Entrepreneurship: is a full time job with 100% motivation

Starting up a new business is hard to do and even more difficult to be a successful new business. Why is it that many people starting of? What makes the difference between a Winner and a Laggard?

Oké, one logic explanation to start is that I got fired and nobody wants to hire me and the only thing I can (not wanted to) do is put a sign in my front yard with my name and twitter account on it hoping for the best. I know I’m good (or at least I was good) but the problem is that nobody knows it, or even worse nobody needs my goodness anymore. Instead of being an entrepreneur I become a day-worker for hire. So just starting on your own doesn’t mean you are an entrepreneur?

What are the key characteristics of an entrepreneur? Much is well documented in the startup owner’s manual from Steve Blank and Bob Dorf.

Knowing to start with untested hypotheses. It starts with a vision of a missing job-to-be-done (something what customers need to get fulfilled but can’t find yet). Although he has clear ideas of product or service to get the job-done, the entrepreneur will start immediately checking his vision with real customers.  The entrepreneur will spend more time with customers than inside his office.

Understanding the need for speed, learning and iteration. From the start you understand that the business plan will not survives the first contact with the customer. The first day, you will learn that the brutal facts in the market is different as will be the next day and you need to adjust your product, service and process to the willing customers.

Monitoring the cash-burn-rate, time (number of months cash in the bank). Understanding the key financial metric that only matter to do the job. In the time you have left, you need to find the right business model to survive. Understand (structured process for testing) what is absolutely necessary to spend time and money on to get your money machine up and running (business model hypotheses).

The motivation and courage to get into action. This is the most important internal driver for any entrepreneur to become a winner versus a laggard. Watch the nice clip of Tom Corson-Knowles explaining what I mean by that.

Entrepreneurship in Corporate Organizations

Entrepreneurship means acting in a special modus: experimental, connected to the outside, being authentic and looking for mastery. How does this fit into the typical corporate culture of global organization?

The drive for Innovations in often described in strong marketing language in order to invite employees to come with new business opportunities. But what will happen if you really want to go for this new opportunities? Experimental is oke as long as it fits into our company compliances rules. Connected to the outside world is good but as long as we can protect our knowledge and ideas. Being authentic is fantastic as long as it fits in with our personal development plan template. Mastery is important but needs to be profitable on short notice. As we experience so often, there is a huge gap between the (marketing) company values and the daily practice of balancing between freedom to take risks (entrepreneurship) and the security of our environment (hold on to your job and material benefits).

In the great story of Eric Ries's Lean Start-up we can learn how to practice entrepreneurial skills in a hostile corporate environment.

Increase the entrepreneurial capabilities in your organization

The idea that just a business owner is an Entrepreneur is long passé. In the fast changing business environment every owner, executive and employee needs to develop entrepreneurial capabilities. Nobody can avoid taking risks, adapting to changes and make severe pivots when necessary. Entrepreneurship is a Mastery what can be trained and developed. Internal as well as external stakeholders will look at them for vision and decisions to go forward. Entrepreneurship always aims at the same: increasing skills to adapt to changes in order to create new opportunities.

Entrepreneurship in a different business environment:

Start Up Entrepreneurship

Identifies what and how to growth fast and become profitable. Understand and implement Lean Start Up principles. Building the right team, understand and control the financial cycles.

Entrepreneurship in SMEs

Understand the change drivers in the current business model and develop new business opportunities. Mobilize the key (in- and external) stakeholders in the transformation towards the target business opportunities.

Entrepreneurship in Corporate Companies

Identifies the right hot spots for entrepreneurship. Design and implement a successful environment for (In- and Outside) entrepreneurs. Understand the different way to lead and manage entrepreneurs.

Entrepreneurship in Non for Profit Organizations

Understand as a executive member how to create new ways to capture value for the environment reflection the objectives of the organization. Become an ambassador of entrepreneurship to external stakeholders.

Evolution of Innovation management will be published on the 15th of February 2013

A new book of Evolution of Innovation management will be published on the 15th of February 2013, edited by Alexander Brem and Eric Viardot. The book is about the fact that Innovation is seen as a key driver for performance and growth in business. It provides a strong competitive advantage and is one of the best ways to speed up the rate of change and adaptation to the global environment. Concurrently, the topic of innovation is also gaining increased visibility and interest among academic communities worldwide.


However, some of the challenges of innovating are remarkably consistent and recent times have shown the emergence of new ways for stimulating and

managing the innovation process, especially from an international perspective. Even if these processes are taking place in very different industries, there are many parallels in successfully managing them.

The new book explores these new routes and assesses their value both for markets and companies. More specifically, the book is organized around three themes:
• Innovation Strategies
• Innovation Management Tools
• International Perspectives

Together with Robin Chu (team member in my Business Innovation team and one of our top strategic analyst) I wrote chapter 15: “Creating an Environment for Successful Innovation - A Management Consultant's Perspective”

To view detailed content of the book, please visit Palgrave

Notes on Contributors

Symbiotic Innovation: Getting the Most Out of Collaboration; R.J.Thomas & Y.Wind

Performance Measurement of Co-Creation Initiatives – A Conceptual Framework for Measuring the Value of Idea Contests; V.Bilgram

Measuring the Success of Open Innovation; E.Brau, R.Reinhardt & S.Gurtner

Can SMEs in Traditional Industries be Creative?; J.M.Zabala-Iturriagagoitia

Scenario-based Learning Architectures as a Management Tool; N.Pfeffermann & H.Breuer

Social Network Analysis – an Important Tool for Innovation Management; G.Drexler & B.Janse

The Evolution of Mobile Social Networks through Technological Innovation; V.Ratten

Exploring the Role of Early Customers in the Commercialization of Innovation; F.Frattini, G.Colombo & C.Dell'Era

Managing Communities of Practice to Support Innovation; S.Borzillo & R.Kaminska

Joining Innovation Efforts using both Feed-forward and Feedback Learning: the Case of Japanese and Korean Universities; I.Oh

Innovation Management Reflections: a Brazilian Market Perspective; F.A.Salum, R.S.Reis & H.Ferreira Braga Tadeu

The Global Importance of Innovation Champions: Insights from China; A.Kriz, C.Molloy & B.Dennes

Frugal Innovation; P.M.Banerjee

Flexible Working, Mobility and IT Innovation and ICT in 2012 – The Case of Flexible Working; R.Costa-i-Pujol

Creating an Environment for Successful Innovation - A Management Consultant's Perspective; K.Klokgieters & R.Chu

Conclusion; A.Brem & E.Viardot

Innovation leadership study. Managing innovation: an insider perspective

Capgemini Consulting, the global strategy and transformation consulting brand of the Capgemini Group, in partnership with IESE Business School, the top ranked business school of the University of Navarra, today announced the findings of its annual global Innovation Leadership Study, examining innovation management strategies at organizations around the world. The study reveals that innovation leadership is becoming increasingly important, with 43 percent of respondents stating they have a formally accountable innovation executive in place, responsible for driving innovation, compared to just 33 percent last year. This rise of the ‘chief innovation officer’ suggests driving innovation is becoming a key priority for companies everywhere. However, despite this, the majority of companies (58 percent) still do not have an explicit innovation strategy in place, with most companies considered ‘innovation laggards’ (38 percent) and just 7 percent classed as ‘innovation leaders’.


The study, which surveyed over 260 innovation executives globally, suggests that while innovation is an emerging functional area within organizations, limited organizational strategies for driving innovation are impairing growth. Only 30 percent of respondents agree they have an effective organizational structure in place for driving innovation and less than a quarter (24 percent) believe innovation efforts within their companies are effectively aligned. This is mainly due to not having a formal organizational structure for innovation (45 percent) or a well-defined governance structure (45 percent) in place, or a lack of clear roles and responsibilities for innovation (40 percent). 39 percent of respondents also referenced the lack of an effective decision making process for innovation, largely due to not having a well defined process in place to prioritize and allocate time and funding to innovation projects

Download Report: Innovation Leadership Study
 
See reaction son Wall Street Journal and Forbes Magazine

Future Trends in the Value Chain shows Innovative Strategies for the New Decade

Every two years a collaborative platform of The Consumer Goods Forum, Capgemini, HP and Microsoft formulate key trends for the Value Chain. Together with top Executives from the Retail and Manufacturers Industry the third version is submitted.

In 2006 the first report 2016: A Vision of the Future Value Chain came out. The platform worked with 80 Executives of Global Organizations to collect the key trends for the industry. 2 global workshops are initiated (Utrecht, NL & Chicago, USA). The key message was: New Ways of Working Together in the Value Chain.

Two years later (2008) the second edition was born 2018: Succeeding in a Volatile Market. In this year already 130 Executives participated in several workshops: Global workshop (Utrecht, NL), Asian workshops: Hong Kong (Asian region), Mumbai (Indian market), Tokyo (Japanese market). The key trends pointed out: Changing society, Rising cost (and scarcity) of raw materials, Increasing awareness and action on sustainability, Growing consumer access to technology and Changing business models.

In 2010 the last report was fomulated 2020: Building Strategies for the New Decade. The number of participants in several workshops had been 200 Executives. Global workshop (Chantilly, FR), Regional workshop GS1 in Europe (Antwerp, BE) en diverse Country workshops: Australia (Melbourne), France (Paris), Netherlands (Utrecht), US (Chicago), Mexico (Mexico City). De most important trends from this year are: Make our business more sustainable (From niche to norm), Optimize a shared supply chain (Collaborate differently, compete differently); Engage with technology-enabled consumers (The consumer in the driver’s seat), Serve the health and wellbeing of consumers (Focus on quality of life). For more detailed outcome of the report please visit my slide share space.

What we see in the past 6 years is that Asia is rapidly becoming the key region for the new global innovative business strategies for corporate players. I like the discussion about the outcome of the Future value Chain reports during my Academic Guest Lectures or when I speak at international Innovation forums.
My experiences is that many organizations are talking about it but a few are acting upon it.

Koen Klokgieters

Business Model Innovation, Stick to your Roots !!!

In my advisory practice we work a lot with large corporate companies. In our annual Global Innovation Survey we see the focus on Business Model Innovation and co-creation in the value chain getting more attention every year. The far majority of corporate companies invest in new business models to create sustainable value in a different way. A growing area for changing the current business model is to outsource not only supporting processes like Finance, IT or HR but also primary business processes such as Purchasing, R&D, Logistics and Manufacturing. Many well known Technology companies left their original core competences behind and become a Design, Marketing and Sales company (Philips is a clear example). I understand the business drivers behind this and that senior executives are seduced to go for short term sales growth and stock value. But I believe this is not a sustainable model for a leading innovator. In my opinion there is a need for a balance between R&D, Operations and Marketing & Sales within the boundaries of a corporate company in combination with an open innovation strategy to the outside world. Open innovation and co-creation seems to flourish if a company keeps substantially own core capabilities. The pitfall for large extend of outsourcing is that the company expect to manage the core process with contracts and SLAs. We see often that short term and top line successes are still hard to find. What is missing is a holistic view on collaboration an doing business! The leading success factor is all about trust and long term relationships.

I like to share two examples of successful business models in which core competences are not outsourced, the focus is not on short term money but collaboration with the outside world is based on many different but integrated aspect like economics, politics, social integration and education, green & sustainability, new style of leadership.

The first example is the Region of Voralberg in Austria. This is one of the most innovative industrialized export oriented region of traditional Europe. Many successful SMEs, traditional craft manufacturers like metal, wood, nutrition, electro, differentiate based on Product (high quality), Design (Modern Trendsetting) and Functionality (usable). There collaboration network enables them to find new product-market-combinations in a high frequency. The schools and education programs are a close partner in their network. The Region is relative small (less than 400.000 habitats) and accelerate on smartness, trust and regional proud rather than volume and power. (source: Prof. GJ Hospers, University Twente)



The second example is American Apparal. American Apparel is a vertically integrated manufacturer, distributor and retailer, based in downtown Los Angeles, California. We currently employ approximately 10,000 people globally (about 5,000 in LA), and operate more than 285 retail stores in 20 countries.

Within our business model, knitting, dyeing, cutting, sewing, photography, marketing, distribution and design all happen in the company's facilities in Los Angeles. The company operates the largest garment factory in the United States, at a time when most apparel production has moved offshore. With our recently opened stores in China, we are now selling Made in USA clothing in the largest consumer market in the world.



American Apparel leverages art, design and technology to advance the business process, while continuing to pioneer industry standards of social and environmental responsibility in the workplace.
(source: americanapparel website)

The most interesting thing about these examples is the strong vision and leadership on sustainable innovation. The strong believe in integrating the most important aspect of human life and living environment into the business model of their companies. It is not about short term, it isn’t about making fast and a lot of money, it isn’t about power play, it is about honesty, fairness, trust and real collaboration for every involved partner. And they are and will be successful! In my opinion the most corporate organization can learn a lot of these role models.

Innovation paradox: entrepreneurship versus the power of the corporate staff departments

International researches (as from 2006 up to and including most recent) indicates from that the members of the Council of Governing Board continue consider Innovation as the way to growth increase and secure continuity. The Credit Crisis hardly change anything in these thoughts.

The Top 3 most significant challenges for Innovation still remains: successful organizing innovation, increasing the speed of go-to-market and proving the profitability of innovation. Therefore, it is not a matter of new ideas but the realization of those ideas. In my opinion, the reason for this problem is caused by the phenomenon of:

The law of the Organization Gravitation.

The Organization Gravitation is the (economic and cultural) strength which prohibits organizational boarders to adapt to new ideas.

The key drivers behind this strength is the need of people to maximize continuity of their current status and maximizing security. If a critical mass of people in an organization sharing this need is reached, then they will be prepared to give up their individual freedom (free-thinking, experimenting, freedom of speech) for security provided by the organization.
This way company rules, control mechanisms, technocracy and bureaucracy occurs. The aim of company’s technocratic staff departments and corporate centers is carrying out the control and maintain the rules: watch-dogging the company’s status quo. And then the organization gravitation is born.

In practice the Organization Gravitation has proven not be a constant but dependent. As the new idea is proportionally more radical (further outside the existing frameworks of the organization) the organization gravitation will increase. As the outside world becomes more unsafe the organization gravitation will increase proportionally. As the lack of vision and leadership is stronger the organization gravitation will increase.

In practice we see beautiful examples of this law and its developments.
Radical innovation within the existing limits of large organization appears to be difficult. Dr. Axel Rosenø describes in the presentation “Developing Radical Innovation Capabilities in Established Firms” the tensions between the existing organization and radical innovation. Philips has chosen to spin out many innovations in order to avoid the Organization Gravitation (see also Henry Chesbrough and open innovation).
The insecurity in the outside world has increased enormously by the Credit Crunch. As a result, the (corporate) rules have increased enormously. We see a strong tendency of centralizing the power to the corporate centers with the aim far-reaching standardization, shared service centers and cost cutting projects. Nearly every organization starts to behaves as a herd animal: in search of the security and surviving in the herd. But now is the moment to step outside the herd and act anti-cyclics. Again in the world of first class innovation the example comes from discounter Ryanair: not in spite of, but thanks to the economic crisis we are able to manage significant discount for the purchase of new, better planes (Michael O'Leary, the director of Ryanair). Examples of lack of vision and leadership are not only restricted to the businesses but also in politics this is not an exception. Although Obama and Merkel give it a fair try.

If the Organization Gravitation has reached a certain scope a so-called Organization Black Hole is born: an organization with maximum closed borders and internal autism for renewal and entrepreneurship. The attraction of the Organization Gravitation is so strong that escaping becomes impossible is. Only a terrible impact (bankruptcy or take-over) can break open the borders. By then Entrepreneurs and Intrapreneurs probably have left the organization already.

How to Innovate the Macro Business Model

Up to now I focused my writings on innovation of Business Models of companies and their role in the Value Chain. The credit crunch and its effect on the real economy asked for a reflection on how to innovate the current Macro Business Models and the possibility to create a so called ideal Super Business Model on macro level.

The Russian Economist Nikolai Dmitrievitsj Kondratieff discovered in the early nineteen hundreds a economical cycle of fifty years in four different stages (seasons): Spring (starting up), Summer (consolidation), Autumn (stabilization) and Winter (liquidation). Eric Mecking (Universiteit Amsterdam, Deflatie in aantocht) recognized strong similarity between the situation of 1920-1929 and 1980-2000. These periods are also recognized as typical Autumn Seasons.
We are just at the beginning of the Winter Season and for the first time in the whole world at the same time. It will be much worse than today and it will be not over in just one or two years! On the contrary, based on the counter measures of National Administration (based on the old Business Model of one-faced value measuring and often extreme unequally value sharing) I expect they even enlarge the problem.

So it is time to Innovate the Macro Business Model (MBM) !!!

What are the key elements to change in the current MBM:

1. From extreme unequally value sharing towards a more balanced sharing. President from Brazil showed a nice example with his Bolsa Familia how he managed to implement the first steps to balance the value sharing. Its seems to work for Brazil.
2. From individual value measuring towards collective and sustainable value measuring. Noreena Hertz wrote about the change from Gucci-Capitalism to Coöp-Capitalism. The core values are based on cooperation and collective interests.
3. From absence of Government or overregulated Government towards a balanced and facilitating Government. In the VS the Administration is not endorsing basic human needs. President Obama showed that every 30 seconds a family is forced to lose their house because than can’t pay the medical bills. China bounds every economic model to operate freely. The EU suffocates entrepreneurship, innovation and risk taking with ridicule law and legislation. Administrations needs to develop new formats based on the balance between freedom and safety. It should be flexible, adaptive and therefore based on the courage of new generation of world leaders.
4. From one-side technology based innovation criteria towards holistic measurement instruments of Innovation. In many countries we measure innovation based on R&D spending, the amount of new IP and the volume of engineers. Successful innovations should be measured as I described in our Point of View on Business Model Innovation.

I strongly believe that all pieces of the puzzle are there but not in place. We need to co-create on a global level to reach out to a new Macro Business Model working for everyone and in any place. We need to step forward and show new leadership and entrepreneurship!