Entrepreneurship and

Intrapreneurship

Rey Lugtu

www.reylugtu.com

Model of Organizational Culture Types

Entrepreneurship

Entrepreneurship seeks to understand how opportunities to create something new arise and are discovered or created by specific personswho then use various means to exploit or develop them, thus producing a wide range of effects.

Key Activities

Identifying an opportunity

Visioning

Exploiting or developing this

opportunity

Running a new business successfully

Entrepreneur - Tony Tan Caktiong,

Founder, Jollibee

1975 – Jollibee Ice Cream Parlor

Moist hamburger patties, crispy fried

chicken and pansit palabok

Expansion in 1980s - economic

recession and political instability hit

the Philippines in the

Founder Tan says Jollibee is

"reinventing competitiveness.“

Sales $230 million with more than

200 outlets

Entrepreneur Of The Millennium:

Bill Gates

1974 – “World's First Microcomputer Kit – Altair 8800” by MITS (Micro Instrumentation and Telemetry Systems)

Gates told the MITS that he and Allen had developed a BASIC that could be used on the Altair

The program worked perfectly the first time in a demo

Within a year, Bill Gates had dropped out of Harvard and Microsoft was formed.

The Process

Recognition of

an opportunity

Deciding to

Proceed &

assembling

resources

Launching a

new venture

Building

successHarvesting

the rewards

Entrepreneurs’ Main Motivators

Entrepreneur

Issues and Challenges

50-80% of start-ups fail in the first 5 years

8 out of 10 failures due to under capitalization,

marketing, & management - not the technology

Start-up Funding

Ethics

Government regulation

Globalization

Intrapreneurs

Persons who create something new, but

inside an existing company rather than

through a new venture.

Anyone who behaves with entrepreneurial

spirit within a large organization

“The intrapreneur is an

essential ingredient in

every innovation.”

- Dr. William Souder

10 year life cycle study of 289

innovations in 53 companies

Intrapreneurial Mindset

Vision – a working model of the product/service/business being created

Becoming the corporate hybrid – doing work outside of your own scope

Need to act

Dedication

Overcoming (not avoiding) mistakes and failures

Managing risk

Loyalty to long-term business objectives

Intrapreneurial Organization

Example: Du Pont

5-15% of time spent on exploration

Organizational support to intrapreneurs

Voluntary support from different parts of organization

Bonuses for venture champions and teams

Intrapreneurial Organization

Example: 3M - Improvising15% rule Program

inventors to spend 15% of their time working on projects of their own choosing

corporation may officially fund it.

Genesis Grant

finances innovative projects up to $85,000 to carry their projects past the idea stage.

award about 15 grants per year.

Policies & procedures promote personal freedom and trust.

Failure is not punished.

3M Intrapreneur – Art Fry

Began in 1974 in a church

choir

Used company resources –

technology, plant, equipment

Sourced his own materials

Did his own market research

Did his own internal marketing

with brochures

Got his project groups

A person of influence

who guides, resources and

protects a specific intrapreneurial

project and its team

Sponsor

The Sponsor’s Role

Creating an inspiring overall vision

Choosing intrapreneurs and projects

Getting resources

Guiding and encouraging intrapreneurs

Removing obstacles

Rewarding the team

Need to guide

and control

Need to give

intrapreneurial

team freedom

The Sponsor’s Dillema

Climate Makers

Intrapreneurs

SponsorsIntrapreneurialTeams

Inventors &Idea People

Innovation

Innovation Drivers in an Organization

Most Compelling Reason

Empirical Evidence that Corporate

entrepreneurship improves company

performance

Increases firm’s pro-activeness and willingness to

take risks

Helps pioneer the development of new products,

processes, and services

Creating an Intrapreneurial Organization

New ideas encouraged

Trial and error encouraged

Failures allowed

No opportunity parameters

Resources available and accessible

Multidiscipline teamwork approach

Long time horizon

Volunteer program

Appropriate reward system

Sponsors and champions available

Support of top management

Entrepreneurial Organization

Entrepreneurial organization

promotes entrepreneurial activity

adapting structure, management,

and processes accordingly in order

to gain the required agility, speed,

creativity and drive to act profitably

upon specific opportunities.

From "Lead to Succeed", Colin Turner, 2002

Entrepreneurial Mentality

Defining Innovation Strategy

As startups begin with an idea for a product or service rather

than a comprehensive business strategy,

Behaving Like a Small Company

"a climate that makes individuals feel as if there is some room to

move, to try some dead-end paths, and to make some mistakes.“

It also involves making managers feel as if they have some

stake in the wins and looses.

Defining Right Reward Structures

"a high upside for the success, and at the same time a downside

for the failures help to encourage managers to stimulate an

entrepreneurial environment."

The Entrepreneurial Mindset

Entrepreneur V. Manager: Different Goals and

Motivations

Opportunity Driven Resource driven

Action oriented-moves

quickly

Constituency oriented-

evolutionary

Multistage process with

minimal exposure

Single-staged process with

firm commitment

Bootstrap resources Own resources

Flat Org Structure with

informal networks

Formalized hierarchy

Value-based Resource-based

Entrepreneurial and Intrapreneurial Facts

Driven by vision

Moderate risk takers

Persistent

Intuitive and analytic

Honest rule breakers

Face reality; use feedback

Psychological Factors

Entrepreneurs, Intrapreneurs,

Entrepreneurial Leaders

Need Achievements

Locus of Control

Tolerance for Risk

Tolerance for Ambiguity

Locus of Control

Locus of control refers to an individual’s belief

about what causes certain outcomes. It is

generally thought of as existing on a continuum

with internal at one end and external at the

other.

INTERNAL

LOCUS OF

CONTROL

EXTERNAL

LOCUS OF

CONTROL

I have considerable control

over the outcome in my life.

Success and failure is a

function of my ability and

effort.

I feel that outside forces such as, luck or fate, exert considerable control over the outcomes in my life

Inventing, Reinventing Organizations,

and Managing Change-

Entrepreneurial Perspective

Company Growth Stages, Funding and

Entrepreneurial Leadership Curve

INVENT

REINVENT

ORGANIZATIONAL

CHANGES

ORGANIZATIONAL

CHANGES

Technical expertise

Tech. team building/

leadership

Limited fundraising

Government

contracting

Business expertise hired

Tech. expertise critical,

but transitioning

Tech. strategic alliance

building

Build angel & institutional

relationships

FUND RAISING!!!

New Leadership?

Process Improvements /

New Products

Company / Employee

growth

Experience with IPO /

Acquisition

Growth Stages and Strategy

Jollibee Growth

0

5

10

15

20

25

30

35

19751979

19841988

19901992

19941996

19982000

20022004

Year

Bill

ion

Pe

so

s

IPO

10 Stores

100

Store

s

148 stores

Acquire

Greenwich

381 stores

Acquire

Chowking208 Stores

“The company

reengineers its

visual

identity system”

Acquires Delifrance

Jollibee successfully opens stores abroad:

Guam, Dubai, United Arab Emirates,

Kuwait, and Jeddah, and Kingdom of

Saudi Arabia.

Beefed up

R&D and

Marketing

“Jollibee must constantly tap new sources of revenue here and abroad, keep

opening stores, cut cost, sharpen its focus, and improve efficiency and technology.

In 2002, on top of cost-cutting, the company even resorted to increasing prices

(by about 4%) to keep its profit margins, an indication of brand strength;

in other words, the Jollibee group must keep reinventing itself to stay

ahead of competition and remain profitable”.- BizNews Asia

END