Erfolgreiche Implementierung von Corporate Startup Teams - Christoph Selig

© IST Institute

Corporate Startup Summit 20.10.2016 - Frankfurt

IMPLEMENTING CORPORATE STARTUPS TEAMS SUCCESSFULLY

Christoph Selig, Ph.D. candidate IST Innovation institut – focussing on strategic innovation with embedded entrepreneurial teams

Current Ph.D. candidate at institute for strategic innovation & technology management (IST) Leading research project – Corporate Entrepreneurship, embedded entrepreneurial teams Entrepreneurship program manager at HTWG Konstanz Coordinator of industry best-practice group in Baden-Württemberg

Academic background Master of Engineering industrial engineering HTWG Konstanz Bachelor of Engineering industrial engineering der HTWG Konstanz Exchange semester DTU Copenhagen focus on innovation and entrepreneurship

Profession background IST Institute since 2014 Festo AG – Marketing concepts for global marketing campaigns

inno-ist.org

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IST focusses on technology-oriented companies and their challenge in dynamic markets: Implementing strategic responsiveness

Firm 1: not successfulFirm 2: missing chancesFirm 3: sustained success with strategic responsiveness

Market parameters

timeMarket

Source: IST / CoPS, Walter Isaacson “Steve Jobs”

... creating an

“entrepreneurial

and

agile

organization” …

(Steve Jobs)


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Firms need to combine centralized efficiency of their core business with synergies from decentralized innovation: Ambidexterity

Source: IST / CoPS – Gard, Baltes, Katzy “Managing autonomy of teams in Corporate Entrepreneurship”, IAMOT 2013, Porto Alegre, Brazil

Entrepreneurial Teams Efficient hierarchy• Advantages from agility

based on flexibility & passion• Focus on investment in strategic

options, with risk & failure tolerance

• Incentives for experimental learning: „try early & fail cheap“

• Scaling based on intangible assets, technology capabilities and mobile market access

The “both-handed” ambidextrous organization

Industrial Core

• Advantages from stability, standardization, repetition

• Focus on planning, quality, processes, specialization

• Incentives for risk averseness, cost reduction, documentation

• Mass-produced physical-goods scaling by smarter automation & logistics

Strategic Innovation

Planning practices fail in disruptive context: Agile modes of trial & error are vital for building capability-based advantages

Planning vs. Agility / Adaptability Omitting need for prediction by

establishing trial & error modes of operation

Enable small errors with bearable losses but chance of over-proportional gain (convexity)

Optimize cost per unit of trial rather than a risk of failing to identify patterns & structures

“I did not fail! I just found ten thousand ways that didn’t work”*)

Source: Siemens AG / Pictures of the future 2013, * Edison, inventor of the light bulb, IST


The suitable organizational design is depending on the corporates’ position in the market and the technological knowhow

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Source: Burgelmann, R.; (1984) Managing the internal corporate venturing process | Garrett, R. P.; Covin, J.G.; (2015) Internal Corporate Venture Operations Independence and Performance

JointVenture

JointVenture

Acquisition

Base Related Unrelated

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ated

JointVenture

JointVenture

Internal Development

Acquisition

CorporateVenture

TECHNOLOGY / KNOWLEDGE

MA

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ET

Joint Acquisition – CVC

© IST Institut, M. Eng. Christoph Selig

Internal Corporate Venture

Joint Venture – BMW / Sixt

In such an environment Embedded Entrepreneurial Teams enable industrial organizations to successfully step into digital options

Formal decision making Risk averseness with

front-up analytics Problem solving with

consensus seeking Availability of resources

(capital, …) and access Elaborated processes Efficient administrative

backboneSource: Aldrich, E.H.; Auster, E.R:, 1986. Even Dwarfs Started Small. Liabilities of age and size and their strategic | Ireland, R. D., Covin, J. G., & Kuratko, D. F. (2009). Conceptualizing corporate entrepreneurship strategy // Tirole, J. (1986). Hierarchies and bureaucracies: On the role of collusion in organizations. | Chesbrough, H. (2000). Designing corporate ventures in the shadow of private venture capital | Baron, R. A. (2002). OB and entrepreneurship: The reciprocal benefits of closer conceptual links.

Low/no hierarchy, informal decision-making

Intuitive risk taking, illusion of self-control

Problem solving by proto- typing and experimenting

Scare resources, boots-trapping approach

Rather routines thanprocesses evolving

Start-up Organization

CorporateOrganization

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Minimal organization with links and pipelines to corporate

Analytical risk taking Problem solving without

a formal consensus seeking Structurally separated with

access to (some) corporate resources

Managing corporate Stakeholders …

Embedded Entrepreneurial Team EET


The interface between the embedded entrepreneurial team and the parent corporate has impact on the teams performance and success

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No blueprint for implementing corporate startups – highly individualized

Autonomyhigh strategic & structural auto-nomy positive performance

impact

Financing / Sponsorship bootstrapping,

stage-gate process, budget

Incentive, reward further career

options, financial interest, failure

culture

Network accesslinking pin, network internal experts and stakeholders, access to external partners

Roles of the advisory board trade off between demanding and

promoting

Shared Servicesaccess to admin and secretarial services, basic

function in team

Source: IST Institute – Corporate Entrepreneurship study Germany | Selig, C., Stettina, C., Baltes G. (2016): The Corporate Entrepreneur

The corporate entrepreneur differs significantly from entrepreneurs and corporate managers – but lends from both

Risk-averse, seeking stability Team orientation Leadership role Need for power Stakeholder management &

communication focus Analytical decision making, Efficiency & execution driven …

Risk-taking, tolerance for ambiguity Extrinsic motivation, egoistic Innovative, creative, visionary Need for achievement Full autonomy Intuitive decision making Effective & outcome driven …

Start-upentrepreneur

Corporatemanager

Source: Brandstätter, Hermann (2011): Personality aspects of entrepreneurship. A look at five meta-analyses | Zhao, Hao; Seibert, Scott E. and Lumbkin, G. T.; (2010): The Relationship of Personality to Entrepreneurial Intentions | Ciavarella, M. A.; et al. (2004): The Big Five and venture survival | Rauch, A., & Frese, M. (2007). Let's put the person back into entrepreneurship research | Busenitz, L. W., & Barney, J. B. (1997). Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making. | Dyer, J. H., Gregersen, H. B., and Christensen, C. (2008). Entrepreneur behaviors, opportunity recognition, and the origins of innovative ventures | Fagiano, D. (1997). Managers vs. leaders: A corporate fable.

Analytical risk-taking, reproducible problem solving

Intrinsic motivation (achievement) Entrepreneurial leader Need for autonomy Stakeholder management Transparent decision making Innovative initiator …

Corporate entrepreneur


First findings indicate corporate entrepreneur characteristics – with consequences for management, incentives and hiring schemes

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Source: Selig, C., Stettina, C., Baltes G. (2016): The Corporate Entrepreneur: A driving force for strategic renewal and radical innovation in established companies.

Team setting Decisive project leader role

Career Track Well educated, professional experience

Mgmt. style Cautious risk taking, problem solving, illusion of self-control

Financial motivation Within a corridor, no upside needed no downside acc.

Hygiene factorsAutonomy, individual impact, original creation

Corporaterelation Conscious & stra-tegic stakeholder management

Motivation Leave a mark – this project is “my baby”

Norms &ValuesHigh score on (family) values, trustable

Attractive career option for generation Y?


Cannibalization of the core business to master digital transformation to ensure sustainable competitiveness via implementing corporate startup

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Source: legic – homepage 2016 | CoPS - LEGIC Identsystems Ltd - From selling ID-cards to providing access to an ID network


Business: Product business – selling locks and ID-cards as a key

Threat: Replacement of ID cards through mobile devices, endanger existing business model

Challenge: Company needs to cannibalize their current core business (lock & key)

Solution: Implementing internal startup team – top down initiated to develop new business using new digital technologies

Learnings: external corporate entrepreneur supports internal change; top down support needed for overall corporate transformation

Contact information

M. Eng. Christoph SeligInstitut für Strategische Innovation & Technologiemanagement

Hochschule KonstanzBrauneggerstraße 5578462 Konstanz

[email protected]

Mob +49 176 8373 0797Tel +49 7531 206 310

© IST Institut, Prof. Dr. Guido Baltes, M. Eng. Christoph Selig Page 12