Unlocking Corporate Entrepreneurship

While the notion of ‘corporate entrepreneurship’ will always be an oxymoron to some, there can be no doubting the need for large organisations to stay competitive by encouraging new ideas to flow. External partnerships, skunkworks and, from a leadership perspective, developing a culture which can challenge the established order, are all essential if employees are going to push boundaries.

Phil Smith, CEO of UK & Ireland at Cisco Systems, says: “You need to create an environment where you continually think about disrupting yourself because, if you don’t, then someone is likely to disrupt you, your products or your business model. The advantage of focusing on innovation is that you keep giving yourself the opportunity to stay ahead of the competition.

“Innovation is also a powerful way of delighting your customers by constantly looking for new things you can do with them.”

At Cisco, Phil says there are a number of ways to capture that spirit of entrepreneurship, from collaborating with start-ups to driving ideas internally. “You can’t just assume that innovation is going to happen,” he comments. “If you’re going to be systemic about it and create it within the organisation, you need to have great leadership which is committed to saying that innovation is a vital part of doing business.”

There’s no one-size-fits-all approach. Kai Peters, Criticaleye Thought Leader and CEO of Ashridge Business School, says: “If you think about Google or Facebook, they’re constantly buying to acquire new ideas. The alternative is to throw it open for innovation and crowdsource ideas to address specific challenges, which you see [being done] in companies such as Proctor & Gamble.”

Andrew Minton, Executive Director at Criticaleye, says: “It’s vital leaders ensure curiosity is embedded into the culture of an organisation, so that employees feel empowered to share ideas and challenge orthodoxy in a constructive fashion. Without such an approach, the prevailing assumption will be that what has made a company so successful in the past will be equally effective for the future – it’s a dangerous mistake to make.”

The trick is letting the core business roll onwards while creating a microclimate to nurture new ideas. Martin Hess, Vice President of Enterprise Services Sales for UK & Ireland at tech company Hewlett-Packard, says: “You’ve got to create semi-detached organisational entities and protect them from the rest of the corporation. Allow them to grow and prosper on their own… and be measured against their own set of metrics, which makes them fully accountable. They can’t be measured against the metrics of the [wider] corporation.”

Olivier Horps, CEO for Greater China at holiday resorts company Club Med, says: “It is difficult because large companies have their own processes and cultures. But they can do it if they create a sub-team which operates independently from the rest of the company, or if they invest directly in a start-up which also functions independently.

“The best way is to keep things separate and then, when the idea gets closer to launch, often the team needs to mix with the rest of the company.”

Making it happen

Rewards have to be clearly defined if your employees are going to break the mould. “You’ve got to ask the question: are there sufficient incentives to encourage people to come up with new ideas?” says Martin. “If there aren’t, people will stop doing it as they’ll realise that’s not how you get on in the company.

“I don’t think many big companies pull it off. I’m a great believer that if you tell people to innovate without the right environment, it won’t happen.”

By way of example, Martin explains how he developed a skunkworks at HP, spending two years creating a digital practice focused on customer experience: “I had a team of people with a common vision and the company allowed me to get on with it, basically giving me the resources to build something from nothing. It’s been a success and now I think we’re looking to get it more widely adopted in the company.”

Martin says you’ve got to start with the principle that the best ideas don’t necessarily spring from the highest echelons of the business: “In the case of creating new markets, it comes from the parts of the organisation that touch the customer. You’ve got to foster a culture which means employees don’t expect all the best ideas to come from the top of the company.”

It’s a point which often gets lost. Nicola Pattimore, HR Director at outsourcing concern Equiniti, recalls how the culture in one organisation she worked for made it incredibly hard for employees to actually bring their entrepreneurial flair to life.

“It was because the organisation was so driven by hierarchy,” she says. “When you’ve got an entrepreneurial spirit, what people want is a level of autonomy and empowerment and that comes back to the leadership style within the business.”

Norman Bell, Strategy & IT Director for Travis Perkins, agrees: “This is not driven from the centre; it’s actually about having a culture and an environment where the frontline in particular are encouraged to try things and experiment, sharing experiences. It’s not head office saying: ‘Right, be innovative.’

“The best way of doing that is to build it into your measures, so individuals understand that they do have to deliver results, but they can also enhance those results by having ideas. What they can’t do is allow those things to distract them from the fact that there is a core business to deliver.”

Approaches will vary depending on sector and size of the business, but what’s evident is that breakthroughs can be made. For those organisations struggling to create that entrepreneurial verve, the problem may lie with the style of leadership and not because employees are short of ideas.

I hope to see you soon.

Matthew

https://twitter.com/criticaleyeUK

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