The Comprehensive Guide to Corporate Entrepreneurship Types
All companies want organic growth, but many struggle to find an entrepreneurial strategy to make that happen. The reason being is the administration isn’t sure what kind of framework is needed to support the innovation they are striving for.
To iterate other articles we’ve shared, corporate entrepreneurship is the process used to develop new businesses, products, or services within an existing organization—your organization—to create value and generate growth. In short, it sets the groundwork for innovation by motivating and engaging your organization into the entrepreneurial mindset.
There are currently 582 million successful entrepreneurs in the world. You want your organization to be a part of that group, and there is no obstacle you can’t overcome to achieve that if you have the right strategies in place.
But did you know there are multiple corporate entrepreneurship types? What about the four models? While corporate entrepreneurship types are the different paths you can take as an entrepreneur, the four models provide the structure of building your business within your organization. Luckily for you, we made this guide to tell you all about them and help you determine which type suits you best.
Corporate Entrepreneurship Types: Which One Is Right for You?
From the outset, it's essential to decide what kind of entrepreneur you want to be. It will guide how you lay out your objectives and goals for your organization's future, but what works for others might not necessarily work for you. Here we’ve compiled a list of five different corporate entrepreneur types to get you started on the right foot and guide you when asking the question, “What kind of entrepreneurship program is right for my company?”
1. Internal Entrepreneurship (Intrapreneur)
An internal entrepreneur, commonly known as an intrapreneur, is defined as "a person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation." You essentially act as an entrepreneur, but without leaving your company to start a new one.
If you’re an intrapreneur, you are:
- A risk-taker
- Not afraid to make a change
- Dedicated to driving progress without direct guidance
Now, you might be wondering what the benefits of intrapreneurship are. Take a moment to envision a culture where your employees share creative ideas, and you help make them a reality. A culture where you create the structure so that the employees can take ownership and develop their own ideas.
- Is it different from your current work environment?
- Why is it different?
- What seems to be holding your innovative power back?
- What could it lead to?
Those who have embraced this type of corporate entrepreneurship cultivated an entirely new culture that supports self-sufficiency and independence among employees while seeking the best solutions for their company in terms of the greater good.
2. Startup Collaborations
Corporate startup collaboration aims to leverage both internal and external resources to develop new opportunities and solutions. In essence, you reach beyond your internal boundaries to explore new ventures.
We’ll say this until we’re blue in the face—innovation is not a solo mission (we are willing to look like smurfs for you).
Employees’ individual qualities can contribute to successful collaborations, but the collective understanding and action towards innovation drive teamwork and personal development. Joining forces with a startup that develops new technologies quickly will give your organization the power of innovation and disruption.
3. University-Industry Collaboration
University-industry collaboration is one of the more specific corporate entrepreneurship types. It's defined as a "bi-directional relationship [collaboration] between university [researchers] and industry entities, established to enable the diffusion of creativity, ideas, skills, and people with the aim of creating mutual value over time."
The collaboration between the two is meant to enhance innovation through knowledge exchange to develop new or improve existing products or services. (There’s that teamwork again.)
Industry—your organization—has the funding for research and the experience to commercialize a product. Universities have the power to invent, develop, and test products to solve problems in society and drive economic growth.
4. Corporate Venture Capital Funds
Corporate venture capital (CVC) is "the investment of corporate funds directly in external startup companies." Larger organizations “take an equity stake in a small but innovative or specialist firm, to which it may also provide management and marketing expertise” [Business Dictionary].
A CVC strategy is financially driven, aiming to increase profits directly or indirectly by making deals with innovative startups that use new technologies.
- Is your organization large enough to have CVC funds?
- Are you able to wait years to reap the benefits of your investments?
- Are you interested in collaborating with the “little guy” to deliver the next great thing?
There is the chance of losing your investment, but with investment expertise, you could turn a significant profit.
5. Research and Development (R&D)
R&D is the innovative process undertaken by corporations to develop new services or products and improve existing ones. It can be done with an external partner but is often conducted in-house for corporations looking to make the cultural change to innovation.
What's great about R&D is its flexibility. It's not sector or industry-specific. It’s not about immediate profit. Instead, it's a long-term strategy for your company.
These corporate entrepreneurship types all have the same goal—innovation, improvement, and production. It’s all a matter of your specific company goals to choose the right path.
4 Models of Corporate Entrepreneurship: Approaches for Leaders
Once you choose which type of entrepreneur you are or want to be, explore the four models of corporate entrepreneurship to refine your strategies. Here’s a brief look into each:
Model 1: The Opportunist
Every leader starts under the opportunist model. After all, entrepreneurs and innovators thrive on seeking out new opportunities to transform their businesses. It's about decentralized risk-taking, and it takes a trustworthy culture.
How much are you willing to risk in the name of organic growth?
Model 2: The Enabler
The enabler model means that leaders such as yourself encourage employees to take the time and innovate.
You provide a dedicated amount of time to them, and if they choose to, develop concepts and ideas for projects that will help the company evolve.
Do you want to improve performance and efficiency?
Model 3: The Advocate
As an advocate and leader, you are offering more freedom for your employee to positively impact the business through innovative changes that have the potential of turning into great successes.
This gives employees the chance to take on more responsibility and show off their skills.
How will your employees unleash ambition and creativity?
Model 4: The Producer
The producer focuses more on helping employees engage in innovation and realize their potential, to break out of their shell as intrapreneurs, and to create disruptive businesses making new jobs for execs.
How will you support and engage your employees?
Choosing Your Strategy With rready
rready helps middle to large organizations instill corporate entrepreneurship into their businesses. You have a vision, and our team has the services and expertise to turn it into a reality. Only a leader who lays the entrepreneurial groundwork can create and improve innovative products and services within their organizations. If you're rready to impact your business for the better and drive growth, contact us today.