Activating corporate entrepreneurship

Activating corporate entrepreneurship

“All humans are entrepreneurs, not because they should start companies but because the will to create is encoded in human DNA”.
This is what Reid Hoffman (co-founder and chairman of online networking platform, LinkedIn) and fellow entrepreneur and author Ben Casnocha profoundly put to us in their much empowering book, The Start-Up Of You: Adapt to the Future, Invest in Yourself, and Transform Your Career.

In agreeing with these entrepreneurs and authors, Nobel Peace Prize winner and micro finance pioneer, Muhammad Yunus, takes us back to when human history began.
He tells of how, when we were in the caves, we were all self-employed, finding food to feed ourselves.

With the advent of civilization, we began to suppress ourselves and became “labours” because they stamped us, “You are labour.” We forgot that we are entrepreneurs.
Such statements have a potential to spark robust debate on whether there is validity on the views held by the gentlemen referred to above.  Be that as it may, I love the concept that these views invoke — that being an entrepreneur doesn’t always mean you have to go start your own company. One can be an entrepreneur with a job.

But let’s snap back to reality! If we are to stick to a narrow definition of entrepreneurial process (which includes all functions and activities executed in pursuit of business opportunities and creation of business start-ups in order to generate value) , entrepreneurship is often associated with starting a new business or activities of small and medium enterprises.
Indeed, starting a new business is the most evident and widespread form of entrepreneurial activity which somehow justifies this simplified characterization of entrepreneurship with business start-ups.

In the broader business sense today, being entrepreneurial has come to mean more than just the business acumen required to turn an idea into an enterprise.
It is also used to characterize a combination of skill and mindset to innovate, create, and take calculated risk-taking, amongst others.
Because the term is not exclusively used for individuals, it is applies to organisational teams and entire organisational cultures. That is where the concept of Corporate Entrepreneurship (CE) comes in.

Approaches to Corporate Entrepreneurship. Although there is no unanimity on the meaning of the term or activities characterizing corporate entrepreneurship, entrepreneurship literature that has emerged in recent years provides consensus on using the term “Corporate entrepreneurship” to refer to different types of entrepreneurial behaviour in existing large organizations that seeks to encourage innovation to achieve competitive advantage at all levels of the business.

There are indeed different schools of thought on corporate entrepreneurship, the four basic ones being Corporate Venturing (related to investing in start-up and management of new small firms by a large company), Intrapreneurship (based on individuals employed in a large company to assume entrepreneurial behaviour), Bringing the Market Inside (market approach towards implementing structural changes in an organization in order to encourage entrepreneurial behaviour) & Entrepreneurial Transformation (emphasizes importance of adapting to an ever-changing environment).

To add a “caveat”, appreciating that corporate entrepreneurship takes many forms and shapes, this article is focusing only on the 3rd school of thought, which is Intrapreneurship.
Nurture your corporate entrepreneurs . So it is evident that there is a sweeping wave of entrepreneurs who intuitively understand the discipline of the marketplace in big organizations.
Some do not have the courage to take the leap of faith and start their own businesses. Others, who are gifted with entrepreneurial brains, or trained as such, choose to remain employed. Organizations cannot afford to be callous towards these employees.

It is important to create an entrepreneurship culture that allows them to thrive internally. An organisational culture does not grow on its own.
It must be deliberately cultivated through concerted action. Creating that sort of culture lies with management. Management’s ability to trust people is key in supporting entrepreneurial activity.  Yes, managers have the responsibility to ensure that the company achieves its strategic and financial objectives; otherwise shareholders will continuously be on their case demanding return on their investments, and legitimately so.

This is not to say your employees need to be allowed to spend all work hours pursuing their delights and intrigues because that is not going to give you success every time.
However, managers need to create room for employees to explore new products and technologies that have potential to satisfy market needs whilst giving you impact and reward, lest you find yourself competing for the same customers.

Although it may, glance it, seem like fostering entrepreneurial employees is essentially shooting yourself in the foot since they will just go and start-up their business after all the effort, it’s inevitable that they will sooner or later seek spaces that will appreciate and nurture their entrepreneurial zest.  The benefits of this effort for the organization more than outweigh these risks.

They won’t settle for anything less, at least not for long. And remember what they say, “the best startups typically are a group of entrepreneurs working together”.
This could start in your organization and explode into competition. So, again, it’s about managing the organisational paradox:  balancing freedom and discipline. But that balance is always elusive; so one has to constantly work on it.

To stimulate business growth requires a multi-prone approach; one of those is to activate internal entrepreneurship. Survival and growth of your business depends on people.
Thus, if you don’t put efforts in attracting, motivating, and retaining those individuals who can help you achieve it is tantamount to betting against yourself.
Your internal entrepreneurs thrive in an environment like that. Once you have identified your entrepreneurs, you need to encourage them to take more chances and take lessons from failures they experience along the way.

In some organizations, one still gets a palpable sense that failure is unacceptable; it means you are not performing your job to meet expectations.
Stimulating an entrepreneurial culture also means creating room for failure, and accepting that to get successes, failures are inevitable. Failures can only propel organizations forward.
That way, your employees will start feeling like they are your partners, regardless of organisational hierarchy.
Deliberately stimulate corporate culture to capture opportunities

With growing consensus that companies should promote entrepreneurship within their organisational boundaries, the question is no longer whether large companies should or should not engage in entrepreneurial activity; it is rather what can be done to foster a culture of entrepreneurship within the organization. There has to be some sort of business strategy pursued by organizations (often referred to as corporate entrepreneurship (CE) strategy), which intentionally spells out how the organization plans to engage in various entrepreneurial activities to preserve and reinforce the innovativeness and flexibility from which it is to benefit. Stimulating an entrepreneurial culture has become an important advantage. In the fast-paced business environment today, most organizations no longer hope for an entrepreneurial culture, but rather should strive for it.

Pretty much all businesses need to strive for increased competitiveness and, at some stage of the business — leaders have to pay attention to business growth.
They have seen the ability of start-ups to trigger the impulse of creativity and innovation among their employees more effectively than themselves, and turning those fascinating ideas into commercial ventures — with less sustainability in some instances, but that’s a discussion for another day.

So there is evidence of a growing level of interest developing in corporate entrepreneurship, as should be. Indeed, there are companies whose ability to capture new opportunities, and creating success, is attributed to fostering internal entrepreneurial activity.  Many organisations have done it and reaped tangible benefits.

This, they have done in different ways, with the right balance of freedom and discipline; through trial and error (as one practice is no bullet proof).
From decentralizing decision-making and pushing it down to lower organisational levels to diligently building a culture of entrepreneurship, they have reaped rewards.
Does your organization value an entrepreneurial culture? How has it added to your competitive advantage?
If you have not been paying attention, remember the Chinese proverb “The best time to plant a tree was 20 years ago. The second best time is now.”

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