Introducing Entrenovation: the business practice that is innovation
The practice of #entrenovation and the practice of entrepreneurship require different skill sets.
- Entrenovational activity is directed to the identification and utilization of innovative ideas to create new products and services in expectation of disrupting existing business activities and markets.
- Entrepreneurial activity is directed to starting and managing businesses in expectation of being profitable, while assuming the financial risks.
This blog and the associated website have been created:
- to definitively distinguish between the business practice that includes innovation and the business practice employing normal business actions, and
- to introduce and promote the use of the word entrenovation. The word will facilitate clear communication when discussing each practice.
Until relatively recent times the definitions of entrepreneurship, by French economist J. B. Say, Austrian educated Harvard economist J. Schumpeter, and American business consultant P. Drucker, regarded entrepreneurship as innovation. Per the latter two, the purpose of innovation and the introduction of new products/services was the disruption of existing markets. To describe this behaviour, Schumpeter coined the term Creative Destruction and characterized it as the evolutionary engine of the business world.
Today, entrepreneurship is defined in numerous dictionaries and in common usage as: the business practice that is associated with the act of creating a business and managing the business in pursuit of a profit. Not once in definitions I reviewed, or in response to questions asked of individuals, was the word innovation used or mentioned. That realization opened the door to create a word that defined innovative behaviour apart from entrepreneurship; an opportunity to eliminate an element of communication confusion. I walked through that door, mashed entrepreneurship with innovation, and hereby introduce entrenovation, a practice different than the practice of entrepreneurship:
- Entrenovation is not entrepreneurship, a science, an art, a personality trait, or intuition.
- Entrenovation is a behaviour, a specific behaviour with a knowledge base built on a foundation of concept and theory. Entrenovation is focused on and is the carrier of innovation. It purposefully pursues the identification of innovative opportunity, the development of the opportunity, and its introduction to a market with a goal being the disruption of ongoing businesses and markets.
About a century ago Joseph Schumpeter stated that the entrenoveurial practice included five disruptive actions: – the introduction of a new good or a new method of production, opening a new market, creating a new source of supply of raw materials, and reorganizing an industry. To engage in these activities was to utilize Creative Destruction, a term he coined that is commonly expressed in the world of business today.
Innovation in an enterprise
A professional manager of a significant investment fund described determining whether a company is sustainably successful at generating organic growth as the “gold-standard” when making investment decisions. Organic growth can include incremental advances resulting from maintaining and improving existing products and services and radical breakthroughs that disrupt or create markets. Books have been written examining how entrenovation can facilitate sustainable organic growth planning and goals. After all, if a company doesn’t innovate, it is standing still and vulnerable to the opportunistic activity of the competition.
A firm employs the practice of entrepreneurship to start and manage a business using the applicable skill sets, which do not include innovation. In recognition of the need to manage innovation separately, entrenoveurial policies and procedures that are specific to identification and development of innovative opportunity must be specifically introduced by the company. In a larger enterprise, i.e. has sufficient resources, Entrenovation may typically be housed in a separate internal structure, say the Office of Organic Growth. It will be staffed and managed in accordance with the needs of the practice of entrenovation. The policies and procedures will define the intersection where the innovation joins the business and is carried forward by entrepreneurial management. The enterprise utilizes two practices, entrenovation and entrepreneurship, that are synchronized to ensure sustainable growth of the enterprise.
Innovation In a start-up
The start-up is often founded by an entrenoveur, a person(s) with an innovative idea that includes a product/service and a market for it. After justifying the idea as a viable opportunity, a plan to develop the product/service will be created and executed. At some point in the development process, typically as it approaches commercial realization, this entrenoveurial idea will require the skills of entrepreneurship to advance the development process in order to achieve becoming a going concern business.
As in the enterprise the intersection of entrenovation and entrepreneurship must be carefully addressed. It cannot be assumed that a founder is equipped with the necessary entrepreneurial skills necessary to complete the integration of the new product/service into a business. This is not a new issue. Based on my personal experience, the ego and/or the psychopathy of a founder must not be allowed to subsume the need for a skilled entrepreneur who can lead the new venture forward. That said, a founder may be fully capable of making the transition. While business can be fun, it is not a playground.
The practices of entrenovation and entrepreneurship are distinct and separate. That does not mean that individuals cannot wear two hats and be skilled in both practices. Regardless, it has become increasingly evident that the practice of entrenovation must be included in the strategy of an organization from the outset and be nurtured thereafter.
Read the argument for using entrenovation: http://bit.ly/new-word
The Entrenovation Blog going forward
On at least a weekly schedule, this blog will continue to promote the use of entrenovation and its derivative words in an effort to eliminate the communication confusion that has arisen in the use of the word entrepreneurship. Offerings will include some how to’s, do’s, and don’ts as pertain to entrenovation. For example, methods that can be employed to identify innovative opportunity will be included in coming offerings. Start-ups will also be a subject of future blogs.
Mind your way.