Ch13 encouraging entrepreneurial innovation
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Ch13 encouraging entrepreneurial innovation
- 1. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns PART 4 CREATIVITY AND INNOVATION CHAPTER 13 Encouraging Entrepreneurial Innovation
- 2. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Schumpter’s Innovations • Introduction of a new or improved good • Introduction of a new process • Opening of a new market • Identification of a new source of supply of raw materials • Creation of new types of industrial organisation
- 3. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Product/Service and Process Development Product/Service Development New to the world New to the market New lines within company Additions to lines Improvements and revisions New applications Repositioning Cost reduction Process Development Major new process Minor new process Significant revisions Modest improvements
- 4. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Innovation and Competitive Advantage Increasing competitive advantage Frequency of Innovation Degree of Innovation HighLow High
- 5. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Barriers to Innovation • Regard new ideas with suspicion • Enforce cumbersome approval mechanisms • Pit departments & individuals against each other • Express criticism without praise • Treat problem identification as a sign of failure • Control everything carefully • Plan reorganisation in secret • Keep tight control over information • Delegate unpleasant duties to inferiors • Assume you know everything about the business
- 6. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Adaptor v Innovator • Is sensitive to group cohesion and cooperation • No need for consensus; often is insensitive to others Adaptor • Employs a disciplined, precise, methodical approach • Is concerned with solving, rather than finding, problems • Attempts to refine current practises • Tends to be means orientated • Is capable of extended detail work Innovator • Approaches task from unusual angles • Discovers problems and avenues of solutions • Questions basic assumptions related to current practices • Has little regard for means; is more interested in ends • Has little tolerance for routine work
- 7. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Ability to be CREATIVE Ability to spot OPPORTUNITIES INVENTION INNOVATION SUCCESS ENTREPRENEURIAL ENVIRONMENT Creativity, Invention, Opportunity and Entrepreneurship
- 8. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Invention and Entrepreneurship STRUGGLER COPIER INNOVATOR STAGNATOR Creativity / Invention Opportunity perception / Entrepreneurship High Low High
- 9. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Growth and Risk Increasing risk Newnessofmarket Same Totally new Newness of product Same Extended range Better coverage Related Incremental changes Totally new Increasing risk Twilight Zone
- 10. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Risk and the Process of Innovation Imitation DiscreteDramatically continuous Continuous Process of Innovation High Low Risk Twilight Zone No innovation
- 11. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Risk and Innovation Process Time Time to market High Low Risk Best time to launch
- 12. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Innovation and size • SMEs produce their fair share of innovations and do it more efficiently than large firms • Both small and large firms have advantages in producing different types of innovation – this has implications for structure • SMEs tend to innovate in sectors where resources (ie. capital) are less important • Innovation is not entirely related to firm size - it also relates to business activity, industry, nature of innovation and type of company
- 13. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Discontinuous Innovation • Unpredicted new markets • New business models • New technologies • New political rules • Market exhaustion • Sea-change in market sentiment or behaviour • Deregulation or shifts in regulatory regimes • Fracture along ‘fault lines’ causing ‘flips’ • Unthinkable events • Shifts in ‘techno-economic’ paradigm • Architectural innovations rewriting the ‘rules of the game’
- 14. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Innovation Networks Similar Organisations Radical innovation Incremental innovation Different Organisations Zone 2 • Strategic alliances • Sector consortia • New technology development consortia Zone 1 • Sector for a • Supply chain learning programmes Zone 4 • Multi-company innovation networks in complex product systems • New product/process Zone 3 • Regional clusters • Best practice clubs • Topic networks
- 15. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns From Information to Knowledge Information Learning Knowledge Decisions Actions Behaviours Feedback loops
- 16. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Commitment to Innovation From top management that innovation: • Is at the core of what the business does • Is everyone’s responsibility, not just the R&D Department • Happens in everything from product development to marketing
- 17. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Balancing the Portfolio • High-risk, high return and low-risk, low return innovations • Discrete, dynamic and continuous innovations • Product/service and market innovations • Short and long-to-market innovations • Innovations that employ new technologies and those that employ existing technologies
- 18. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns A Specimen Risk Portfolio Newnessofmarket Same Totally new Newness of product Same Extended range Better coverage Related Incremental changes Totally new Twilight Zone Increasing risk Increasingrisk A DEFG H C B
- 19. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Innovation and Marketing Strategy Degree of differentiation Low High Competitive emphasis placed on.. Innovation stimulated by.. Predominant type of innovation Product line Production process Cost reduction Pressure to reduce costs, improve quality Incremental product & process innovation Undifferentiated standard products Efficient, often capital intensive & rigid Product/service variation Functional product performance Opportunities created by external technical capability Information on user needs Major process innovations required by rising volume Frequent major changes in product/service Diverse often including custom designs Includes at least one stable or dominant design Flexible & inefficient Experiment & change frequently Becoming more rigid & defined
- 20. Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns Keys to Successful Innovation • Atmosphere and vision…..the right culture • Market responsiveness….opportunity driven • Small, flat organisations • Skunkworks • Multiple approaches • Interactive learning Quinn (1985)