Implementing by Part or by Whole
Most organizations are not conglomerates, and so implementing corporate entrepreneurship to the degree it was used at XPARC or GE makes little sense. But the “peer as client” strategy outlined above was an example of how entrepreneurial tactics can be employed to a lesser degree for benefit. In places where entrepreneurial approaches might prove useful, an entrepreneurial environment will encourage their establishment.
An effective entrepreneurial environment will allow business units to develop the three principles outlined above. Several important techniques may be employed to encourage this development:
Teams driven by small, specific purposes, rather than large complex ones, often find themselves more clearly driven by purpose. If multiple purposes are at play within a unit, it is difficult for the unit to effectively measure performance and hence be flexible. Team membership should be directly tied to purpose, so as to keep the business unit smaller and more flexible.
This is contrasted against a team-to-hierarchy approach, where many stakeholders would be included in the operation of a team in order to represent their interests. A proper purpose should be one which satisfies all stakeholders in its fulfillment, and will invariably include input from all stakeholders. But only if the execution of purpose demands their participation are stakeholders included in the entrepreneurial unit’s operations.
2. Focus Communication
Communication between and among business units is a positive and necessary activity. But business units which are structurally independent generally require a fewer number of communication channels than those who are structurally dependent. An environment of focused communication will engender the development of structurally independent units.
This is not to suggest that employees themselves should be constrained in their ability to communicate freely, but rather that communication between business units should be consolidated in so far as this is possible.
Communication between one unit and another can be described as any type of correspondence which is required for the operation of one or both. Approvals, notifications, orders might all be examples of this communication. Focused communication within a corporation specifies the structural boundary: if the channel is available the business unit may utilize it, if not the business unit must find a way to do it internally.
3. Provide Tools for Measurement and Analysis
Internal flexibility depends upon effective measurement and analysis. Strategies like Six Sigma have recognized this need and place performance measurement at their center. Providing tools that accurately measure performance is essential in creating an entrepreneurial environment.
Most corporations have several different performance measurement programs in place. Unfortunately, a large majority of these programs are used only for decision-making at the very highest management levels. Measurement tools are most effective when used close to the action. Arming business units with powerful measurement procedures increases their internal flexibility by making them more immediately adaptable.