To trounce rivals, your company must innovate. But most new ventures set up by established businesses fail. Why? Companies adopt one of two extreme approaches to corporate entrepreneurship— each of which has flaws. Some firms house new ventures in isolated divisions. When these firms later try to integrate fledgling enterprises with the mainstream, power struggles erupt between innovation leaders and division executives. Other companies charge all managers with nurturing innovative ideas. But preoccupied with their existing businesses, managers neglect new projects they consider diversions.
For large companies, creating new businesses is the challenge of the day. After years of downsizing and cost cutting, corporations have realized that they can’t shrink their way to success. They’ve also found that they can’t grow rapidly by tweaking existing offerings, taking over rivals, or moving into developing countries.
Because of maturing technologies and aging product portfolios, a new imperative is clear: Companies must create, develop, and sustain innovative new businesses. They must become Janus-like, looking in two directions at once, with one face focused on the old and the other seeking out the new. Corporate entrepreneurship is, however, a risky proposition. New ventures set up by existing companies face innumerable barriers, and research shows that most of them fail. Emerging businesses seldom mesh smoothly with well-established systems, processes, and cultures. Yet success requires a blend of old and new organizational traits, a subtle mix of characteristics achieved through what we call balancing acts. Unless companies keep those opposing forces in equilibrium, emerging businesses will flounder.
Studies show that efforts to stimulate intrapreneurship — entrepreneurship within an established company — more often than not. fall flat. According to current research at Harvard on innovation models in global companies across diverse sectors, these types of projects fail between 70% and 90% of the time. Internal innovation presents a number of challenges, including but not limited to the inherent risk of promoting new ideas; complacency and attachment to the status quo; and the actual amount of capable people with the time to effectively build new ideas into workable products. When innovation is at the center of a company’s way of doing things, it finds ways to innovate not just in products, but also in functions, logistics, business models, and processes.
Padup Ventures is a Knowledge Provider that has developed a Incubation cum acceleration program for "Disruptive & Innovative” Start-ups. Padup’s vision is to be a key player in the start up eco-system by actively supporting young people at various stages in their entrepreneurial journey and significantly impact survival rates positively, thus creating huge impact in the entrepreneurial space.
It makes sense for more and more large companies to outsource their entrepreneurial efforts. They are engaging knowledge firms (such as PadUp Ventures) that conduct in-depth need-finding, identify new opportunities, generate promising ideas, and develop ideas into working prototypes. The client company then refines these concepts and prototypes and takes them to market.
These knowledge firms tend to have a preferred customized methodology for working with their clients, such as user centric approach, Lean Start-up or data driven analytical models to build innovative solutions to emerging or futuristic problems. Results from these business-to-business collaborations have at times been phenomenally successful as one can observe in case of many corporate incubators.
Developing methods to facilitate “open innovation” through an incubator/accelerator takes advantage of the fact that companies which adapt “open innovation” can be better off since they cannot always out-think their smaller, nimbler competitors. Those small companies, however, do not have the resource might of the big-boys. Thus, large companies supporting small company’s innovations with desired resources like seed funding, market access, being first customer and later the distribution channel and last but not least, by helping the entrepreneurs to shift gears to causal thinking from effectual thinking at the right time– or sometimes buying the entire small company – can often be a win-win scenario for both firms.
It also means looking at true entrepreneurs, to give them the autonomy but still have them connected to the Corporation. The equitization and the autonomy are the biggest factors. Because the thing that actually unlocks human potential is when people feel they have control over their own destiny and they can make a fortune if they really succeed on their wild bet.