Page 241 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

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large companies undertook corporate entrepreneurship initia-
tives in the 1960s, only to cancel them during the downturn of
the 1970s. When business is good, increased profits make inter-
nal funding easier, and some of that gets invested in corporate
entrepreneurship. When business is bad, firms often slash long-
term investments as part of larger cost-cutting measures.
Robert A. Burgelman and Liisa Välikangas, in their 2005 MIT
Sloan Management Review article, suggest that the cycles of cor-
porate entrepreneurship activity are more complex than that,
varying with corporate strategy and context. Indeed, when
times are good, firms may have ample opportunities to grow
just by exploiting their core. Without the impetus of a major
challenge to the core business, as happens during lean times,
the desire to invest in the future can wane. One of our clients
put it well: “How do you argue with success?”
In many cases, though, corporate entrepreneurship efforts
are shuttered because they don’t produce the expected results
quickly enough. Management underestimates the time and
effort required to see a major impact. Moreover, many early
programs tended to be overly focused on technology, as
described in Chapter 1. Sometimes companies select the
wrong kind of management, people who may be exceptional
at what they do but are unsuited to the task of business build-
ing. All of these situations reflect a lack of clarity concerning
the objectives of the program. Some programs overextend
themselves, for example, falling into the culture change trap
discussed in Chapter 1. Burgelman and Välikangas put it
well: “The rise and fall of corporate venturing, incubators,
and other innovative new business development programs
since the 1970s may have been due in large part to lack of clar-
ity as to the role and limits of entrepreneurship and innova-
tion in new business system development within large
corporations.”