Page 175 - ENTREPRENEURSHIP Innovation and entrepreneurship

53231_Innovation and Entrepreneurship.qxd 11/8/2002 10:50 AM Page 168

168 THE PRACTICE OF ENTREPRENEURSHIP

senior member of the top management group. In smaller businesses,
this executive in charge of entrepreneurship and innovation may well
carry other responsibilities as well.
The cleanest organizational structure for entrepreneurship, though
suitable only in the very large company, is a totally separate innovat-
ing operation or development company.
The earliest example of this was set up more than one hundred
years ago, in 1872, by Hefner-Alteneck, the first college-trained engi-
neer hired by a manufacturing company anywhere, the German
Siemens Company. Hefner started the first “research lab” in industry.
Its members were charged with inventing new and different products
and processes. But they were also responsible for identifying new and
different end uses and new and different markets. And they not only
did the technical work; they were responsible for development of the
manufacturing process, for the introduction of the new product into
the marketplace, and for its profitability.
Fifty years later, in the 1920s, the American DuPont Company
independently set up a similar unit and called it a Development
Department. This department gathers innovative ideas from all
over the company, studies them, thinks them through, analyzes
them. Then it proposes to top management which ones should be
tackled as major innovative projects. From the beginning, it brings
to bear on the innovation all the resources needed: research, devel-
opment, manufacturing, marketing, finance, and so on. It is in
charge until the new product or service has been on the market for
a few years.
Whether the responsibility for innovation rests with the chief
executive officer, with another member of top management, or with a
separate component, whether it is a full-time assignment or part of an
executive’s responsibilities, it should always be set up and recognized
both as a separate responsibility and as a responsibility of top man-
agement. And it should always include the systematic and purposeful
search for innovative opportunities.

It might be asked, Are all these policies and practices necessary?
Don’t they interfere with the entrepreneurial spirit and stifle creativi-
ty? And cannot a business be entrepreneurial without such policies
and practices? The answer is, Perhaps, but neither very successfully
nor for very long.
Discussions of entrepreneurship tend to focus on the personalities