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'Fortune 500 Companies Seek StartUp Mojo'...And Promptly Look In The Wrong Place

Jan 8 2014, 4:51am CST | by

'Fortune 500 Companies Seek StartUp Mojo'...And Promptly Look In The Wrong Place

Photo Credit: Forbes
 
 

You may have missed it over the holidays, but The Wall Street Journal had a fascinating blog about big companies and entrepreneurship.

Rachel King wrote:

“In 2013, corporations worked to create closer relationships with startups in order to spark technological innovation. This year [2013], it seemed, many companies fully embraced the idea of open innovation, which advocates innovating with partners.

“To do that, they opened innovation centers in Silicon Valley and elsewhere, attended innovation conferences and created immersive accelerator programs to give various business units the chance to learn from entrepreneurs.”

If there is nothing wrong with any of that–and there really isn’t–why did I use the snarky headline that I did?

That’s simpleTaking “a safe” approach, as these companies did in opening innovation centers in the heart of innovation country and going to conferences is fine, but when it comes to innovation, most big companies need to be doing more than playing it safe.

They need to become more entrepreneurial themselves.

By (sort of) partnering, they have taken a second-hand approach to solving the problem, instead of dealing with it directly (by creating an entrepreneurial culture interally.)

Yes, I know.  Creating an entrepreneurial culture within a large company is, to say the least, difficult. But as I have written about before in a different context, it can be done.

The Same But Different

The basics of entrepreneurship are the same whether you are on your own or working for a large corporation.

As we have said throughout, successful entrepreneurs:

* Begin by being clear on what they want to do, i.e. they understand their desire, their end goal

* Then, they take a small step toward finding or creating something that will allow them to capitalize on that desire. They then

* Learn from taking that small step. And then they

* Build off that learning and take another step.

* They learn from that one…and so on

It’s a model that we call: Act. Learn. Build. Repeat. and it works in corporate and non-corporate settings.

Where it differs is how you deal with risk. In the model you noticed we said you take a “small step” toward your goal. The reason we specified small is that you never want to risk more than you can afford to lose. And for the corporate entrepeneur, the risk has two parts–tangible and non-tangible.

The tangible is simple. You never want to lose corporate money. So the question is how do you keep the cost low, not only for the overall project, but for each step along the way?

And then there is the intangible, i.e. your reputation. How do you protect your reputational capital, something that is extremely important inside the organization. You want your foray to enhance it or at least not put any of it on the line.

This is the point where I think big companies are falling down.  They need to accept that entrepreneurial efforts, just like any other corporate initiative, might fail and they need to make it clear to everyone involved that their careers will NOT be damaged, if they are part of something that does not work out despite their best efforts.

Until that message becomes clear, we will continue see big companies take tentative steps, as described in The Journal article.

Our best companies should be better than that.

###

Paul B. Brown is the co-author of Just Start: Take Action; Embrace Uncertainty and Create the Future.

This blog now apears every Wednesday and Saturday.

Click on the “Following” button to receive the blog as soon as its goes live.

Source: Forbes

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