Here Are The Details Behind A New Strategy That Withdraws Funding to Drive Innovation


Photo: Hyoin Min

The Advocate Model is a relatively new and in some ways counterintuitive form of corporate entrepreneurship in which a group is designated to drive innovation and new business creation without significant funds to do so.In 1999, CEO Chad Holliday of DuPont realised that the company needed some new thinking. Even though margins and returns had improved during the prior six years, growth had declined. So Holliday asked senior executives in the corporate plans group to delve into strategic options for generating greater organic top-line growth.

The result was the DuPont Market-Driven Innovation (MDI) initiative, a five-stage process.

Stage One: Leadership framing

The MDI team works with business unit leadership to define the core mission, growth domain, and decision criteria for opportunities that they are willing to fund.

Stage Two: Conceptualizing Ideas

This stage is aimed at developing new business ideas that are consistent with the strategic framing. A four-day “business builder” session helps people from both inside and outside DuPont generate and prioritise different business concepts. Teams will then typically spend between four and eight weeks developing a detailed business plan, including a 180-day contract with senior management to address major uncertainties of any concepts that are deemed promising enough to justify such an effort.

Stage Four: Validation phase

The team moves into this data-driven stage is the project is funded.Here, teams pursue their 180-day contract with senior management, managing business risk by spending minimal resources in the early phases to test uncertainties and validate or invalidate their initial insights in real market environments. A concept can be can celled at any point in the process; however, most often the process brings uncertainties to the surface and tests hypotheses in ways that help new business design.

Stage Five: Execution phase

Teams make their hard-sought idea a reality.

Success within one business unit has a way of building interest from others, and over time, teams like those at DuPont can become critical change agents. There is no requirement that business units participate; they do so because they recognise the value of the program.

The bottom line is that in corporate cultures where business units enjoy significant autonomy, a new business opportunity must be adopted by a business unit in order to come to fruition. This does not mean, however, that business units should be left on their own to develop new businesses. DuPont’s MGI program is an Advocate organisation that acts as evangelists and innovation experts, facilitating corporate entrepreneurship in conjunction with business units.

Robert C. Wolcott and Michael J. Lippitz are leading authorities on innovation and corporate entrepreneurship at the Kellogg School of Management at Northwestern University, and co-authors of Grow From Within: Mastering Corporate Entrepreneurship and Innovation (McGraw Hill, 2010). In the past seven years, they have studied more than 30 companies across industry sectors and developed an ongoing dialogue with them about corporate entrepreneurship through the Kellogg Innovation Network (KIN)

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