The Power of Entrepreneurship in Enterprise
Just last week I wrote about the potential emergence of the Chief Corporate Entrepreneur, a role that would take command of product and business model exploration, as well as wider innovation within an enterprise setting.
This was sparked by Alexander Osterwalder’s identification of the need for a role of this type and was discussed in some depth during a recent CxO Talk. So unfortunately I cannot lay claim to the role title and description.
Having said that, I wanted to delve a little deeper into the broader role entrepreneurship can and should play within an enterprise setting.
A role that many of us are quite familiar with is the Entrepreneur in Residence (EIR). What the EIR is and actually does is completely dependent on the context of the organisation they reside in and as such, can vary drastically.
Sten Tamkivi wrote about this on the Andreessen Horowitz blog, appropriately titling his post, So… what does an EIR actually do? The post is well worth a read.
We’ve seen the EIR role in the Venture Capital and Educational sectors for quite some time, but the emergence of the EIR within a corporate setting is becoming more and more common, and for good reason.
Corporations, or enterprise, are typically driven by the effective and scalable execution of a known business model. This known business model and its numerous components are continually optimised to extract the maximum profit from a given set of value propositions, which consists of the products or services they sell.
These products or services exist within a highly competitive marketplace, and therefore the need to extract maximum value from them becomes priority number one.
But, the past decade has seen half of the Fortune 500 replaced by emergent technology incumbents. Things are changing and the urgency to adapt is increasing.
In fact, urgency is one of the primary differentiators between the way a startup and large enterprise innovates. (Steve Blank wrote about this extensively here.)
This urgency drives innovation velocity and innovation velocity is a core component of entrepreneurship.
This is one of the primary reasons entrepreneurship will become a significantly more common and highly valued role within an enterprise setting.
Imagination, creativity, innovation and entrepreneurship form what’s been dubbed the Inventure Cycle. The first three are pre-requisites of entrepreneurship and all are required to build new and uniquely useful value propositions and surrounding business models.
The role of entrepreneurship will not replace business model execution, it is not meant to. It will however compliment it by providing an ecosystem of internal innovation opportunity, led by the Chief Corporate Entrepreneur, and explored at scale and speed by a variety of strategically chosen and capable entrepreneurs.
These internal entrepreneurs will play the same role they currently play from their dorm room, from their garage or from their lavish Silicon Valley office. They exist to do new and exciting things, and can do so within an enterprise setting.
Entrepreneurs view the world differently. Entrepreneurs work differently. Entrepreneurs navigate new and unchartered territory with vigour. They have the ability to shatter potential barriers and at times achieve things not previously thought possible.
Entrepreneurs also understand that with exploration, temporary failure is certain.
Within the context of business model execution, failure is not acceptable, even if it provides a learning opportunity.
Within the context of business model exploration, although far from ideal, temporary failure can in fact be extremely productive. It can provide new insights and assist us in ultimately delivering the most desirable value propositions to our intended, or even new customer segments.
The two primary reasons why entrepreneurship will becomes a pivotal role in enterprise over the coming years:
1. Innovation velocity
2. Tolerance of temporary failure
Enterprise must maintain its ability to execute and optimise current business models; this is a reality that will not go away any time soon. But in the 21st century, enterprise must also explore and realise, new, potentially disruptive business models.
Both key activities must operate side-by-side. They require different skills, capabilities and processes.
The latter, the focus on innovation, the focus on new business models and new value propositions is the stage on which internal entrepreneurship will thrive.