The entrepreneurial corporate

“Being entrepreneurially minded is your only survival strategy”

Let’s start with this.

1. Innovation is driven by entrepreneurial thinking.

2. Entrepreneurs are people.

3. Corporate are just groups of people.

We brought together Global Leaders of

representing: - 458,000 employees - £85bn in revenues - over 75 million customers

to discuss this question…

•  International Banks •  Big Four Professional Services •  International Consultancies •  Global Telecommunications •  Big Energy •  and Tech entrepreneurs

“Big businesses urgently need to learn to think more like entrepreneurs”.

This is what we learnt ...

Let’s start with what drives entrepreneurship in a global company

We agreed that what drives entrepreneurship is …

a profound sense of

OWNERSHIP

So does creating ownership always mean entrepreneurship is a done deal?

No!

“We have 850 owners (Partners) and they are NOT entrepreneurial. It is an attitude of mind.” Big Four

What drives entrepreneurship is…

A PASSION to IMPROVE things

“Entrepreneurs are the people in your organisation with a passion for something and a desire to create.” Global Consultancy

“Entrepreneurs are talented people who want to drive change” Telecom

What drives entrepreneurship is…

an OPEN MINDSET

People think companies like Kodak didn’t respond. That is not accurate.

“They saw the need for change but were not sufficiently broad-minded to respond in the right direction.” Global Consultancy

What drives entrepreneurship ..

NURTURING IT

‘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.” Global Energy

What drives entrepreneurship..

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.” Global Energy

And what kills entrepreneurship dead in its tracks?

What kills entrepreneurship?

NO FAIL POLICY

Corporates are not good at taking necessary risk.

“We’re not culturally prepared to fail.” Big Four

“Entrepreneurial businesses are the opposite; they embrace failure, seek change, believe everyone can win” Tech Entrepreneur

What kills entrepreneurship?

SHORT TIME FRAMES

Entrepreneurs define their own success criteria but for corporates…

“…if there is no immediate return we fear shareholder value is not being maximised.” Global Energy

What kills entrepreneurship?

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.”

What kills entrepreneurship?

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” International Bank

What kills entrepreneurship?

RULES

Scale leads to complexity (and diversity which SHOULD breed innovation) but corporates must manage scale with rules.

“People with an entrepreneurial mindset get bogged down by rules and layers.” Global Telecom.

What kills entrepreneurship?

VELOCITY

Decisions are necessarily slow and process constrains passion.

“There is nothing more dangerous in a large organisation than pivoting too quickly without getting everyone on board.” Global Energy

What kills entrepreneurship?

FEAR

“Corporates fear change. The consistency of message is prized. Change of message is bad”

“There is vision at the top. Energy at the bottom. Middle management fears change and has little incentive to change” Professional Services

“Today’s visions seem to be more about incrementalism than real change or growth”

“Perhaps the corporate vision isn’t bold enough or brave enough any more to allow for systematic change” Big Four

What kills entrepreneurship?

LEGACY

“Entrepreneurship in large organisations is strangled by cumbersome legacy systems”

So let’s get this clear

An entrepreneur is the person who sees the totality of the business: its purpose, its assets, its customers.

“She holds the universe in her head”. Tech. Entrepreneur

Entrepreneurial behaviour:

•  Innovative

•  Taking measured risks

•  Measuring success other than financially

•  Have a strong sense of purpose

•  On the offensive

•  Embracing change accepting failure

•  Hunting

Corporate behaviour:

•  Consistent, repetitive

•  Avoiding risk

•  Measuring success financially and in the short-term

•  Not looking far into the future

•  Protecting, defending

•  Fearful of reputation

•  Farming

Is it even possible for Corporates to be entrepreneurial?

In our experience of working with 120 Corporates it is possible but it is constrained by:

•  Pressure to deliver short-term results.

•  Scale of the organisation. Scale leads to complexity and that takes the eye off the ball. The energy gets tied up in politics. Global Performance Consultancy

The “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”. Telecom.

So, what can be done?

“How do you resolve the dilemma that large organisations need to innovate and yet culture, structure and priorities prevent this?”

Through structure..

“You need to create a separate entity so as not to strangle the entrepreneur or disrupt the core.

That’s what Amazon does”

And 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”

Through leadership..

“Brave and diverse leadership can reduce the fear of failure in large organisations”

“If big organisations had bigger visions they’d be given more space to innovate by analysts”

“it’s about courage and leadership. People should not fear to fail”

and Culture ..

“Create a culture of honesty and openness”

“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.”

So, in summary, this group of global leaders and entrepreneurs think..

1.  Lead and inspire (internally and externally) around vision and purpose.

2.  Take the personal risk away for leaders and innovators. Celebrate failure.

3.  Coach leaders to embrace entrepreneurship and skill them to the task

4.  Build a personality around the best person in the business, not the lowest common denominator.

5.  Decouple ‘Business as Usual’ from Entrepreneurship. Create space & limit ‘blast radius’. Innovate in ‘pods’. Allowing some to break away doesn’t stop the organisation still doing what it has historically done well.

6.  Become good at socialising and developing ideas, not just having them.

7.  Make the reporting structure work FOR innovation, not against it.

8.  Redefine recruitment to attract & retain entrepreneurs (who least want to work for you), not luddites (who most want to work for you).

9.  Move closer to your customer. That’s where decisions should be made.

There is another way…

“Shareholder value often comes from doing what we do well and doing it again and again”

“Entrepreneurship requires time. You can’t innovate against quarterly reporting:

“So, let someone else create something new. When 50,000 people want to buy it then we’ll acquire the innovation”

“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?

We learnt..

“FACT: 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.”

“Mass unemployment is on its way. Culturally we need to learn to deal with this”

“We always overestimate change in the short terms and massively underestimate change in the long term”

And scarily…

“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.”

“If we are brave enough you can change in time”

“Being entrepreneurially minded is your only survival strategy in the world that is coming”