Cultivating Corporate Entrepreneurship: Unlocking Hidden Resources for New Ventures

In 2024 McKinsey research revealed that launching new ventures has become one of the top priorities for over 60% of CEOs. Even more strikingly, almost 90% of them believe their organizations have untapped resources and opportunities. These include internal competencies, technologies, or products that could be commercialized externally or adapted for new markets.

However, the question arises: how prepared are companies to unlock this potential? According to Gallup, global employee engagement remains low, at just 23%. This casts doubt on organizations’ ability to fully activate their internal resources through corporate entrepreneurship.

Corporate entrepreneurial culture, if well-developed, manifests in companies’ ability to regularly launch and scale new ventures. Yet, if these processes are irregular or absent, it may indicate insufficient practices, mechanisms, and competencies in this area.

Thus, the challenge stands: are companies ready to respond to the call for new ventures? Do they have enough entrepreneurial competencies, experience, decision-making models, and processes to effectively tackle this challenge?

This article is based on my experience in fostering corporate entrepreneurship. It offers an analysis of barriers and recommendations for building a culture that enables companies to fully leverage their internal potential and successfully launch new ventures.

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Part 1: Untapped Potential – Realizing the Opportunity

For convenience, this article presents the story of a single company. In reality, it represents a generalized image of several organizations I have worked with. All examples and facts referenced are drawn from real-life cases.

During my experience with one such company, I observed that even the most successful organizations with talented employees and advanced technologies often fail to fully utilize their innovation potential.

This particular company had an exceptionally rigorous recruitment process, with a ratio of 1 to 500 applicants per position. As a result, it boasted a workforce of highly competent individuals capable of tackling the most complex challenges. Moreover, the organization provided competitive salaries, comprehensive benefits, and ample opportunities for professional development.

However, despite these favorable conditions, leadership recognized that the team's innovation potential remained underutilized. While continuous improvement practices thrived in production functions, similar attempts in commercial and support functions failed to yield the same results.

This realization served as a catalyst for change: the need to activate latent potential and create an environment where employees' innovative ideas could flourish became evident. To achieve this, the company established a corporate innovation function and formed a team of "catalysts"—internal consultants who supported entrepreneurial initiatives at every stage, from identifying opportunities to delivering results.

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Part 2: First Steps, First Barriers – Adapting Our Approach

The success of a corporate entrepreneurship program depends not only on engaging employees but also on the approach taken during the initial stages—specifically, identifying entrepreneurial potential. At first, the project team decided to use tests, screenings, and other assessment tools to select future intrapreneurs. The logic seemed sound: identify the most promising candidates and make them the foundation of the program.

However, experience revealed that this approach was flawed.

1. "Chosen" Employees. Those selected through these methods often perceived themselves as "chosen" and showed little independent initiative. They waited for invitations or incentives, leading to a lack of proactivity and ownership.
2. Resistance from Others. Employees who weren’t selected felt excluded and undervalued. This led to misunderstanding the program’s goals, skepticism, and even passive resistance.

This experience prompted a change. The program was opened to all employees, allowing anyone to propose ideas and participate in initiatives.

However, a new challenge arose: many proposals followed the "monkey-shifting" principle. Employees suggested ideas that required action from other departments, colleagues, or managers rather than taking responsibility themselves.

To address this, the company introduced new rules:

• Ideas requiring actions from others were reviewed last and were not mandatory for execution.
• Proposals where the authors were willing to test, improve, or implement solutions themselves received priority.

This shift quickly yielded results: the quality of ideas improved, and employees became more actively involved in the process.

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Part 3: Overcoming Barriers and Engaging the Majority

Despite the positive changes, new challenges emerged during the early stages of the corporate entrepreneurship program.

Challenge 1: The "Silence" of the Majority While a significant number of applications were submitted, only 30% of employees remained actively involved. Often, these were the same individuals who had participated in previous initiatives. Meanwhile, two-thirds of the workforce remained passive, indifferent, or seemingly uninterested.

Causes of Passivity:

1. Fear of Negative Judgment. Many employees hesitated to propose ideas due to fear of criticism from colleagues or managers.
2. Complexity of the Process. The idea submission process was perceived as intimidating, unclear, and too time-consuming, discouraging potential participants.

How We Addressed These Barriers:

1. Private Submission Formats. Employees could share their ideas directly with catalysts without preparing formal proposals. Catalysts helped transform these initial thoughts into clear, professional projects.
2. Training in Opportunity Assessment. We developed a system to structure and logically justify proposals: Quantifying the size of the problem or opportunity in monetary terms. Identifying key beneficiaries within the company (e.g., whose KPIs would benefit). Aligning proposals with the company’s strategic priorities. Evaluating implementation speed, complexity, and cost.

This transparent evaluation system not only helped prioritize ideas but also provided constructive feedback to employees whose proposals didn’t rank highly. This reduced frustration and encouraged them to refine their ideas, making them more valuable.

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Part 4: Catalysts – The Backbone of Corporate Entrepreneurship

One of the most critical components of a successful corporate entrepreneurship program was the creation of a support function. Without it, building a corporate entrepreneurial culture would have been impossible. This function was performed by internal consultants, whom we called "catalysts."

Who Are Catalysts? The first catalysts were employees who had already proven themselves as successful corporate entrepreneurs. Their ideas had gone through all stages of implementation—from identifying opportunities to delivering tangible results. Their experience provided them with a deep understanding of the nuances of corporate entrepreneurship, making them ideal candidates for this new role.

Initially, some of these employees combined their responsibilities as catalysts with their primary duties. However, as the program expanded, these individuals transitioned to full-time roles, becoming the foundation of the corporate entrepreneurship support system.

How We Developed Catalysts: To ensure they could effectively perform their roles, catalysts underwent additional training, which included:

1. Facilitation: Organizing team collaboration and creating conditions for productive discussions.
2. Coaching and Mentorship: Techniques for guiding employees in developing and implementing their ideas.
3. Business Modeling: Designing and testing new business models for corporate entrepreneurs’ ideas.
4. Design Thinking: Creative approaches to solving complex problems.
5. Project Management: Planning, executing, and evaluating projects within the program.

Organic Growth of the Role As the program expanded, the role of catalysts evolved organically. New catalysts emerged from active participants in the corporate entrepreneurship program, often becoming serial corporate entrepreneurs themselves. This system created a self-sustaining cycle of knowledge, experience, and support, gradually involving more and more employees across the company.

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Part 5: Gamification to Engage Non-Innovators

While previous efforts addressed artificial segregation within the program, a new challenge emerged: natural segregation.

Natural Segregation: Why the Majority Remains Uninvolved Despite the program’s success, most employees remained uninvolved. While some actively submitted ideas, created prototypes, and tested solutions, the majority did not participate. They didn’t see themselves as entrepreneurs or innovators and didn’t exhibit proactive or creative behaviors.

This phenomenon is common in many organizations: not all employees naturally identify as innovators. The question arose: how could we engage those who didn’t see themselves in these roles?

The Solution: Gamification Through Investment We discovered a way to engage these employees through a gamified investment system:

1. Employees who were not ready to create their own corporate startups were invited to "invest" virtual currency in their colleagues’ projects.
2. This virtual currency, allocated from the company’s budget, was converted into real investments for prototyping and testing ideas.
3. If the project succeeded, employees received real dividends as monetary rewards. If it failed, they lost nothing since the funds belonged to the company.

Outcomes of Gamification:

1. Increased Engagement. More employees became involved in the entrepreneurial movement.
2. Smooth Transition to Active Participation. Observing colleagues’ projects helped employees see that corporate entrepreneurship was accessible.
3. Participation as Experts. Investors began contributing their knowledge to enhance project outcomes.

Over time, some employees who started as investors gained the confidence to propose and lead their own projects, spreading the entrepreneurial spirit across the organization.

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Part 6: Engaging Leadership—How Top-Down Support Drives the Entrepreneurial Movement

While previous sections focused on engaging employees from the bottom-up, it is equally important to ensure strong support from leadership.

Why Leadership Support Is Critical Any transformation within an organization requires robust backing from top management. Without a clear mandate from those with the most authority, meaningful progress is unlikely.

However, engaging middle management posed an additional challenge. It was essential to convince them that participating in the corporate entrepreneurship program was not only necessary but also beneficial. At the same time, the tools used for engagement needed to rely on principles of "soft power"—minimizing the use of managerial authority or personal requests.

The Tool: Corporate Entrepreneurship Dashboard To address this, we developed an online dashboard that transparently displayed the results of corporate entrepreneurship activities. Leadership sponsors of the program were tasked with highlighting these data points during:

• Executive meetings.
• One-on-one discussions with their direct reports.

What the Dashboard Displayed:

• The cumulative monetary value of opportunities identified by employees (e.g., cost savings or growth potential).
• Alignment of ideas with the company’s strategic priorities.
• The potential to address current business challenges.

Case Study: Leveraging the Dashboard for Better Decisions One example comes from the sales department: Due to heightened competition, the company experienced a decline in the quality of its retail distribution (i.e., product availability in stores). This led to reduced sales and lower profits.

At an executive meeting, the sales director proposed hiring additional sales representatives to address the issue. The solution involved significant costs for recruitment, training, and operational integration, with an estimated implementation timeline of six months.

Before approving the budget, the CEO asked: "Have employees suggested any alternative solutions to this issue?"

Using the dashboard, the leadership team filtered proposals related to sales. One idea stood out: automating the document flow for sales representatives. Employees had identified that up to 50% of a sales representative’s time was spent on administrative tasks.

Preliminary evaluations showed that automating these processes could:

• Reduce administrative time by one-third, freeing up more than enough time to address the distribution issue without additional hires.
• Cost the equivalent of three months’ salaries for the proposed new hires.
• Be implemented in just two months.

This alternative was presented to the sales director, who had no rational arguments to oppose it. The automated solution was approved for prototyping and testing.

Impact of Implementation Within two months, the experiment showed slightly lower results than projected, but it still resolved the distribution issue. It was also far cheaper and faster than expanding the sales team.

This success turned the sales director, a former skeptic, into an active supporter of the corporate entrepreneurship program. Entrepreneurial initiatives flourished in the sales department and inspired leaders from other departments to explore entrepreneurial solutions for their challenges.

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Part 7: A New Approach to Evaluating Ideas—Breaking Down Leadership Bias

Traditionally, decisions about employee ideas were made by evaluation boards composed of leaders from various levels and functions. Employees were expected to "sell" their ideas, proving their value to decision-makers.

This approach had significant drawbacks:

1. Demotivation of Innovators. Employees felt that their ideas were rejected due to subjective preferences or the limited experience of decision-makers.
2. Limiting Innovation Potential. Ideas that challenged the status quo often struggled to gain support, leaving the organization stagnant.

Involving Experts in the Evaluation Process In addition to leaders, these boards often included subject-matter experts such as legal advisors, financial controllers, and compliance officers. Early on, many of these experts dismissed ideas without providing detailed explanations. This lack of feedback demotivated employees, who often refrained from proposing new ideas after their initial submissions were rejected.

However, the problem wasn’t the rejection itself but the way it was communicated.

What We Changed To address this, we introduced several key modifications:

1. Renaming the Committees. The evaluation boards were renamed from "control committees" to "enabling committees." This reflected a shift in purpose: instead of merely approving or rejecting ideas, the committees were tasked with enabling employees to refine and advance their proposals.
2. Mandatory Feedback with Solutions. When ideas conflicted with legislation or company policies, committees were required to provide constructive feedback. Instead of a simple "no," they had to specify: What barriers needed to be removed for the idea to be feasible. If the issue was related to company policies, the feedback included guidance on how employees could navigate the process of amending those policies.
3. Empowering Innovators. The decision to proceed with overcoming barriers was left to the innovator. For example, if realizing the idea required policy changes, the employee could choose to engage in the process of amending corporate policies. This shifted the responsibility back to the innovator, fostering a sense of ownership and accountability.

Results of the New Approach This shift in how feedback was provided led to significant changes in employee behavior:

• The percentage of repeat ideas from employees who had previously faced rejection doubled.
• Innovators felt more empowered and supported, increasing their willingness to refine and resubmit ideas.

By redefining the role of these committees and fostering a culture of constructive feedback, we observed a dramatic improvement in engagement and innovation outcomes across the organization.

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Part 8: Recognizing the Value of Failure—The "Capital of Failure"

Like many other organizations, this company initially adhered to a "mandatory success" philosophy. Discussions of mistakes were avoided, and analyzing failures was often taboo.

Introducing the Concept of "Capital of Failure" To change this mindset, we developed the concept of the "Capital of Failure":

1. Valuing Failed Experiments. Outcomes from unsuccessful experiments or infeasible ideas were treated as valuable assets.
2. Avoided Losses as Assets. These results demonstrated the potential losses the company avoided by testing ideas on a small scale before full implementation.

How It Works: The "Capital of Failure" turned failures into learning opportunities, reducing fear and promoting a culture of experimentation. The concept showed that the experimental approach protected the company from significant losses while enhancing its resilience.

Quantifying Risks Through Experiments A common misconception in many organizations is that innovation is inherently expensive and risky. To challenge this stereotype, we conducted financial audits on experimental results. The audits confirmed:

1. Risk Reduction. Prototyping and testing significantly mitigated investment risks.
2. Cost-Efficient Scaling. Ideas that underwent thorough testing required lower implementation costs because risks were better understood and managed.

This realization helped leaders see that experimentation not only minimized risks but also attracted cheaper capital, making investments in scaling such initiatives more financially attractive.

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Part 9: A New Organizational Culture

If you want to understand what truly drives your company, listen to conversations in informal spaces like the break room, kitchen, or cafeteria. In many organizations, these discussions are often filled with complaints—criticisms of management, frustrations with colleagues, or dissatisfaction with decisions.

A Surprising Transformation In one company, just three months after implementing the corporate entrepreneurship system, I overheard a conversation that caught me off guard.

A sales employee was venting frustration about a new trade marketing program: "These trade marketing guys came up with another unrealistic program for retail partners! And now we’re the ones left to deliver results. This isn’t how it should be done!"

I expected the usual response—agreement and further complaints. Instead, the colleague replied: "Why don’t you propose your solution through the corporate entrepreneurship program? Look, I got tired of waiting for the IT department to automate our vehicle usage reports, so I suggested a solution last month. By next month, we’ll have a system that lets us generate reports with just two clicks. You could use your expertise in trade marketing the same way—think like an entrepreneur!"

The Power of Transformation This moment became one of the most emotional milestones in my career as a corporate entrepreneurship advisor. It showed how entrepreneurial culture changes employee mindsets, turning complaints into constructive action.

This underscores that corporate entrepreneurship is more than just innovation or business projects. It’s about cultivating a new way of thinking where employees see themselves as agents of change and inspire others to do the same.

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Conclusion: Building a Sustainable Culture of Corporate Entrepreneurship

Fostering Entrepreneurial Culture: A Path to Long-Term Success Developing an entrepreneurial culture in a company requires patience, persistence, and a structured approach. It is essential to avoid artificially dividing employees into "born entrepreneurs" and everyone else. Instead, companies must provide opportunities for every employee to reveal their potential over time. Experience shows that true entrepreneurial talent isn’t defined by formal tests but emerges through real actions.

Gamification as a Tool for Engagement For those who may hesitate to adopt entrepreneurial behaviors, gradual pathways for involvement are key. Gamified systems, such as corporate crowdfunding or other light participation formats, can serve as a starting point. Over time, even employees who initially seemed disconnected from innovation and creativity begin launching their own corporate startups.

Resources as a Litmus Test Avoid overwhelming corporate entrepreneurs with excessive resources or overly supportive structures early on. Allow them to navigate initial challenges and prove themselves. My experience demonstrates that employees who take the initiative to start independently—conducting initial research, reaching out to catalysts, and collaborating with experts—are eight times more effective than those "appointed" to lead corporate startups.

The First Rule: Avoid "Monkey-Passing" Ensure every employee takes ownership of their ideas and solutions. The practice of "monkey-passing," where proposals are framed as tasks for others, leads to stagnation and resistance. Cultivate a culture where employees frame their proposals with statements like: "I see an opportunity, and I can act on it." This mindset fosters responsibility and drives meaningful action.

Flexibility, Trust, and Rewards This article has aimed to share the mistakes and challenges I’ve encountered along the way—mistakes paid for with time, resources, and, at times, personal reputation. Corporate entrepreneurship isn’t about " successful success" or a theater of innovation. It is a journey that requires flexibility, resilience, and, most importantly, trust in your workforce.

However, for those who dare to embark on this journey, the rewards are unparalleled. You will build an organization that continuously evolves, improves itself, and enhances its productivity and competitiveness. This kind of organization gains an advantage that no competitor can replicate.

A Call to Action I wish you the best of luck in developing corporate entrepreneurship within your organization. If you decide to take this path, I would be honored to support you along the way. For those who believe this isn’t necessary, let me leave you with the words of Bill Aulet, Director of the MIT Entrepreneurship Center and author of Discipline Entrepreneurship:

"Intrapreneurship is as necessary for your company’s future as swimming is for a shark—if you don’t do it, you’ll die."

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