There’s no denying that all companies across the world strive for organic growth. However, only a few businesses have a framework and entrepreneurial strategy to support and maintain growth over the years. This is where the concept of corporate entrepreneurship comes in. Not only does it promote innovation; it also creates a structure toward business success.
If you want to know more about corporate entrepreneurship, you’re on the right page. In this article, we’ll get to know more about its importance, types, and the advantages and disadvantages. We’ll also share tips on how to become a corporate entrepreneur. Read on.
What is Corporate Entrepreneurship?
Also known as intrapreneurship, corporate entrepreneurship is an approach used to develop new business opportunities, products, or services within an organization. This process seeks to create value, drive revenue growth, and encourage innovation inside the company through entrepreneurial thoughts and actions.
Corporate entrepreneurship also plays an integral role in motivating entrepreneurs. How? It helps them to make wise business decisions, implement necessary actions, and lead the company to achieve its targets. Moreover, it fosters an environment where projects are led and developed by employees, rather than being forced by top management.
The Importance of Corporate Entrepreneurship
Establishing environments that promote innovation might be challenging to some businesses, especially large corporations. This is due to their organizational bureaucracies, structures, and cultures, among others. Having that said, implementing corporate entrepreneurship allows companies to have a systematic method to innovate that could lead to significant benefits.
Below are some of the reasons intrapreneurship is important:
1. Drives Revenue and Organizational Growth
Successful execution of this approach drives businesses to generate innovative ideas, develop new products and services, and identify new market opportunities. These, in turn, can help increase revenue and attain company growth.
2. Boosts Employee Morale and Productivity
Since intrapreneurship lets employees lead the projects, it gives them the chance to get engaged in a number of new opportunities and showcase their skills. This boosts their confidence and improves their productivity.
3. Increases Employee Recruitment and Retention
Because employees are involved, they will feel valued, trusted, and motivated. As a result, staff turnover rates decrease. Furthermore, opportunities that lie in this approach can attract talented, entrepreneurial-minded staff.
Four Major Types of Corporate Entrepreneurship
If you’re going to explore corporate entrepreneurship, it’s crucial that you familiarize and understand its major types to help you succeed in this field. Here they are below.
1. Corporate Venturing
This refers to the development of a new business within established companies that zeroes in on a new product or market opportunity. With the aim of penetrating new markets with new or existing products, corporate venturing also focuses on launching new products in existing markets. Its goal is to drive new revenue and create value for companies’ shareholders.
Intrapreneuring can be considered an activity or exercise entrepreneurs use for the business to achieve innovation. In addition, it allows employees to work as intrapreneurs to determine new business opportunities.
3. Organizational Transformation
Commonly known as organizational renewal, it is a version of a complete business that modifies the primary pattern toward improved and sustainable economic performance. Its goal is to streamline the company’s performance. Some examples of organizational transformation include cost reduction, downsizing, and delayering.
4. Industry Rule Bending
It’s a type of transformation that revises industry rules in which the organization is involved to identify and create new opportunities. Coined as frame-breaking change, this aims to transform not only the enterprise but also the industry.
Pros and Cons of Corporate Entrepreneurship
Although it’s important to practice intrapreneurship, it’s also necessary to understand its advantages and disadvantages:
- Availability of resources: Corporate entrepreneurs can take one step ahead of the others and get access to different resources, including finances, established sales force, brand, distribution channels, and customer base.
- Easy-to-set-up business: Most intrapreneurs are knowledgeable of the business’s technical aspects and setup process.
- Professional connections: A large network of corporate entrepreneurs can assist them in developing new business ideas.
- Long approval cycles: It’s crucial to understand that intrapreneurs can’t come up with a decision without getting the company’s approval first.
- Limited financial rewards: Corporate entrepreneurs receive limited rewards from the company, which might be one of the reasons that affect company morale.
- Hinder ability to maneuver: Organizational structures, rules, and procedures are some of the driving forces that hinder a corporate entrepreneur’s ability to maneuver through the company.
Examples of Corporate Entrepreneurship
Of course, there are a number of renowned companies that have proven how corporate entrepreneurship has played a key role in their business’ success. These include the following:
Google has bolstered its operations by making innovation a day-to-day process, instead of utilizing it as a strategy. Since its founding, Google has been relying on its employees to promote and boost an innovation culture. This led to the transformation of the business, underscored by its acquisition of more than 180 companies in the last 20 years.
Founded in 1902, 3M has established its reputation as a powerhouse of innovation. This is because they have developed more than 60,000 products in their portfolio, ranging from the products used in medical equipment to the automobile industry. Due to the culture of innovation and corporate entrepreneurship, they were able to make product improvements and position new products to the market.
Back in 2004, P&G sought to produce innovative and disruptive ideas necessary to achieve growth and success in the market by creating a ‘new growth factory.’ Through this, P&G doubled its profits from their household care product, Tide, from $12 billion to $24 billion in 10 years. The driving forces? They promoted an entrepreneurial mindset in the senior management and product team members, and developed new-growth business guides and organizational structures.
How to Become a Corporate Entrepreneur
Now that you know the basics of corporate entrepreneurship, are you already inspired to become an intrapreneur? If so, here are some tips to heed to embark on this challenging-yet-rewarding career.
1. Take corporate entrepreneurship courses.
The first step to pursuing a career as a corporate entrepreneur is to gain knowledge about the industry. Familiarize yourself with its principles, processes, and characteristics by taking up intrapreneurship courses. Some of these include business modeling and strategy, entrepreneurship and new ventures, innovation management, product development, and venture capital.
2. Get a degree in entrepreneurship.
While it is true that becoming an intrapreneur doesn’t require any degree, it’s still worth noting that a degree in entrepreneurship significantly contributes to the success in the industry. Thus, getting an entrepreneurship degree will help you not only obtain knowledge about it, but also apply your skills and acquire hands-on experience.
3. Go for it.
In every professional pursuit, challenges and difficulties are inevitable. Hence, you should expect and get ready to overcome them as you carve your path toward corporate entrepreneurship. Be equipped with the qualities of an entrepreneur. And if the thought of quitting comes into your mind, go back to the primary reason you want to become one.
The Importance of Creativity and Technology in Corporate Entrepreneurship
In today’s business world, creativity and technology are some of the most important factors that business owners and entrepreneurs must invest in. Aside from identifying and resolving business-related problems in a quick yet creative manner, these two also work hand-in-hand to formulate innovative strategies and valuable ideas to achieve success in this highly competitive field.
In addition, creativity and technology help employees challenge and enhance their way of thinking and discover new business opportunities. Accordingly, employee engagement and retention rate both increase. Plus, applying these approaches can add value to businesses and gain an edge among other competitors.
Kick-Start Your Dream to Becoming a Corporate Entrepreneur with CIIT Philippines!
As mentioned, it’s highly recommended to earn an entrepreneurship degree if you’re planning to pursue a career in corporate entrepreneurship. This will help you keep abreast of the latest industry trends, processes, and best practices as well as get exposure in the field.
With CIIT’s Bachelor of Science in Entrepreneurship program, you’ll obtain knowledge not only of the usual business concepts and models, but also of technology platforms and business-level tools that are keys to business success. Enroll yourself now and be a corporate entrepreneur of the future!