Entrepreneurship in Larger Companies

William R. Kerr

Chapter | The Entrepreneur's Roadmap | 2017

Entrepreneurship in Larger Companies

Abstract

Entrepreneurship in large and established companies is vital for their long-term success. Incumbent firms face many challenges ranging from global competition to digitization. In times past, being caught flat-footed might have set a company back several years, but it could recover. Today, the threats are existential in nature, and competition can emerge quickly and from the places one least expects. Successful incumbents must ensure that they do not become self-complacent but instead look to renew themselves through corporate entrepreneurship (sometimes also called intrapreneurship). Many books and articles document the overall importance of corporate entrepreneurship and associated business renewal, and many advisors consider the important perspective of the CEO looking across the whole company. An example is Leading Breakthrough Innovation in Established Companies (Harvard Business School Press), which provides a longer reference set for the CEO and corporate-wide perspective. This chapter uses a different lens—it focuses instead on the perspective of a middle-to-upper-level manager contemplating a potential assignment to lead an internal venture in a large company. Befitting this series, we build lists of important considerations that this manager should evaluate. These lists are not exhaustive, but they offer corporate leaders a starting point for a careful due diligence and action plan around new ventures.

Keywords: Corporate Entrepreneurship;

Format: Print

Citation:

Kerr, William R. "Entrepreneurship in Larger Companies." Chap. 27 in The Entrepreneur's Roadmap: From Concept to IPO, edited by Tim Dempsey and Bonnie Hyun, 161–164. Chicago, IL: Caxton Business & Legal, Inc., 2017.

China's digital commerce platforms engage billions of consumers daily across a number of routine tasks from banking, retail purchases, travel, gaming, payments, and more. These platforms are the most sophisticated/informed and highest performing/capable in the world. While often business leaders refer to Amazon as a leader in digital exchange, this case highlights the vital areas where the Chinese platforms lead. Of special note is the merging of the retailers' on and offline capabilities into a unified consumer experience. Retailers like Walmart China have fundamentally altered their business model and federated with these Chinese platforms to build a better consumer experience, sell more, and manage costs and investment. While not all of these practices are globalizing, the non-China platforms are copying them fast to reach the new global standards. Leaders need to be informed and respond.

Consumer products companies were beset by changes on all sides during the 2010s. Customers were increasingly turning to ecommerce platforms rather than shopping in-store. Meanwhile, nimble, digitally-savvy competitors were gaining market share by capitalizing on the troves of newly available data on consumer preferences. Alibaba was the largest ecommerce platform company globally and operated in China, which was seen by many as an image of the future of western markets. In 2017, Alibaba launched the Tmall Innovation Center (TMIC) which provided a range of services to support innovation for companies selling through the Tmall business-to-consumer platform. These included robust consumer insights backed by data from across Alibaba and mechanisms to rapidly solicit customer feedback. Armed with the TMIC, consumer products companies were learning that effectively targeting consumer preferences required a new approach to product development which had far-reaching implications across roles, skills, and organizational structure.

This case touches on the topics of project-based work, agile methodology, and skill and talent management through Catalant's evolution as a company. Catalant’s journey to becoming a software platform and talent marketplace provides context for students to explore new models of work and ways companies are mobilizing talent internal and external to their organization. This case urges students to contemplate how these considerations might shape the critical decisions business leaders will need to make about how to manage their organizations and use their resources to capitalize on their own vision for the future. This case also provides valuable lessons for technology entrepreneurship, introduces students to important gig economy concepts, and asks students to consider the unique challenges facing companies like Catalant that are selling a gig platform as part of their product or service.

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Entrepreneurship in Larger Companies

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