How entrepreneurial thinking can accelerate growth in large corporations
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How entrepreneurial thinking can accelerate growth in large corporations

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How entrepreneurial thinking can accelerate growth in large corporations

How entrepreneurial thinking can accelerate growth in large corporations

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How entrepreneurial thinking can accelerate growth in large corporations How entrepreneurial thinking can accelerate growth in large corporations Presentation Transcript

  • How entrepreneurial thinking can accelerate growth in large corporations
  • 1. Growth Framework2. Dynamic forces driving a company growth3. Entrepreneurial strategy making4. Final Lesson
  • Pros ConsBusiness model advantages Business model challengesPromote business development Business execution & renewalBuild credibility Human & other resources constraintsHuman talent development Management challengesFinancial value creation and financing Funding challenges/dilution
  • Growth accelerators and inhibitors 1. Top management 9. Marketing/branding 2. Human resources/culture 10. Sales/distribution 3. Strategy 11. Partnership 4. Company financing 12. Capital markets 5. R&D / new product 13. Acquisitions/mergers 6. Product/after sales 14. Regulatory/government/taxation 7. Operations management 15. Economic/corporate environment 8. Customer/market opportunity 16. Legal/lawsuits
  • 2. Dynamic forces driving a company growth
  • Introduction A company is an ecology in which strategic initiatives arise following a certain pattern. Knowing how strategy originates and how strategy making takes place is crucial for the company to control its destiny. Strategy making depends on two variables: decision making power concentration and simultaneity of strategic action. Strategic initiatives within the company compete for limited resources. Every company has its own cultural and administrative mechanisms to decide what initiatives are supported and how resources and attention are assigned amongst them.
  • Robert Burgelman’s Rubber band Model Basis of competitive advantage In the industry Competition at the company’s position in the industry as a result of external forces (Porter + analysis) Official Corporate Strategy Internal selection Strategic action Beliefs on market domain and context What the company does The the relative importance of the Reestablishes alignment consequential action in which competencies to achieve a in both axis when it is altered the company engages. It links competitive advantage. position and competencies Values and principles of what we will do and what will not Distinctive competencies Skills, assets and routines to meet the basis if competitive advantage in the industry
  • Misalignment 1 Basis of competitive advantage In the industry What it takes to win Official Corporate Strategy What we say Internal selection context Culture Strategic action What the company does Distinctive competencies What we’ve got
  • Misalignment 2 Basis of competitive advantage In the industry What it takes to win Official Corporate Internal selection Strategic action Strategy context What we say What the company does Culture Distinctive competencies What we’ve got
  • Strategic Dissonance Revenue Growth Dissonance Time
  • Sources of Strategic Dissonance Dissonance is Strategic if: - There is a divergence between Basis of Competitive Advantage and Distinctive Competence. - There is a divergence between Official Corporate Strategy and Strategic Action. Initially the signals are usually weak so our job as leaders is to discern signals from noise
  • 3. Entrepreneurial strategy making
  • Strategy Processes Induced Autonomous Emerging External Environment Autonomous Strategic strategic action. Context O cial Known Corporate environment Strategy Induced Structural Strategic Action Context
  • DefinitionsKnown environment: This is where the induced strategic process takes place. Threats and opportunities ariseform here, forcing the company to adjust the induced strategy process.Emerging external environments: Unfamiliar, unknown environments where the autonomous strategy processtakes place. Many of them do not survive but others may grow and complement or even substitute thefamiliar environment.Official Corporate Strategy: Beliefs on what the company does well, in what markets it can succeed, what areits values and what goals it aims to achieve.Induced Strategic Action: Initiatives on the part of operational and middle level managers that fit the conceptof the official corporate strategy. Is oriented toward gaining and maintaining leadership in the company’s corebusinesses.Autonomus strategic action: Strategic initiatives outside the scope of the official corporate strategy. Theydiffer from the induced ones in the technology they use, the value proposition or the target clients. They relyon new competencies or in a new combination of the existing ones. They lead to new businesses that aredifferent from the core business, complementing or even substituting it.Structural Context: Administrative and cultural mechanisms to keep coherence between the official corporatestrategy and the induced strategic action. The larger the company the more complex they are. Transforms“concept” into “action.Strategic Context: Administrative and cultural mechanisms to evaluate and choose strategic initiativesoutside the structural context. Transforms “action” into “context”.. It allows to assess the adaptive potentialof the autonomous strategic action to the official corporate strategy (which will change upon this incorporation).
  • Conclusion The autonomous strategy process begins with strategic initiatives that often emerge fortuitously and unexpectedly. Initially there is no clarity about their strategic importance and how they may relate to the induced strategy process. Solving this indetermination is the most important challenge for company evolution. Hence why the design of the strategic context is crucial.
  • 4. Final Lesson
  • Two systems one company Internal selection context Strategic Structural Context Context .
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