Page 24 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Entrepreneurship, Innovation, and Organic Growth 11

The System Is the Solution

As these examples suggest, corporate entrepreneurship need
no longer be an episodic, product-based phenomenon that
occurs primarily in technology companies. It is increasingly
being understood as a companywide challenge with implica-
tions for how the company interacts with its ecosystem of cus-
tomers, suppliers, regulators, investors, media, and so on.
Designing a new business is largely about defining and imple-
menting new and unfamiliar business models. A 2006 CEO
study by IBM Global Business Services (“Expanding the Inno-
vation Horizon”) found that companies that spend relatively
more on business model innovation tend to outperform their
peers. The benefits achieved were cost reduction, strategic flex-
ibility, improved focus, and the ability to exploit new market
and product opportunities.
Innovative thinking about business models helps companies
discover compelling value propositions and fend off competi-
tive threats from adjacent players. A promising new product
or service can end in failure if it does not have an appropriate
business design to support it. New channels to market, new
sales competencies, different supply chains, or new manufac-
turing capabilities might be required.
Consider the telecommunications equipment company
Tellabs, which introduced the Titan 6500 in 1999. The Titan
6500 was a transitional product for telecommunication com-
panies, bridging their traditional switched and new IP (Inter-
net Protocol)-based network strategies. Tellabs marketed the
Titan 6500 to its traditional buyers through its existing sales
channel. The effort failed; by 2003 the company had written off
the product for a loss. Soon after, Cisco introduced the CSR-1,
which was essentially the same product. Cisco went to the
same companies to sell it, but it targeted different buyers