By Philip Cullum, Liz Padmore and Keith Ruddle
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PDF Help Ask senior executives to name the leader of an
entrepreneurial organization—as Accenture did*—and a
handful of well-known figures top the list: Bill Gates of Microsoft, Sir
Richard Branson of Virgin, Ingvar Kamprad of IKEA, Jeff Bezos of Amazon.com and
Maasayoshi Son of Softbank.
CEOs also tend to see themselves as entrepreneurial
leaders—or as trying to be. Seven in 10 of the CEOs Accenture surveyed believe
their organizations as a whole will be more entrepreneurial in three years’
time.
Yet despite this optimism about the future, many are
confused about why their efforts to promote entrepreneurship in their own
organizations have not been more effective. Only one in four believe their
organizations are "very entrepreneurial." Many blame the drive for operational
efficiency, which they say has undercut entrepreneurship.
A greater problem—perhaps connected to the perceived role of
leaders themselves—is the lack of confidence CEOs have in those outside their
circle of peers. All too often, executives claim that entrepreneurship is
applicable to only some employees. Almost seven in 10 CEOs think their
employees lack entrepreneurial instinct. At the same time, Accenture's research
suggests that many top executives are nervous about a loss of control if all
staff become highly entrepreneurial; half worry that employees can be too
entrepreneurial.
The Entrepreneurial Makeup   What,
then, does it take to lead a truly entrepreneurial organization? The
requirements of entrepreneurship itself are fairly straightforward. Creativity
is at the heart of entrepreneurship: Entrepreneurs can identify opportunities,
large or small, that no one else has noticed. Good entrepreneurs also have the
ability to apply that creativity to effectively marshal resources needed to
achieve their goals.
Entrepreneurs have drive—the force of will and the passion
to achieve success. They focus on creating value by doing things better, faster
and at lower cost. And they take risks—breaking rules, cutting across accepted
boundaries and going against the status quo.
The Myth of the Lone Heroic Leader Confusion about why they are not succeeding in fostering a
more entrepreneurial company may set in when CEOs associate entrepreneurship
with individualistic behavior, and assume that the requirements of
entrepreneurship must be met by a single heroic leader. The most prominent
entrepreneurs in many societies are founders who have led their companies from
startup to success. These leaders have to embody all the components of
entrepreneurship, especially at the outset.
But entrepreneurship in a larger organization does not
necessarily require any one person, even the leader, to have the entire set of
entrepreneurial characteristics. Instead, these characteristics can be found
across the corporation, as people collaborate on developing ideas, often
contributing their expertise at different stages.
A Leader of Entrepreneurs For an organization to be truly entrepreneurial, leaders
need to adopt a new role. Rather than just striving to be entrepreneurial
leaders, they need to focus on becoming leaders of entrepreneurs. They need to
ensure that others on the management team and throughout the organization want
to and know how to act in an entrepreneurial way, and that they have the
resources and support to do so.
How can that be done? Accenture research and analysis
suggests five key imperatives that a leader of entrepreneurs must undertake.
- Use strategy and purpose to create entrepreneurial
confidence
Having a clear, common purpose can give employers
the confidence to let employees act on their ideas and give employees the
confidence to exercise this freedom. It can also reinforce the message that
entrepreneurship is a collaborative activity.
In the entrepreneurial
organization, strategy cannot be confined to the executive suite. Employees at
all levels should provide input to the strategy process. They can also act as
conduits to sources of information and thinking outside the
corporation.
- Be big, work small
Once the right
strategic decisions are made, an entrepreneurial organization must be able to
execute on those decisions swiftly. The challenge—especially for large
companies operating on a global scale—is to get the organization out of the
way.
One way to achieve this is to break the organization down into
smaller units. Successful large entrepreneurial companies often divide their
constituent businesses as soon as they become unwieldy.
Structural
approaches are not the only solution: Many of the best entrepreneurial
organizations find ways to champion small-scale initiatives, for example by
encouraging employees to launch and lead projects and providing seed money for
internal ventures.
- Build belief that entrepreneurship is
valued
If they are to behave in an entrepreneurial way,
employees at all levels need to be reassured that such behavior is appreciated
and valued, and that it does not involve unacceptably high personal
risks.
To achieve that end, leaders of an entrepreneurial organization
need to build an organizational mindset that encourages breakthrough thinking
and change. They need to develop performance measures for entrepreneurial
behavior.
Entrepreneurial contributions must be recognized and
rewarded. This means that the organization must be willing to reward, or at
least not penalize, intelligent failure. The aim should be to create an
environment in which three successes out of five attempts is recognized as
better than one out of one, and where intelligent failure is recognized as
providing valuable experience.
- Encourage diversity of thinking
New
ideas can be the "grit in the oyster," challenging conventional thinking in
ways that may not be comfortable but will often produce a pearl of innovation
or insight. A diverse workforce also allows companies to read and respond
better to the needs of complex markets.
Recruiting and hiring a
variety of employees is an obvious avenue to increasing the diversity of
thinking, but there are other approaches. Leaders can capitalize on the
diversity present in a company's virtual network of alliance partners and other
organizations and people with which it has connections. A truly entrepreneurial
leader will have his or her antennae up at all times, constantly ready to
listen to new ideas or viewpoints from any source.
- Make the most of your company's
knowledge
Given today's mobile workforce, a corporation will
need to find quicker and more efficient ways to manage its knowledge and help
employees to develop and maximize their entrepreneurial
potential.
Companies need an effective knowledge-sharing system that
includes benchmarking, allows the organization to learn from successes and
failures, and communicates these lessons quickly.
In a mature entrepreneurial organization, the leader
cannot—in fact, should not—try to do it all alone. A corporate leader faces a
different, even greater challenge: to give employees the freedom and confidence
to make the most of their entrepreneurial abilities.
Philip Cullum was an associate partner-Accenture Policy and
Corporate Affairs, based in London. He was project director for Accenture's
work on entrepreneurial behavior, and co-author of a number of other Accenture
studies, including “The Connected Corporation,” which looks at the changing
nature of business and its relationship with the world around it.
Liz Padmore, partner and director-Accenture Policy and
Corporate Affairs, is based in London. She is co-author of a number of
Accenture studies on subjects including entrepreneurial behavior and
leadership, European competitiveness, technology and the CEO agenda,
globalization and corporate social responsibility.
Keith Ruddle is a fellow in leadership at Templeton College,
Oxford University, teaching and coaching senior teams from multinational
companies, including Accenture. His recent research on transformational
leadership followed a career with Accenture during which he ran the Strategy
practice in the United Kingdom. He can be reached at
keith.ruddle@templeton.oxford.ac.uk.
For more information, please
contact us.
*Between January 2000 and
April 2002, Accenture conducted research on entrepreneurship that included
approximately 1,100 interviews and numerous roundtables with CEOs, academics
and political leaders in 26 countries and territories on 6 continents. The
detailed results of this research and analysis can be found in
"Liberating the
Entrepreneurial Spirit” , "Liberating the Entrepreneurial Spirit in
Hungary” and “Liberating the Entrepreneurial Spirit in China”.
The views and opinions expressed in
this article are meant to stimulate thought and discussion. As each business
has unique requirements and objectives, these ideas should not be viewed as
professional advice with respect to your business.  To Top
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