Think Like a VC, Act Like An Entrepreneur

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It is tricky to encourage a lot of new ideas without pandering to the sources of the ideas. If the ideas are not worth pursuing, managers need to feel comfortable (and supported by their chain of command) to not waste time on them, even if the most senior executives or most important customers provide ideas.

• Assess risk and rewards and apply ruthless judgment to select the handful of big ideas that they want to put their time, energy, and resources into every day.

Look for situations where the team or company has a distinct advantage against competitors; where you can leverage your resources, expertise, and relationships to create value.

Once the big ideas are chosen, there needs to be a shift in emphasis. The key to successful implementation is to act like an entrepreneur. Specifically:

• Attract world-class talent.

Great entrepreneurs don't settle for working with whoever is available. Instead, they take the attitude that their mission is to be inspiring enough to attract the best and brightest, and they don't waste time with B teams.

• Attack the opportunities as if the structural barriers in front of you don't exist.

There's a pattern of young entrepreneurs achieving greatness in areas where their older, wiser colleagues were scared away because they "knew better." At a time when IBM (IBM) and Compaq Computer (HPQ) were dominating the emerging PC market, who would have thought to challenge them with a new direct-to-consumer business model but a young kid named Michael Dell selling computers out of his dorm room at the University of Texas? Corporations need to allow their managers to be naive enough to not "know better."

• Don't be afraid to be wrong—just don't stand still.

For managers to truly foster innovation within the corporation, they can take the best of both of these perspectives—the VC and the entrepreneur—and apply them in their own environment.

Jack Welch had a similar mind-set when it came to balancing competing priorities. "You can't grow long-term if you can't eat short-term," he states flatly. "Anybody can manage short. Anybody can manage long. Balancing those two things is what management is."

I might argue the same is true for instilling a similar entrepreneurial/analytical approach in the minds of corporate managers  there are those that are able to sit back and analyze what idea is the best one, while others who are good at acting with the raw, unbridled enthusiasm of an entrepreneur. The best managers will do both. And the best corporations will help them figure out how.

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Jeffrey Bussgang is a general partner with Flybridge Capital Partners, a venture capital firm in Boston, and was previously co-founder and president of Upromise.