404 ENTREPRENEURSHIP
Principle #4 is to get the sequence of strategy right. The correct sequence is:
Buyer Utility ÆPrice ÆCost ÆAdoption
This sequence brings us back to the strategy canvas and the new value curve. The first
step is determining whether and how buyer utility has been increased. Next, the prod-
uct is priced. This requires costing the product to determine projected margins. If they
are acceptable (and economies of scale can generate increasing margins over time), the
product can be adopted.
Principle #5 is to overcome organizational hurdles, and Principle #6 is to build exe-
cution into the strategy. These matters have already been covered—Innovator’s
Dilemmas, Innovator’s Solutions, IDEO methodology, etc.GUIDELINES FOR SUCCESS
Intrapreneurship does not work without radical changes in the thinking of corporate
managers and their stockholders.^49 Even when these changes have been implemented,
successful intrapreneurship can develop only after the corporation has gained some ex-
perience and learned some lessons from the market.^50 Top corporate executives must
nurture the atmosphere and supply the vision necessary to encourage intrapreneurial
activity.^51 A number of frameworks and processes offer guidelines for success, but the
actual process is somewhat idiosyncratic. It is not the same everywhere and recipes can-
not be too closely followed. Context counts. If successful intrapreneuring could be
reduced to a formula, everyone would do it successfully. This would be the intrapreneur-
ial paradox, paralleling the entrepreneurial paradox of Chapter 2. Guidelines, however,
can help, and they come out of different sources and contexts.
Innovator Solutions
Christensen (1999) made a significant contribution by recognizing why large organiza-
tions were so poor at corporate venturing that entailed disruptive technology. They
could not make decisions that seemed to go against the very factors that made them suc-
cessful—listening to customers; improving products and services; selling better, cheap-
er goods faster to a growing mass of consumers. But in the Innovator’s Solution(2003)
he offers his most fundamental advice: Separate the corporate venture from the main
body of the corporation. Keep it as a stand-alone entity. Take an equity position and/or
find partners to help with financing and operations. Put the best innovators and
intrapreneurs in the new venture and structure incentives that let them act as entrepre-
neurs. Of course, the corporation should also continue making sustaining innovations
to their older products. The modern corporation needs to be good at managing both
sustaining and disruptive change.Freedom Factors
Intrapreneurs practically need a bill of rights to set them free and let them simulate the
external entrepreneurial environment within the organization. These freedom factors,
developed by Pinchot (1985), are: