Internal Entrepreneurship at the Dow Chemical Company Case

BA 560

Fall, 2005

Prof. Dowling

“If you always do what you’ve always done, you’ll always get what you’ve always gotten.”

Class Question:

What is the genesis of the epoxy.com project?

Class Question:

What were important skills, characteristics and abilities of Ian Telford prior to the e-epoxy.com venture?

Class Question:

How did you vote on the request from Telford for $100,000?

Case Question #1

If you had been a member of the ELT in November 1999 when Ian Telford asked for initial funding of $100,000, would you have voted ‘for’ or ‘against’ providing the funding? Your answer needs to focus on why you voted for or against.

Case Question #1 -- Class Discussion Questions

What are the arguments for funding the $100,000?

What are the arguments against funding the $100,000?

Additional Class Discussion Question

Given the number of reasons against Telford’s venture, why did Vermaak approve the project?

Case Question #2

What is your evaluation of Ian Telford, the internal (corporate) entrepreneur? Make your evaluation criteria clear.

Case Question #2 -- Class Discussion Questions

What evaluation criteria should be applied to Telford?

Based on these criteria, how did you evaluate Telford?

Case Question #3

How would you judge the performance of the corporate sponsors (within Dow Chemical) of Telford’s project? Focus on the top 4 or 5 key issues/factors. Make your evaluation criteria clear.

Key Sponsor Issues/Factors

HR development:Encourage & reward entrepreneurial

activities Identify potential entrepreneursMatch the right opportunity with the

right entrepreneurEmpower but also be hands-on as

coach and mentorPlan personal development of

entrepreneurs

Key Sponsor Issues/Factors

Execution Skills:Ensure integrity of the projectPersonal belief and public support of

the concept (‘skin in the game’)Set tough but realistic goals, budget

& scheduleDemand resultsTolerate ‘idea’ failures

Key Sponsor Issues/Factors

Political skills:Sell upwards effectivelyKey linkage to corporate resources:

financial, HR, timeProvide political coverProvide exposure and career building

opportunities for internal entrepreneurs

Provide project leadership/sponsorship continuity

Case Question #4

What are the ‘lessons learned’ from the performance of Ian Telford that would be helpful to you as a potential internal (corporate) entrepreneur?

Class Discussion Question

What are the key ‘lessons learned’?

How might these lessons be applied to other situations?

What caution should be exercised in applying these lessons to other situations?

Application to Other Situations … The engine for internal growth is the

internal entrepreneur Internal entrepreneurs need to be

developed/hired, nurtured, and rewarded commensurate with results

The internal entrepreneur needs a network to function effectively. This social capital needs to be built/earned. It cannot easily be imported from outside.

Application to Other Situations … “Small wins” encourage others to

become more entrepreneurial Sponsors are key to success; more

importantly sponsors and entrepreneurs need to be matched proactively

The most critical variable in creating a long-term environment for internal entrepreneurship is a supportive organizational context set by top execs in the firm

Cautions ... Sponsors come and go during a new

internal venture; the successful entrepreneur needs to carefully cultivate new support for the venture over time as key players change (as Telford did)

Corporate growth can be top down driven or bottom-up (organic). Organic growth is almost impossible without a supportive culture and top management leadership

Characteristics of Effective Internal Entrepreneurs

Personality Traits:IntegrityPolitical savvyHonest about mistakes; takes

feedback from sponsorsShares creditBreaks rules but always stays true to

the corporate vision and values

Characteristics of Effective Internal Entrepreneurs

Experience:Established track record; brings

credibility and social capitalLong tenure within firm helpsGeneral manager not a narrow expert;

ability to think laterally

Characteristics of Effective Internal Entrepreneurs

Behaviors:Ability to discover a profitable value

propositionAbility to communicate and market the

value proposition; energy & passionAbility to mobilize resources;

networking abilityAbility to assemble and motivate a team

of experts.

Characteristics of Effective Internal Entrepreneurs

Behaviors:Ability to deliver resultsAbility to take informed risks, make

timely decisions, and be unafraid of consequences of breaking the rules and the possibility of failure

Ability to ramp up (execution skills) or pull the plug (provide career ‘escape routes’ for team members)