If there is one thing that gets trotted out with alarming regularity at the moment, it is that people in businesses large and small, ought to be thinking like entrepreneurs. But really, how possible is this in large organisations?
“You are right to ask whether innovation and entrepreneurialism are oxymorons in large businesses,” says James R.F. Berkeley Managing Director at Ellice Consulting Ltd. “Your question is even more insightful when you dig deeper and ask is the activity ‘symbolic’ or ‘meaningful’?”
Berkeley, who has written a paper, ‘The Five Myths of Innovative Entrepreneurs’, based on observations in over 75 businesses seeking profitable growth and expansion adds: “The finance and insurance arena provides wildly contrasting examples.”
He point to the “CEO's of sluggish monoliths” who have set up corporate accelerators and “blather onto analysts about how they are embracing disruptors” but end up with third rate entrepreneurs. He goes on to compare this unfavourably to “the meaningful businesses who are applying digital technologies” to a variety of core issues. Many of these, are of course, new.
This seems to sum up the core challenge of the entrepreneurial spirit in large businesses. It is one thing when the company was recently small and attempts to retain that spirit, but trying to shoehorn innovation into a towering behemoth is another thing entirely.
Serial entrepreneur David J. Brown of Ve provides a personal perspective. “I began my career as a CEO and founder after studying music and being nationally recognised in the UK as a composer,” he says. “I would honestly say that I credit my musical background for giving me the CEO skills I needed.”
Interesting, but this is just one man’s unique approach to leadership. What about the culture in large organisations generally? Carl Rodrigues CEO of SOTI says: “Some organisations have found a way to stimulate creativity and initiative among their employees more effectively than others, converting intriguing ideas into commercially-viable solutions, products, and ventures.”
“The large organisations that have found success in fostering an entrepreneurial culture know that no single practice enables them to identify and capture new opportunities but, rather, often requires pulling and pushing a variety of levers to bring it to life,” he adds.
“It is about having empowered people, enabling people to make decisions that influence the outcome of their work,” says Berkeley. “The ‘lightbulb’ moment for management is when they grasp that power doesn't corrupt but powerlessness does corrupt (bureaucracy).”
“Large corporations are sometimes bogged down in process, with too many approval levels, too many committees that need to weigh in, and more hindering bureaucratic processes,” concurs Rodrigues.
So, how are large organisations doing overall here?
“The metric here is the percentage of your business today that arises from new products and services that didn't exist three or five years previously,” says Berkeley. “25% would be a minimum threshold and 75% would be a maximum for a true ‘innovator’ in their sector. You'll find few mid and large firms at the bare minimum, even fewer higher up the curve.”
“Most people think they are doing something innovative (raising performance to new levels) when most are actually problem solving (returning performance to levels they used to be at),” he adds.
“Day to day pressures can suck the entrepreneurship and innovative spirit right out of an organisation,” says Rodrigues. “When you need to focus on research that will help the company three to five months down the road, short term goals have the potential to kill the long term goals, and you will focus too much on today and miss out on the endless possibilities for tomorrow.”
“For this reason, large organisations need to create these pods of innovative freedom. Remove the corporate leash, so to speak. Believe in the employees and trust that you have the most creative and innovative team for the job and let them run with it. Allow them to take risks and reward success and even failure in innovation.”
This is all sound advice but does seem to take us back full circle. An entrepreneurial spirit may be optimum in today’s disruptive business culture, but a lot of the time it is just not achievable because of the management structure and slowness to put the correct building blocks in place.
Basically it is so hard to think like an entrepreneur and be ever ready for tomorrow. Employees become quickly demoralised by political structures and processes which can stifle ideas. Managers are always worried about losing money which can also stifle ideas. But then, I suppose in the end, this is why the whole topic of entrepreneurialism gets so much attention.
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