Page 25 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

12 grow from within

within the firms. Cisco knew that it needed to identify a new
set of decision makers within its customer firms, those who
would truly value the new product, and that it needed to
approach the market in a new way. This strategy succeeded.
Though the Tellabs product preceded the CSR-1 by nearly four
years, the CSR-1 succeeded as a result of effective business sys-
tem design, tailored to the new product and its alternative buy-
ers. Though timing also worked in Cisco’s favor, Tellabs could
have found the same potential demand had it asked fresh ques-
tions about its path to market. Largely because of improper
business design, the product failed. (See Chapter 2 for a more
complete description of the Tellabs/Cisco story.)

Lost in Transition

As this example illustrates, the failure of large corporations to
profit from their new business concepts is not necessarily due
to their size. Cisco is an order of magnitude larger than Tellabs.
Large corporations are typically viewed as being bureaucratic
and slow-moving, which are anathema to entrepreneurial
activity. Small start-up firms are unencumbered by the
processes, controls, and mindsets prevalent within large cor-
porations. But large firms have numerous advantages over
start-ups in bringing offerings to market. Large firms often
have experienced management teams. They have the capital
necessary to see a new venture through its early stages, while
independent entrepreneurs are often starved for resources
(although too much capital can also be a problem). Large cor-
porations have market access and credibility when it comes to
recruiting partners and early customers. Since new business
development for a company should be about creating value—
whereas invention is about early discovery and conceptual-