Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

CHAPTER 3

Entrepreneurial

Spiderman

PART 1

THE ENTREPRENEURIAL

DNA

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

What entrepreneurs do (decision

making)

Entrepreneurs grasp opportunity by innovating

• Doing things differently – modifying existing

products or services, finding new marketing

strategies such as new routes to market - not

necessarily invention

• Finding a market need that is not yet met

• Bringing together the resources needed to

meet that need….quickly

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Strategy development

• Many entrepreneurs develop strategy

instinctively and intuitively-gut feel

• The adaptive organization makes its

decisions in incremental and serial step

• For some firms, strategy development may

be systematic and deliberate but for many

entrepreneurial firms, it is likely to be

emergent, incremental and adaptive.

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The strategy formulation cycle

CRISIS

CONSOLIDATION

GROWTH

Deliberate

strategy

formulation

Emergent

strategy

formulation

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

How entrepreneurs do it

Entrepreneurs manage through uncertainty by:

• Developing informal relationships and

networks with customers, staff and suppliers

• Create a network more than one (multiple)

networks

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Relationship and Networks

• Core of entrepreneurial approach to doing

business is the development of relationship.

• Relationship build into an invaluable network

of contact and goodwill.

• Trust and respect

• Product or service they might ask about

reliability or after sales service.

• Credibility and capabilities

• Education and track record are important

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Michael Dell

Dell is very much a

relationship

orientated company

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The entrepreneurial spider’s web

Entrepreneur

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Entrepreneurial Spider’s Web

• Entrepreneur create relationship and

networks between management and staff.

• Entrepreneur must seat in the middle of the

web to listen any reporting and issues from

all sides.

• Tend to be informal; one of direct

supervision.

• Motivating and effective in an uncertain

environment.

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The entrepreneurial spider’s web

grows

Entrepreneur

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

How entrepreneurs do it

Entrepreneurs manage through uncertainty by:

• Developing informal relationships and

networks with customers, staff and suppliers

• Continuously strategising, developing

strategic options underpinned by a strong

vision

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

The strategy formulation cycle

CRISIS

CONSOLIDATION

GROWTH

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

How entrepreneurs do it

Entrepreneurs manage through uncertainty by:

• Developing informal relationships and

networks with customers, staff and suppliers

• Continuously strategising, developing

strategic options underpinned by a strong

vision

• Mitigating risk through information and

knowledge

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Michael Dell

There are countless successful

companies that were started with

little more than passion and a good

idea. There are also many that have

failed, for the very same reason.

The difference is that the thriving

companies gathered the knowledge

that gave them the substantial

edge over their competition.

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Size

Large

Small

Young

AgeMature

STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5

Crisis of:

1: Leadership

1: Creativity

Evolution stages

Revolution

stages

Greiner’s Five Stage Growth Model

Growth

through:

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Size

Large

Small

Young

AgeMature

STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5

Crisis of:

1: Leadership

2: Autonomy

1: Creativity

2: Direction Growth

through:

Evolution stages

Revolution

stages

Greiner’s Five Stage Growth Model

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

STAGE 2 STAGE 3 STAGE 4 STAGE 5

1: Creativity

Size

Large

Small

Young

AgeMature

STAGE 1

Crisis of:

1: Leadership

2: Autonomy

3: Control

2: Direction

3: Delegation

Growth

through:

Evolution stages

Revolution

stages

Greiner’s Five Stage Growth Model

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Crisis of:

Growth

through:

Size

Large

Small

Young

AgeMature

STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5

1: Leadership

2: Autonomy

3: Control

4: Red Tape

1: Creativity

2: Direction

3: Delegation

4: Co-ordination

Evolution stages

Revolution

stages

Greiner’s Five Stage Growth Model

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Growth

through:

Size

Large

Small

Young

AgeMature

STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5

Crisis of:

1: Leadership

2: Autonomy

3: Control

4: Red Tape

5: ?

1: Creativity

2: Direction

3: Delegation

4: Co-ordination

5:

Collaboration

Evolution stages

Revolution

stages

Greiner’s Five Stage Growth Model

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Implications for culture

Creative,

innovative

Opportunistic

Achievement

‘Can-do’

‘Work is fun’

Sharing information

and knowledge

Change is normal

Celebrate

success

Measured

risk taking

Belonging,

ownership

Continual

learning

Self-confident

but realistic

Close relationships

with suppliers

Close relationships

with customers

Close relationships

with staff

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Implications for

organisational structure

Structure must encourage:

• Opportunity spotting, creativity & innovation

• Sharing information, knowledge and learning

• Sense of ‘belonging and ‘ownership’

• Delegation and decentralisation

• Development of relationships inside and

outside the organisation

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Implications for management

Need for:

• Strong vision, Good communication, Good timing

• ‘Light touch’ and delegation

• ‘Positive’ attitude that encourages self-confidence and self-

efficacy

• Continuous strategising at all levels

• Incremental adaptive approach to decision-making

• Openness that encourages knowledge exchange

• Avoidance of short-termism ex cost reduction via retrenchment

vs training

Corporate Entrepreneurship: Building the Entrepreneurial Organization by Paul Burns

Wrap Up

Growth through creativity

Crisis of leadership

Growth through direction

Crisis of autonomy

Growth through delegation

Crisis of control

Growth through co-ordination

Crisis of red tape