunities: Threats/Risks:
• Global markets • New competitors
• Global supply chain • Interdependencies
• Idea circulation • New P/S in your local
• New partnerships
N t hi market
• Access to new technology • Speed/Acceleration
and talent • New personal/
• Accelerated growth professional requirements
• Personal Development • Increase pressure for
talent

11. Corporate Entrepreneurship
Perspectives on the Nature of Entrepreneurship(1)
p p p
Wealth Entrepreneurship involves assuming the risks associated with
the facilitation of production in exchange for profit.
Creation
Enterprise Entrepreneurship entails the founding of a new business
venture where non existed before.
Creation
Innovation Entrepreneurship is concerned with unique combinations of
resources that make existing methods or products obsolete.
Creation
Change Entrepreneurship involves creating change by adjusting, adapting,
and modifying one’s personal repertoire, approaches, and skills to
Creation meet different /
t diff t /new opportunities available i th environment.
t iti il bl in the i t
Employment Entrepreneurship is concerned with employing, managing, and
developing the factors of production, including the labor force.
Creation
Value Entrepreneurship is a process of creating value for customers
by exploiting untapped/unseen opportunities.
Creation
Growth Entrepreneurship is defined as a strong and positive
orientation towards growth in sales, income, assets, and
Creation
employment.
(1) Entrepreneurial Intensity, Michael H. Morris

12. Corporate Entrepreneurship
THEME #2
CE
Fundamentals
F d t l

13. Corporate Entrepreneurship
Environmental Turbulence Creates a Need for
new Management Practices(1)
Customers Technology
• Fragmented markets Firms required to change how they operate
• Increasing customer expectations lead to internally and compete externally d t
i t ll d t t ll due to:
customize (products, customer support &
• New Information management
communication) vs. standardization.
• New production and svc. delivery tech.
• Higher cost of customization lead to
• New customer management tech.
cultivate long-term customer relationships
• New logistics and inventory mangt. tech.
• Sustainable growth require learning new
• New sales f
N l force management t ht tech.
skills in serving global markets
• New product development tech.
The Embattled
Corporation
Legal, Regulatory, and Ethical Standards
Competitors
• Increased accountability, visibility and
• Competitors lead customers to new markets
transparency to multiple stakeholders.
increased expenditures in product develpmt.
• Increased litigious environment raises the
• Hard to differentiate, competitors
stakes on product liability, increase costs
aggressively/ quickly mimicking new prod/svc
and restrain innovation.
• Increased competition with companies in
• Regulatory restrictions limit choices while
other industries forcing to change rules or
force firms to learn new ways to compete
even the game!
• Society holding firms more responsible for
• Competitors specializing in narrow, profitable
the environmental and social implications
niches avoid costs of competing across a
of their actions
broader product and customer range, while
attacking most profitable areas of business
(1)Corporate Entrepreneurship and Innovation, Michael H. Morris, PhD., Donald F. Kuratko, PhD., Jeffrey G. Covin, PhD.

14. Corporate Entrepreneurship
Corporate Entrepreneurship: WHY?
Renew y Regenerate the Corporation
New Revenues &
Personal
Profits
Professional Increased Portfolio of
Growth P/S & markets
k
Increased competitiveness, sophistication,
I d titi hi ti ti
able to “average-out the local turmoil's”

15. Corporate Entrepreneurship
Disruptive Technologies…
…Disrupt Global Markets
Customers/Markets
DISRUPTIVE INNOVATIONS
 Present new risks and require
TRADITIONAL Earns the
new approaches to doing
business
Emerging right to
 Different customer needs,
Bus. Development lower ability to pay and
compete!
requires a complete solution
i
Speed of execution
l t l ti
Deadly
MATURE STATE
• Focus on large & dominant
embrace with
markets/customers
Sustaining
established
• Meet growth goals in the MIGRATION
short term
customers &
• Market behavior well PATH
understood
technologies
g
Sustaining Disruptive Products/Technology
Adapted from: “The Innovators Dilemma”, Clayton M. Christensen, HBS Press.

16. Corporate Entrepreneurship
VALUE CREATION MIGRATION
Va
Virtual
alue
Service
Provider
Solution Service
Layer
Standa
Application / Services Layer
Domain Information
ardizing
Web Portal – Information Utility
Subscriber Equipment / Basic Services
g
Infrastructure Equipment
16

17. Corporate Entrepreneurship
Corporate E t
C t Entrepreneurship:
hi
Creating a Company within a Company
Markets/
Customers
New
Markets NEW
NEW
BUSINESS
VENTURES
Market
Extensions
ESTABLISHED
Existing CORPORATION
CURRENT
Market(s) BUSINESS
Existing
E i ti Product(s)
P d t( ) New
N Prod./
Prod /
Product(s) Extensions Product(s) Tech’s

18. Corporate Entrepreneurship
Corporate Entrepreneurship: NEW BUSINESSES
New Business New Learnings
New Risk
Risk Opportunity of Failure
Failure New Learnings

19. Corporate Entrepreneurship
Corporate Entrepreneurship:
Virtuos Cycle
New
Revenue
Profits
f Learning’s
L i ’ Risk
Learning’s
Failure
Success

20. Corporate Entrepreneurship
Corporate Entrepreneurship: Promises
p p p
• Renew & Regenerate
– New Technologies
– New Markets
– Process Re-engineering
– New Value Creation/Extraction
– New organizational models
• Re-energize/Promote Corporative Culture Change
– Dynamism & Speed
– Promote taking measured risks
– Personnel challenged by new opportunities/risk
P l h ll db t iti / i k
• Consistent Risk Management:
– Increase success probability
– Increased opportunities (breadth, scope, quality,
(breadth scope quality
quantity)
– Able to stop earlier
• Creation of Corporate Memory:
p y
– Keep track of the first or second try
– Lessons learned

21. Corporate Entrepreneurship
Established Firms a e u de Pressure…
stab s ed s are under essu e
Their old paradigm is breaking down…
• Bigger creation of stockholder value,
• Faster creation of stockholder value,
• Faster ability to respond to market changes,
• Faster ability to embrace new technologies and
y g
paradigm changes,
• Increase their readiness to “tolerate risk”
• Increase their readiness to “innovate” or
innovate
“integrate innovations” => network Innovation
• Customer-centric innovation
• Increase ability to “fail wisely
fail wisely”
• “…Stay hungry, stay foolish...” quote from Steve
Jobs

22. Corporate Entrepreneurship
Traditional Management
vs.
vs
Entrepreneurial Management
Encourages control Encourages Opportunity seeking
Encourages discipline Encourages innovation
Encourages conformity & efficiency Encourages vision & drive
Encourages training Encourages learning
Encourages uniformity Encourages questioning stat-quo
Encourages effectiveness/contract
E ff ti / t t Encourages building relationship
E b ildi l ti hi
relationships only within & outside the organization
Encourages long-term planning with Encourages strategic thinking at
functional knowledge all levels cooperation and rapid
levels,
knowledge transfer.
Encourages to create certainty and Tolerates uncertainty and
clarify ambiguity. Risk avoidance. ambiguity. Promotes risk taking
Discourages failure. and embraces changes

23. Corporate Entrepreneurship
Large Corporations Prospered…
Prospered
…in a Closed Innovation environment

24. Corporate Entrepreneurship
Corporations are moving to…
…an Open Innovation Model

25. Corporate Entrepreneurship
Some ventures are better-off…
better off…
…outside the corporation
The corporation becomes/creates an “Ecosystem”

26. Corporate Entrepreneurship
Closed vs. Open Innovation
Other fi
Oth firm´s
Market
Our New
License,
Market
M k t
Spin-out,
Divestiture
Internal Technology Base
Internal/External Our Current
Venture Handling Market
External Technology
External Technology Base Insourcing
Stolen with pride from Prof Henry Chesbrough UC Berkeley, Open Innovation: Renewing Growth from
Industrial R&D, 10th Annual Innovation Convergence, Minneapolis Sept 27, 2004

27. Corporate Entrepreneurship
THEME #3
Creating a
C ti
Process for
P f
CE

28. Corporate Entrepreneurship
Corporate Entrepreneurship
Speed -- Value Creation -- Renewal -- Transformation
p
• The creation of new business units by an
established f
firm,
• The development and implementation of
entrepreneurial strategic thrusts,
p g ,
• Promotion/emergence of new ideas from
anywhere:
 up/down the hierarchy
 all functions/sectors
 up/down the supply chain

29. Corporate Entrepreneurship
Corporate Entrepreneurship
Governance -- P
G Proactive -- I /E t
ti In/External -- I /F
l In/Formal
l
• Corporate Venturing: speed of execution for the
formation of new ventures/strategic investments
f ti f t / t t i i t t
• Intrapreneurship: individual empowerment, take
initiative, speeding tickets “are OK” and risk taking culture
• Bring the Market Inside: connected to trends via
multiple stakeholders: suppliers, customers, regulators,
academics, investment bankers, other industries, etc….
, , ,
• Entrepreneurial Transformation: institutionalize
permanent adaptability, renewal at increasing speed, risk/
rewards profile, tolerance to failure -- corporate DNA
profile

30. Corporate Entrepreneurship
Corporate Entrepreneurship
Communicate -- Sell -- Review -- Fund
• Elevator Pitches
• Business Planning Process
• Poster Sessions and One-Pagers
• Business Pitches
• Product/Service/Process Demos
Establish Credibility -- Passion --
Clarity of Thoughts -- Mastery of Complexity
THE RIGHT OPPORTUNITY BY THE RIGHT TEAM!

31. Corporate Entrepreneurship
If you want t h
t to have b
buyers…
You need to be selling…
 Elevator Pitch & One-Pager
 Project Plan
 Business Pitch Presentations
 Demonstrations/Proof-of-Concept
C t
Customer T ti
Testimonials
i l

32. Corporate Entrepreneurship
Disciplined Incremental Phased Review
New Venture Incubation/Acceleration Process
Opportunity Business
Opportunity Evaluation
Exploration Qualification Plan
“Deployment,
Launch & Execution”
Phase 0 Phase I Phase II Phase III
• Hig Growth Markets
eds
M
digenous Nee
•Customer
CHAMPIONING
•Locations •Site Survey
•Buildings •Demographic •Bus. Validation • Execution
plicable
•Managers •Gets/Gives •Contract Team
gh
• Rep
• Ind
White Project Business
Paper Proposal Plan
Shelve/
Learning
Refinement & Framing

33. DIPR: FUNNELS DOWN THE
Corporate Entrepreneurship
BUSINESS OPPORTUNITIES
Market/Technology
Trends  Enables a disciplined process to
screen business opportunities,
 Establish a common framework to
manage risks,
 Maximize the efficiency (risk, cost
and time) of the New Venture
)
Exploration,
 Capture the learning to avoid
repeating the same mistake,
 Defines a corporate culture
f l
Business Deployment, (i.e. “HP way”) or approach to
Launch & Execution profitable growth.