To find out we put twelve entrepreneurial and corporate leaders in a room and asked them to explore how large corporates can ensure their survival by thinking more like entrepreneurs. The corporate leaders represented 458,000 employees, £85bn in revenues and over 75 million customers. The entrepreneurs represented the very latest in agile and purpose led business on both sides of the Atlantic.
Both sides found much to agree upon.
They agreed that what drove entrepreneurship in organisations large and small was:
- a profound sense of ownership
“We have 850 owners (Partners) and they are NOT entrepreneurial. It is an attitude of mind.”
- A passion to improve things
“Entrepreneurs are the people in your organisation with a passion for something and a desire to create.”
- an open mindset
“Kodak saw the need for change but were not sufficiently broad-minded to respond in the right direction”.
- Nurturing entrepreneurship
“If you look at your business it’s the ‘entrepreneurs’ that are responsible for how the company really got here’ and yet they are not sufficiently nurtured and developed.”
- Corporate courage
“It takes courage to persist with time frames any longer than a year or two even if it is the right thing to do. That courage is entrepreneurship.”
They agreed on what kills entrepreneurship dead in its tracks:
- Any no-fail policy
“We’re not culturally prepared to fail. Entrepreneurial businesses are the opposite; they embrace failure, seek change, believe everyone can win”
- Short time frames
“If there is no immediate return we fear shareholder value is not being maximised.”
- Internal preoccupation
“If big companies spent as much time thinking about the customer as they do about their own internal processes that would be a big start.”
- Personal risk
“If the risk is big enough to make a difference to the balance sheet, the risk is big enough to destroy a career. Getting egg on your face is major disincentive to innovate. Entrepreneurs have no such fear”
“People with an entrepreneurial mindset get bogged down by rules and layers.”
“There is nothing more dangerous in a large organisation than pivoting too quickly without getting everyone on board.”
“Corporates fear change. The consistency of message is prized. Change of message is bad”
“Entrepreneurship in large organisations is strangled by cumbersome legacy systems”
There was disagreement on whether it is even possible for Corporates to be entrepreneurial
“Scale leads to complexity and that takes the eye off the ball. The energy gets tied up in politics”.
And there was a clear innovation dilemma. Big companies have an imperative to innovate to survive. And yet structure and culture acts against innovation.
“Big companies fail because they fail to change. But change is not rewarded”.
The entrepreneurs saw the solution to this dilemma through:
“You need to create a separate entity so as not to strangle the entrepreneur or disrupt the core”.
- Decision making
“It may scare the corporate but the velocity in today’s world doesn’t allow for central control. Decision making MUST move closer to the customer”
“If big organisations had bigger visions they’d be given more space to innovate. It’s about courage and leadership. People should not fear to fail”
- and Culture
“A lot of this can be overcome if you connect everyone to a sense of purpose and have the courage to allow talented people autonomy.”
Some corporates saw the solution differently:
“Shareholder value often comes from doing what we do well and doing it again and again. So, let someone else create something new. When 50,000 people want to buy it then we’ll acquire the innovation”
Both sides agreed that innovation needed to be done differently and probably outside the existing business. But there was a problem. And that is in language and communication.
“In that case we need to learn to UNDERSTAND the entrepreneur and help and nurture them outside the business. But we don’t speak ‘entrepreneur’. And they don’t speak ‘us’”
In the end, does it really matter?
“everything is about to change. This is not a tech bubble. This is an industrial revolution. The velocity is unstoppable”
“If for no other reason, large companies will die through bleeding talent. Good people are already dying to break out.”
“In the next 10 years 40% of FTSE companies will be gone. They will try to innovate and fail. They will pivot but not fast enough. The corporate model is not doomed – but its current expression is.
In summary, this group of global Leaders and entrepreneurs think..
- Lead and inspire around vision and purpose.
- Take the personal risk away. Celebrate failure.
- Embrace entrepreneurship and skill Leaders to the task
- Build a personality around the best person in the business, not the lowest common denominator.
- Decouple Business as Usual from Entrepreneurship.
- Become good at socialising and developing ideas, not just having them.
- Make the reporting structure work FOR innovation, not against it.
- Redefine recruitment to attract & retain entrepreneurs (who least want to work for you)
- Move closer to your customer.