Corporate Entrepreneurship

Several factors in the external business environment influence new business creation (Table 3.1).

Industry and competitive forces

Customer pressures can facilitate or hinder new business creation

Demanding customers spur new business creation DGM Mike Walker's “let's get into a lot of trouble” philosophy prodded his AMP Sigcom division to work with the most demanding customers on the most challenging new products and applications. Once AMP Sigcom had acquired a reputation as an innovative supplier in the marketplace, demanding customers sought the division out and continued to energize its new business creation pipeline. This occurred even after Walker was promoted and the new group director (GVP) Jon Grover began emphasizing product quality and customer service instead.

3M had an explicit policy of working with lead users – those deemed to be the most advanced and sophisticated in their requirements — and the Micrographics division relied on them to energize new business creation. For example, personnel from key customers were included on the division's new business creation teams.

Customers who are slow or not innovative hamper new business creation Customers can dampen new business creation if they are slow to adopt new technology, as DGM Mike Walker of AMP Sigcom found: “We are slow on fiber optics because our customers have been slow – they are not using fiber in lieu of electrical as fast as I had hoped.” Peter Dell, technical director of Monsanto Fab Products mentioned a similar problem: “At Monsanto we always want to deal with the big customers. But they are not always the most innovative. Maybe we should also deal with smaller companies who are more innovative.”