Entrepreneurship and intrapreneurship

1. Entrepreneurship and
Intrapreneurship
Rey Lugtu
www.reylugtu.com

2. Model of Organizational Culture Types

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

4. Key Activities
Identifying an opportunity
Visioning
Exploiting or developing this
opportunity
Running a new business successfully

5. 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

6. 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.

7. The Process
Recognition of
an opportunity
Deciding to
Proceed &
assembling
resources
Launching a
new venture
Building
success
Harvesting
the rewards

8. Entrepreneurs’ Main Motivators

9. 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

10. 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

11. “The intrapreneur is an
essential ingredient in
every innovation.”
- Dr. William Souder
10 year life cycle study of 289
innovations in 53 companies

12. 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

13. 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

14. Intrapreneurial Organization
Example: 3M - Improvising
15% 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.

15. 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

16. A person of influence
who guides, resources and
protects a specific intrapreneurial
project and its team
Sponsor

17. The Sponsor’s Role
Creating an inspiring overall vision
Choosing intrapreneurs and projects
Getting resources
Guiding and encouraging intrapreneurs
Removing obstacles
Rewarding the team

18. Need to guide
and control
Need to give
intrapreneurial
team freedom
The Sponsor’s Dillema

19. Climate
Makers
Intrapreneurs
SponsorsIntrapreneurial
Teams
Inventors &
Idea People
Innovation
Innovation Drivers in an Organization

20. 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

21. 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

22. 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

23. 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."

24. The Entrepreneurial Mindset

25. 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

26. Entrepreneurial and Intrapreneurial Facts
Driven by vision
Moderate risk takers
Persistent
Intuitive and
analytic
Honest rule
breakers
Face reality;
use feedback

27. Psychological Factors
Entrepreneurs, Intrapreneurs,
Entrepreneurial Leaders
Need Achievements
Locus of Control
Tolerance for Risk
Tolerance for Ambiguity

28. 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

29. Inventing, Reinventing Organizations,
and Managing Change-
Entrepreneurial Perspective

30. 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

31. Growth Stages and Strategy

32. Jollibee Growth
0
5
10
15
20
25
30
35
1975
1979
1984
1988
1990
1992
1994
1996
1998
2000
2002
2004
Year
BillionPesos
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

33. END