The crucial role of innovation and entrepreneurship in organizations

The convergence of innovation and entrepreneurship offers fresh perspectives to navigate change and transformation within organizations.

Marcel Planellas

This article is part of the ‘Inspiring Transformations’ series promoted by Esade Entrepreneur Institute for its 30th anniversary.

Identifying the critical need for change and innovation in organizations is a common ground that many acknowledge. However, the real challenge lies in effectively managing innovation within these organizations – moving beyond routine operations and dedicating time and resources to seek out new opportunities. A key aspect here is cultivating ambidextrous managers capable of both exploiting current resources and exploring novel avenues simultaneously

The paradox is that companies that try to innovate are very unhappy with the results obtained. Numerous studies indicate that almost 95% of managers express dissatisfaction with the results of their innovation endeavors. The inherent unpredictability of innovation, coupled with high expectations, can turn failures into particularly poignant setbacks. 

In the business landscape, innovation entails introducing new products or services that meet a specific need and attract customers willing to pay for them. This process goes from identifying fresh opportunities to transforming them into actionable projects. Despite its complexity, innovation is a process that can and should be effectively managed

The innovator toolkit 

In the past, the manager's toolkit lacked comprehensive instruments for handling innovation, often relegating it to the realms of creativity and brainstorming. The innovation audit was introduced to address this gap, aiding managers in fostering the entire innovation process. Crucially, garnering support from top-level management is imperative for its successful implementation within the organization. 

Traditionally, organizational structures have prioritized efficiency hindering new projects. That stance frequently clashes with the adaptability and uncertainty inherent in innovation, which requires more flexible and agile structures reminiscent of startups

Despite its complexity, innovation is a process that can be effectively managed

Entrepreneurship is the process that goes from developing an idea to the establishment of a new company. This journey may be undertaken by an individual or a corporation, giving rise to the concept of intrapreneurship – where organizations innovate from within. It introduces the idea that innovation and corporate entrepreneurship can serve as transformative pathways for organizations. 

The convergence of innovation and entrepreneurship offers a fresh perspective for companies navigating change and transformation. This juncture becomes an exploration ground for new approaches, models, and tools to streamline the transition from idea inception to the establishment of new ventures, a new paradigm in organizational transformation. 

References and recommended readings 

  • Planellas, M. (2022). “Auditando la innovación”. Harvard Deusto Business Review, (321), pp. 6-14 
  • Planellas, M. (2021). El Libro rojo de la innovación. Conecta, Penguin Random House. 
  • Planellas, M. & Muni, A. (2019). Strategic Decisions. Cambridge University Press (CUP). 
  • N. Rosenbuch, J. Brinckmann, A. Bausch. (2011). «Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs». Journal of Business Venturing 26, 2011, pp. 441-457. 
  • Bieto, E., Planellas, M. & Parada, P. (2006). “Corporate entrepreneurship vs. corporate parenting: Do they fit together for creating value in the corporation?”. In S. Zahra (Ed.), Frontiers of entrepreneurship research 2005, pp. 445-446. Babson College 
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