Beyond startups: Entrepreneurial thinking in corporations
Classic entrepreneurial thinking -- creating new markets for entirely new products -- can be a route to failure at large corporations, even when very well managed, a senior Boeing executive told a Princeton audience Nov. 13.
Walter Skowronski (left in photo), president of Boeing Capital and senior vice president of Boeing Corp., spoke about corporate entrepreneurship at the last of five workshops on applying the principles of entrepreneurship in settings other than start-up companies.
Calling Boeing an exceptionally well run company and an "absolute powerhouse when it comes to technology," Skowronski described several of the company's entrepreneurial initiatives that ended well short of original expectations, from a $200 million fund for seeding spin-off technology ventures to a new system for air traffic management. All were attempts to significantly increase revenue -- or "move the needle" -- at a company that already has more than $60 billion in annual revenues.
Boeing launched a number of new ventures and initiatives earlier this decade. Many ended the victim of bad timing, either a) being ahead of their time, or b) caught in the downdraft of major economic shifts. Others simply lacked the appropriate resources or expertise required for success.
Large corporations often can find it hard to justify spending money and using their best executives for ventures that might have large absolute, but small relative pay-offs, he said. "The numbers get lost in the rounding. A successful new venture could be a grand slam for the people who did it, but may bring very little value for Boeing."
"If you can bring your existing technology to new customers, you're probably going to be ok," Skowronski said. "Or you can bring new technology to existing customers. What you don't want to do is bring new technology to new audiences. That's often a recipe for disaster."
Instead of trying to reproduce the success of go-for-broke young companies, large corporations in search of new ideas may do better to acquire other companies that have already developed an innovative idea.
"We are great at going out and picking companies that are a little more mature," Skowronski said of Boeing. "We fit them into our business and they dovetail very, very well."
The workshop series, titled "Harnessing the Power of Entrepreneurship," was led by Julian Lange (right in photo), the Dean's Visiting Professor in Entrepreneurship at Princeton's Center for Innovation in Engineering Education. Lange, a professor of entrepreneurship and public policy at Babson College, also led sessions on the subjects of entrepreneurship in government, economic development, non-profit organizations and higher education.
In the spring 2008 semester, he will teach a new course titled "Managing High-Growth Entrepreneurial Ventures."