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Chapter 13

Chapter 13. Assessing Entrepreneurial Performance. Assessing Entrepreneurial Activity. Managers must assess and track entrepreneurial activity and outcomes Attention must be devoted to evaluate individual projects as well as the organization as a whole Managers need to assess:

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Chapter 13

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  1. Chapter 13 Assessing Entrepreneurial Performance

  2. Assessing Entrepreneurial Activity • Managers must assess and track entrepreneurial activity and outcomes • Attention must be devoted to evaluate individual projects as well as the organization as a whole • Managers need to assess: • Cognition (way of thinking) • Behavior (way of acting) • Firm Performance (profits, revenue growth, etc.)

  3. A Systematic Approach Managers must evaluate their current entrepreneurial intensity (EI) before developing strategy for entrepreneurship or designing the internal environment Measurement at the individual level helps managers: • Examine and refine their own leadership styles Measurement at the organizational level: • Mark and track company-wide entrepreneurial performance, establish norms and draw industry comparisons

  4. The Entrepreneurial Health Audit A three stage Entrepreneurial Health Audit, developed by Ireland, Kuratko, and Morris, attempts to measure entrepreneurship within a company

  5. The Entrepreneurial Health Audit • Step 1: Assessing the Firm’s Entrepreneurial Intensity (EI) • Table 13-1 includes a proven measurement instrument for assessing EI within a firm

  6. The Entrepreneurial Health Audit Step 2: Diagnosing the Climate for Corporate Entrepreneurship The Corporate Entrepreneurship Climate Instrument (CECI) Table 13-2 is a diagnostic tool for assessing, evaluating, and managing the internal environment of the firm in a manner that supports entrepreneurship

  7. The Entrepreneurial Health Audit • The Elements: • Management support • Willingness of management to support ENT behaviors • Work discretion/autonomy • Top management’s ability to tolerate failure, delegate authority, macro-manage, etc. • Reinforcement • Using systems that reinforce ENT behavior • Time availability • Ensure individuals have time to pursue new ideas • Organizational boundaries • Clear expectation of outcomes

  8. The Entrepreneurial Health Audit • Step 3: Create an organization-wide understanding of the CE/Innovation process • The entrepreneurial experience • Entrepreneurial breakthroughs • Innovative thinking • Idea acceleration process • Barriers, facilitators, and triggers to entrepreneurial thinking • Sustaining innovation teams • The Corporate Venture Plan

  9. Idea Generation Financial assessment Concept testing Test marketing Technical feasibility assessment Launch Product testing Life cycle management How Entrepreneurial Projects Evolve • The New product or service development process usually does not evolve neatly • However, there are key steps that generally must be accomplished to produce a commercially viable new product, service, or process

  10. Measuring Innovation Performance in Projects Companies can become overwhelmed with too many metrics. However, the more typical problem is too few performance measures The Yellow Light Variables Approach developed by Balachandra, identifies 14 variables that were critical in all “go/no go” decisions by managers Less than 11 “yes” answers may spell trouble Other “right” questions on p. 378-379

  11. Developing a Comprehensive Corporate Venture Plan • Describe every aspect of a particular venture • Include market research • Clarify and outline financial needs • Identify potential obstacles and alternative solution • Establish milestones for continuous and timely evaluations • Serve as a communication tool for all assessments purposes An effective corporate venture plan will:

  12. Developing a Comprehensive Corporate Venture Plan Table 13-6 lists several helpful hints for developing a corporate venture plan Table 13-7 lists the components of a comprehensive corporate venture plan

  13. Sustainable Entrepreneurship: A Dual Focus • Sustainable innovation is the goal of the ENT firm • Difficult and requires commitment and discipline • Companies can approach improvement in one of two ways, together • Constant incremental improvement • Radical innovation

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