MBAX 6100 Entrepreneurship & Small Business Management Frank Moyes
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Transcript MBAX 6100 Entrepreneurship & Small Business Management Frank Moyes
MBAX 6100
Entrepreneurship &
Small Business Management
Frank Moyes
Leeds College of Business
University of Colorado
Boulder, Colorado
Corporate Entrepreneurship II
Today’s Agenda
Corporate Entrepreneurship II – Creativity &
Innovation
Feasibility: Is this a good industry?
Case: Emerging Business Opportunities at IBM
Read
Bringing Silicon Valley Inside
Feasibility: M-4 Is This a Good Industry?
Entrepreneurship Interview
Corporate Entrepreneurship II
Next Week’s Schedule
Corporate Entrepreneurship III – You as an
Intrapreneur
Case: Lucent Technologies
Feasibility: Sustainable competitive advantage
Speaker: Aaron Kennedy of Noodles
How has Noodles been innovative?
What problems does Noodles face to be innovative in the
future?
What are your recommendations for Kennedy?
Corporate Entrepreneurship II
Is this a Good Industry?
Five forces – Michael Porter
Ease of entry
Supplier power
Buyer power
Threat of substitutes
Competitive rivalry
Define your industry broadly
Good industries are competitively forgiving
Corporate Entrepreneurship II
Corporate Entrepreneurship
Week 5 Obstacles to corporate entrepreneurship
Week 6 Innovation in corporations
Week 7 You as an Intrapreneur
Corporate Entrepreneurship II
Some Notes on Corporate
Entrepreneurship
Opportunity driven
Not a lack of ideas – execution is key
Experimentation
Iterative innovation process
Learning from failure
“A team with B plan”
Sharing risks & rewards
Corporate Entrepreneurship II
Some Notes on Corporate
Entrepreneurship II
Venture teams – self-directed, self-managing & high
performance
Support from top management
Forget, borrow, learn
Resource attraction
Do not use corporate services to save money; only
when it gives you a competitive advantage
Corporate Entrepreneurship II
What Are the Obstacles to Corporate
Entrepreneurship?
Systems
Organization Structure
Strategic directions
Policies & Procedures
People
Culture
Morris & Kuratko, Corporate Entrepreneurship
Corporate Entrepreneurship II
Systems Obstacles
Reward & evaluation systems
Oppressive Control systems
Inflexible budgeting systems
Arbitrary cost allocation systems
Rigid planning system
Corporate Entrepreneurship II
Systems Decisions
Reward systems
Division managers
Corporate entrepreneurship group
Intrapreneurs
Planning systems
Controls on capital
How provide sustained funding? How get patient
capital?
How avoid decisions that could sink the company?
Corporate Entrepreneurship II
Organizational Structure Obstacles
Too many hierarchical levels
Responsibility w/o authority
Top down mgmt
Restricted communication channels
Lack of accountability
Corporate Entrepreneurship II
Organizational Structure Decisions
Spin-off; separate from divisions; part of divisions
Who responsible top management? How handle
change at top?
Where locate?
How measure performance?
Drive existing divisions out of business?
Corporate Entrepreneurship II
Strategic Direction Obstacles
No innovation goals
No strategy for Entrepreneurship
No vision
Lack of commitment from senior execs
No Entrepreneur role models at top
Corporate Entrepreneurship II
Strategic Direction Decisions
Time frame for success
Focus is on short term results
Profit per share growth vs. higher P/E
Criteria for success
Innovation goal
How choose the ventures?
IBM: cross-IBM resource needs, maturity of their strategies
and business plans, potential market size, valued to be
added by corporate insight
Outside validation?
Corporate Entrepreneurship II
Policies & Procedures Obstacles
Long, complex approval cycles
Extensive documentation requirements
Unrealistic performance criteria
Corporate Entrepreneurship II
Policy & Procedures Decisions
Restrictions on hiring – number & compensation
Accounting systems
Reports – environmental, equal opportunity
Corporate Entrepreneurship II
People Obstacles
Fear of failure
Resistance to change
Turf protection
Short-term orientation
Inappropriate skills/talents
Corporate Entrepreneurship II
People Decisions
Hire entrepreneurs from outside?
How train intrapreneurs to provide skills?
Assign experienced leaders or train young people?
What skills are needed – traditional entrepreneurial or
ability to navigate the organization, secure cooperation
or support
How handle turf protection?
15% rule
Corporate Entrepreneurship II
Culture Obstacles
Ill-defined values
No consensus on priorities
Values that conflict with Entrepreneur's approach
(innovation, calculated risk taking, pro-activeness)
Definition of success: promotion every 3 years, corner
office, corporate kite
Entrepreneurial ventures attract mavericks & risk takers
Corporate Entrepreneurship II
Culture Decisions
How to not trigger the corporate immune system?
How deal with failure?
Corporate Entrepreneurship II
Corporate Entrepreneurship II
Why Is It So Hard to Predict the Future?
"I think there is a world market for maybe five computers.
Thomas Watson, chairman of IBM, 1943
"This 'telephone' has too many shortcomings to be
seriously considered as a means of communication. The
device is inherently of no value to us." Western Union
internal memo, 1876.
Corporate Entrepreneurship II
Why Is It So Hard to Predict the Future?
"The concept is interesting and well-formed, but in order
to earn better than a 'C,' the idea must be feasible."
"Heavier-than-air flying machines are impossible."
Lord Kelvin, president, Royal Society, 1895.
Corporate Entrepreneurship II
Why Is It So Hard to Predict the Future?
"So we went to Atari and said, 'Hey, we've got this
amazing thing, even built with some of your parts,
and what do you think about funding us? Or, we'll
give it to you. We just want to do it. Pay our salary,
we'll come work for you.' And they said, 'No.' So,
then, we went to Hewlett-Packard, and they said,
'Hey, we don't need you. You haven't got through
college yet.”
Corporate Entrepreneurship II
Develop Corporate Innovation Strategy
Morris & Kuratko: Obstacles
“Building Breakthrough Businesses” – Forget, Borrow,
Learn
“Bringing Silicon Valley Inside” – resource attraction
IBM case – EBO’s
Corporate Entrepreneurship II