Page 36 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Understanding Corporate Entrepreneurship 23

winner Muhammad Yunus. Not only was the yogurt formula-
tion new (manufacturing cost had to be cut by two-thirds in
order to make the required market price point), but the entire
go-to-market strategy was novel for Dannon. The company
had to create an entirely new business model and channel strat-
egy with its bank partner to address the needs of this desper-
ately poor population. The joint venture expects to break even
in 2010.
We have described what we mean by a “new business.”
Now let’s examine “within an established firm.” The typical
corporate entrepreneurship project combines ideas and
resources from a variety of people, both inside and outside the
organization. Even in firms that focus on harvesting ideas
from internal labs, the essence of R&D is incorporating and
building on relevant external knowledge. To be considered
corporate entrepreneurship, a firm’s participation must, in
general, go beyond creating ideas, making investments, or
pushing sales. For example, when Cisco buys a company and
simply rebrands and sells that company’s products, that’s
growth through acquisition. If, down the road, these new
Cisco employees foment new businesses, that’s corporate
entrepreneurship. Similarly, if Cisco takes an equity stake and
board positions in a new company but does nothing else,
that’s a venture investment. However, if Cisco partners with
the company to build out a new Cisco business, that’s corpo-
rate entrepreneurship.
In summary, corporate entrepreneurship is distinct from but
can include

• New product development, in that it involves new ways of
doing business that are often disruptive to the core
business. It involves more dimensions of change than
product or technology innovation alone.