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No corporation can thrive in the long term if it neglects to build the basis for innovative responses to changing customer needs and new market realities, even if this means taking the risk of evolving from its current business. As Virginia Rometty, CEO of IBM, has famously noted, “The only way you survive is you continuously transform into something else. It’s this idea of continuous transformation that makes you an innovative company.” Therefore, it should be a clear decision for today’s business leaders and investors to have an implementation plan to ensure continuous innovation.
But, how can management teams turn disruptive threats in their industries into value-creating opportunities, putting their companies on sustainable long-term growth trajectories without compromising short-term returns? Our research suggests that this can be achieved through the methodical use of an entrepreneurial management approach, allowing the systematic identification and successful exploitation of the novel opportunities in a company’s marketplace. Firms embracing this approach must put entrepreneurial thinking at the primary position at all levels of the organization, explicitly expecting that value-creating opportunities have to be noticed and properly exploited at all management ranks. Entrepreneurial management is based on the premise that the CEO and executive team cannot be the only source of innovative ideas.
As easy as this sounds, and despite the availability of recipes and solutions ranging from stage-gate innovation processes to having chief innovation officers in place, the reality of most established organizations prevents them from employing such a system for three reasons.
First, existing standard solutions do not always pay equal attention to entrepreneurial culture and processes. For instance, the seminal stage-gate process that has been around for three decades now[1] is mostly a mechanical recipe for putting the tools in place; yet, without an entrepreneurial culture, its application is usually limited to incremental new product development only.
Second, knowing the essential entrepreneurial processes – generation, development, execution – does not guarantee the right choice of tools to help each process for the specific context. The technique useful for idea generation in one firm is not necessarily applicable to others. Moreover, there are not many resources for companies to refer to that offer a wide range of available techniques for each process.
Third, the firms may be unprepared for...