1. Meeting the challenges ofCorporateEntrepreneurshipMohammad ABBASI

2. IntroductionCorporate Entrepreneurship: Refers to process in which companies engage indiversification through internal development.Why is it needed? Existing business give stability but innovationgives differentiation. Corporations needs both. 3. Challenges associated withCorporate EntrepreneurshipOld company organizationLooks to exploit the existing market.New company organization:Looks to exploreChallenge is to balance these two in thesame corporation. 4. Why corporates fails to make a balance?Corporations generally respond with two approaches: Diffused responsibility: Disperse the task of new businesscreation to existing divisions which leads to: Resistance to change. Misalignment of incentives. Cowboy culture. E.g. EnronCentralization: Completely separate new ventures fromexisting divisions which leads to: Culture clash during integration phase. Power Struggle 5. How to handle the new business? Develop strategy to explore new opportunity Search for opportunities in areas of promise. Rely on customer feedback rather than market research. Use prototypes to test assumptions Set non financial milestones. Pre-decide when to pull the plug. 6. Operate with mix of old and newo Use mature-turks to run the new venture.o Align the incentives.o Have different review processo Select resource with specific skills. E.g. Entrepreneurialskills.o Ask company veterans to run the new businesses oversightbodies. 7. Integrate with autonomyo Timing very critical when to integrate.o Identity and integration should be balanced.o Assign both corporate executives and managers fromdivision to look after new ventures.o Stipulate criteria for handling new business over toexisting business. 8. An Example of IBM- EBOs Strategy for new venture Emphasis on Strategic clarity Teams encouraged to engage with market place. Proposed product to be tested as a pilot, design-in. Review process based on plan targets rather than financial targets. EBO evaluation based on project based milestones, financials and business maturity 9. Operating the new venture Appointment of mature turks- John Thompson as the head of EBO. Created new development, oversight and review process. Handpicked EBO leaders based on different selection criteria.Integrating the new business At the time when business had clear leadership and strategy. Corporate Strategy executives monitor progress of EBOs Reviews to check if traditional business is choking new business. 10. THANKS!!