New ventures New ventures based on innovations require entrepreneurship and good management to work. The profile of the entrepreneur typically includes a need for achievement, a desire to assume responsibility, a willingness to take risks, and a focus on concrete results. Entrepreneurship can occur inside or outside large organizations. Outside entrepreneurship requires all of the complex aspects of the innovation process. Inside entrepreneurship occurs within a system that usually discourages chaotic activity.
Large organizations typically do not accept entrepreneurial types of activities. Thus, for a large organization to be innovative and develop new ventures, it must actively encourage entrepreneurial activity within the organization. This form of activity, often called intrapreneurship, usually is most effective when it is a part of everyday life in the organization and occurs throughout the organization rather than in the research and development department alone.
Corporate Research The most commom means of developing innovation in the traditional organization is through corporate research, or research and development. Corporate research is usually set up to support existing businesses, provide incremental innovations in the organization's businesses, and explore potential new technology bases. It often takes place in a laboratory, either on the site of the main corporate facility or some distance away from normal operations.
Corporate researchers are responsible for keeping the company's products and processes technologically advanced. Product life cycles vary a great deal, depending on how fast products become obsolete and whether substitutes for the product are developed. Obviously, if a product becomes obsolete or some other product can be substituted for it, the profits from its sales will decrease. The job of corporate research is to prevent this from happening by keeping the company's products current.
The corporate culture can be instrumental in fostering an environment in which creativity and innovation occur. For example, 3M is a company known for its innovation. From 1914 to 1966 its scientists developed masking tape, Scotch tape, Scotchguard fabric protector, and Thinsulate material. The company allowed employees to spend up to 15 percent of their paid time on any projects they chose. By 2001, however, it was taking years for new products to come to market, manufacturing was inefficient, and profits were almost nonexistent. A new CEO, Jim McNerney, was brought onboard; his new initiatives included Six Sigma quality training, forced performance rankings and cost efficiency measures throughout the company. Problems soon arose: the new approach reduced not just costs but innovation as well. The number of new products on the market slowed even more, and by 2005 Mr. McNerney left the company, replaced by George Buckley. Mr. Buckley immediately increased the research and development budget by 20 percent, but his most important task is to restore the innovative culture that is the company's heritage.