Corporate Entrepreneurship: Seven Steps To Build It in Your Company

For decades, the business world split into two buckets: scrappy startups and big businesses. But with the growing pressure to stay agile and innovate, that line has started to blur thanks to corporate entrepreneurship.

Corporate entrepreneurship imbues companies of all sizes with a startup mentality to drive innovation, increase creativity, and improve resiliency.

Table of contents:

• What is corporate entrepreneurship?
• Benefits of corporate entrepreneurship
• How to foster corporate entrepreneurship
• Corporate entrepreneurship examples

What is corporate entrepreneurship?

Corporate entrepreneurship is a work culture that supports entrepreneurialism, innovation, and creative thinking. It enables an organization to adopt a startup mindset, one that helps businesses identify and pursue new product and service opportunities.

Companies foster corporate entrepreneurship in a number of ways, such as:

• Encouraging employees to take the lead on projects
• Offering incentives, such as bonuses, to risk-takers
• Investing in new opportunities, such as side ventures

Benefits of corporate entrepreneurship

Corporate entrepreneurship puts innovation, a key aspect of company success, at the forefront of a company’s culture.

While 84% of CEOs cite innovation as critical to business success, only 6% report feeling satisfied with their innovation performance. Corporate entrepreneurship helps bridge this gap, and can increase revenue, improve resiliency, and more.

1. It diversifies and increases revenue

By pursuing new opportunities, your business diversifies its revenue streams and can bring in more money.

One study conducted by the International Money Fund (IMF) found that, on average, 20% of business sales come from products new to markets or new to the business.

Corporate entrepreneurship encourages the entire organization to think of ideas for the business to pursue, which includes new features, products, and services.

2. It reduces costs

Corporate entrepreneurship also means looking at different ways to cut costs. An employee, for example, might look at business operations and identify redundancies. In a work culture that embraces corporate entrepreneurship, all employees look for ways to challenge the status quo — including current costs.

In the same study conducted by the IMF, researchers found that 40% of product innovations resulted in product-related expense savings. 

3. It makes your business more resilient

Almost every business executive (97%) regards resiliency as imperative to business success. Yet just under half view their organization as resilient. Corporate entrepreneurship brings greater resiliency to your business, as it:

• Makes your business more agile
• Reduces impact from market changes
• Increases internal innovation

Economic downturns often cause businesses to shutter permanently, especially if they lack backup plans to deal with unexpected hurdles. Over 7 in 10 small business owners worry about the impact of a recession on their business.

By having a more innovative and creative workforce, you can set yourself up with greater resilience during tough times.

4. It helps your work culture stand out

Job seekers rank company culture as an important factor when applying for roles. This means companies with standout cultures receive stronger, more competitive applicants. Corporate entrepreneurship can make your workplace culture appealing to applicants, as it:

• Encourages employees to take responsibility for projects, increasing their autonomy
• Gives workers more flexibility
• Gives workers more opportunity to upskill and move up
• Encourages risk-taking

All of these reasons improve employee satisfaction and, in turn, help your work culture stand out from the crowd.

How to foster corporate entrepreneurship

1. Determine your company’s risk factor

Though corporate entrepreneurship brings in clear benefits, it also has some drawbacks. Enabling all employees to tackle side projects, for example, could raise costs and remove the focus from day-to-day work. Not to mention innovation and experimentation can end in failure.

So, ask yourself the following questions to determine if corporate entrepreneurship makes sense for your organization:

• How much risk can the business afford?
• Does the industry as a whole engage in corporate entrepreneurship?
• In what departments does corporate entrepreneurship make the most sense?

2. Craft a compelling mission statement

To get employees onboard with corporate entrepreneurship, you should consider writing a thoughtful mission statement. This should encompass why your business feels passionate about innovation. Consider the following examples:

• “We believe in adapting to the evolving needs of our customers.”
• “We aspire to revolutionize the biotech industry.”
• “We want to constantly evolve and build upon our products.”

The statement should explain what corporate entrepreneurship means for your business, your employees, and your overall business goals.

3. Hire entrepreneurially minded people

When hiring, consider incorporating questions to gauge a candidate’s entrepreneurialism. You could start by asking:

• Tell me about a passion project you recently worked on.
• How do you deal with uncertainty?
• Have you ever challenged yourself or a previous employer?

Any questions that tap into a candidate’s creativity, innovativeness, and proactivity will help you hire more professionals with entrepreneurial spirit.

4. Encourage leaders to embrace failures and mistakes

You, as a business owner, might embrace failures caused by risk-taking. But you need to encourage leaders, including managers, to better manage and respond to mistakes and failures.

So, instead of managers responding negatively to failure, instruct them to view it as a learning opportunity. They should collaborate with the employee on which steps they took, where the error occurred, and lessons learned along the way. That way, the employee feels comfortable bringing up mistakes to their manager who, in turn, extracts takeaways.

5. Create innovation-based incentives

It takes more than asking employees to innovate and tackle projects. You should look at how your organization rewards employees. Do you often give out year-end bonuses? What kind of perks do you reward employees? What does one’s career look like at the organization?

Then, think of ways to integrate innovation-based incentives. You could, for example, recognize risk-taking employees in messaging. Alternatively, you could reward bonuses to employees who create revenue-driving or impactful projects.

Whatever the incentive, it should demonstrate how your company views corporate entrepreneurship.

6. Invest in new opportunities

Strive to invest in viable opportunities discovered by employees, evaluating each proposed project based on its viability and profitability.

Consider this — can your organization realistically create and market this product? And to that end, does this product show a road to profitability?

If an employee presents an exciting opportunity, such as a new feature or product, you should think of ways your company can invest and build it. You could:

• Give the employee resources to conduct additional market research
• Involve other departments within the company, such as marketing, to gather more information
• Create a prototype of the product or feature

7. Gather feedback from employees

You cannot build corporate entrepreneurship into your organization without help. So, as you work to build up this startup-driven culture, survey employees on their thoughts. Ask them what works, what the organization could improve, and what ideas they have.

Corporate entrepreneurship examples

Procter & Gamble (P&G)

P&G describes itself as having “the heart of a startup and the resources of a global corporation.” Most recently, P&G launched an internal development team called Growth Works.

The in-house team researches and develops innovative products for P&G’s portfolio — such as the Oral-B iO electric toothbrush. Growth Works has spurred new ways of thinking across the organization, bringing together teams to collaborate more frequently.

Other brands can take a page out of P&G’s book and consider building an in-house innovation team. This could involve current employees spending some of their time experimenting with and researching product and feature ideas. Or, if your organization can afford it, a team hired specifically to build out innovative opportunities.

IBM

IBM prides itself on its innovation, explaining that it “has repeatedly reinvented itself to overcome whatever obstacles stand in the way of innovation and value for our clients.” This mission statement explains their various innovation initiatives, from promoting IBM ideas to organizationwide brainstorming.

IBM’s blog Innovation Expectations spotlights notable IBM workers and their insights on emerging technologies and trends. The blog demonstrates the value IBM places on individual knowledge.

Moreover, IBM previously executed an organizationwide brainstorming campaign to generate new ideas and build working prototypes. Thousands of IBM workers came together, identified new opportunities, and learned the ins and outs of cognitive computing. The most successful ideas moved forward, with several teams presenting their prototypes to senior executives.

Both of these initiatives show IBM’s commitment to fostering corporate entrepreneurship. Other organizations can similarly host companywide collaborative efforts, which can result in many new product ideas.

Intel

Intel promotes seven company values, including “fearless innovation,” which espouses taking risks, learning from mistakes, and disrupting markets. The computer company achieves this a number of ways, including its own venture capital (VC) firm and an industrywide technology conference.

The organization’s VC firm, Intel Capital, contains a portfolio of cloud, silicon, devices, and frontier companies. Since its inception in 2015, Intel has invested $830m+ in diverse startup teams and has assigned 90+ Intel Embedded Experts into these organizations.

Intel also hosts its own technology conference called Intel Innovation, which strives to bring together innovative and entrepreneurial leaders in the hardware and software technology space.

These separate but connected investments alone show the large investment Intel has placed in corporate entrepreneurship.

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