Joe Abi Akl is the acting chief corporate development officer at UAE-based Majid Al Futtaim, developers of shopping malls and communities across the Middle East
Corporate entrepreneurship is a buzzword many companies pay lip service to but few have actually got ‘nailed down’.
“He would say that,” you may think, coming from a company that was built by an entrepreneur. And you’d be right - to a point.
Our founder invested in concepts that were completely new to Dubai and the Middle East and North Africa (Mena) region. In many ways, it made little financial sense given that nobody knew what the take-up of hypermarkets, shopping malls or snow parks would be.
And that is what entrepreneurship is about – being in it for the long-haul, taking risks and having an indestructible self-belief. But as a business expands and matures, the focus shifts increasingly towards managing day-to-day operations, and innovating becomes harder. There is a risk that the culture of entrepreneurship turns into a culture of performance.
Striking the right balance between the business running like clockwork and retaining a startup mentality is critical. It is all too easy to default to the former. This means you actively need to instigate disruption from within, among your team, but also outside.
Here are four core areas to consider when shaping your corporate entrepreneurship ‘scorecard’.
1) What do you want to be?
Corporate leaders often express their desire to be disruptors – because that is what they think people want to hear, and how they would like to be perceived. Innovation needs not be disruptive by default. Disruption is the tough end of the innovation spectrum.
But if you are not a disruptor, where do you want to sit on that spectrum? Are you a forwarder of other people’s innovations, or maybe more of a fast follower? There is no shame in choosing whether to follow rather than disrupt. But your choice will determine your approach – so it is imperative that you make a decision.
2) To jump or not to jump on the bandwagon
Building on existing innovation can be a valid route to success. But it is vital to have deep knowledge of your market before jumping on the bandwagon. Take the following example: many companies are focused on developing their digital propositions to capture the imagination of today’s digital natives.
But if we look at those audiences, as much as they ‘live’ online, their need for real-world experiences is still strong. In the Middle East in particular, audiences greatly value experiences that can be shared with family and friends. While digital channels can simplify booking a restaurant or cinema visit, they cannot provide that shared experience. What this means is that if companies get too engrossed with one trend, they may well jeopardise other opportunities.
It is easy to go down this slippery slope if innovation is too tightly wound up with the day-to-day business – which leads me to my next point.
3) Do not mix innovation and ‘business as usual’
Creating change at scale - not just incremental innovation – means changing how you operate. This may seem obvious, but it can easily become a real challenge in an established company.
The skillset for managing an existing business is quite different from the one you need for incubating a new line of business. Process focus and risk-averseness are good characteristics for the former, but a roadblock for the latter.
A business you’re incubating is often vastly different from your core business. Mix the two, and inevitably, targets and responsibilities for the current business will push innovation to the bottom of the list. Our experience at Majid Al Futtaim shows that creating completely separate structures and targets for the incubated business reaps the best results.
4) Creating the right ecosystem for incubation
In setting up a new business, it is important not to create an innovation silo. In the past, innovation used to be about intellectual property that you could ringfence and sell. As such, innovation was highly protectionist: ideas and people were hidden from the rest of the company - and the world - until a new product was ready.
Nowadays, hardly anyone believes that innovation happens in an ivory tower. Increasingly, it is the result of partnering with other members of the supply chain, external experts, startups, the public sector and government. It may even involve competitors – just think of the Nissan-Renault-Mitsubishi Alliance for electric and autonomous vehicles.
Companies need to nurture ‘entrepreneurship ecosystems’ that bring together the right skills, experiences and connections from within and outside the company. This approach has distinct benefits for the core company – new ideas, capabilities and technologies that do not have to be developed in-house. But it also helps the other members of the ecosystem. It is mutually beneficial.
Encouraging ‘ecosystem entrepreneurship’
You will note that my list does not include a call to action for government or policymakers. While a supportive regulatory environment helps, developing an entrepreneurship ecosystem is all about what corporates can do for themselves to create the right culture and structures – both in-house and by networking.
This also extends into the wider community, where corporates need to work much more on developing the innovators of the future – through their own internal development programmes, graduate or university schemes, or even by working with schools. This open approach to entrepreneurship unlocks greater benefits not only for the corporate but for its wider network. After all, the whole ecosystem is greater than the sum of its parts.