Seeking out the entrepreneur in your ‘shipping department’
Entrepreneurship is a corporate-wide rather than an individual responsibility, so companies should encourage entrepreneurial thinking of employees, some of whom may be hidden in the organisation, argues IE Business School’s Joseph Pistrui.
It’s sometimes hard to believe, but just 11 years ago none of the following existed: iPhone, iPad, Kindle, 4G, Uber, Airbnb, Android, Oculus, Spotify, Nest, Kickstarter, Stripe, Square, Instagram, Snapchat, WhatsApp.
But what became of the incumbent companies and industries that were swept up in this tidal wave of innovation? Sony, and its Walkman cassette player, lost its edge when Apple entered digitised music. Global hotel chains had to learn how to compete with vacant home space. And publishers have lost countless sales to Amazon’s Kindle e-books.
Today, no company is truly safe. As Richard Foster and Sarah Kaplan note in Creative Destruction (2011): ‘Of the S&P 500 companies in 1957, only 74 were still on the list in 1998 and only 12 outperformed the index itself over that period. By 2020, more than 375 companies in the S&P 500 will consist of companies we don’t know today.’ It’s no wonder that a McKinsey survey found that 84% of the executives thought innovation was important to their growth strategy, and 80% thought their current business models were at risk. Yet, less than 10% were satisfied with their innovation performance.
Some major corporations have responded by designating a person to be a ‘Chief Entrepreneur.’ But entrepreneurship is more a corporate-wide rather than an individual capability—a point well made in a Harvard Business Review article ‘Why Everyone Should See Themselves as a Leader.’ I would add that the critical aspect of employee leadership is also to help their own companies to think in a more entrepreneurial way.
That is why you should look for the entrepreneur hidden in your shipping department or anywhere else in your company. As I explain in a recent HBR article, the best way to find such talent is to create ‘leadership circles’, an egalitarian discussion group of employees selected from across the entire firm that feels free to express their opinions and ideas about any big questions affecting the firm. Group members’ only obligation is to be ‘open, honest, and committed’ about each other’s ideas. Most importantly, they are not there to represent the viewpoint of their own department or to focus on day-to-day operations; they are there to talk about the future of the company.
No single executive can comprehend, let alone manage, the enormous changes affecting his or her business. But a leadership circle can draw forth different entrepreneurial types that might help show a way forward. These types include:
- The focused entrepreneur – interested mainly in leveraging how the firm operates through new technology or systems improvement;
- The incremental entrepreneur – who suggests small improvements in the current business model that make better use of company expertise, position or networks;
- The playful entrepreneur – a more creative thinker who might suggest entirely new ways of doing business, or even entirely new businesses;
- The exponential entrepreneur – who may propose seemingly unrealistic or breathtaking ideas, such as Sir Tim Berners-Lee’s idea for a world wide web in 1989, that might just work, or at least fire up the imagination of others; and finally
- The kinetic entrepreneur – who moves easily among the above types as and when necessary, while focusing on what realistically can be done now.
The purpose of the circle is not to implement new ideas but to allow entrepreneurial thinking within the company to bubble up. As KPMG’s Bruce Pfau once noted: ‘In most admired companies, key priorities are teamwork, customer focus, fair treatment of employees, initiative and innovation. In average companies the top priorities are minimising risk, respecting the chain of command, supporting the boss and making budget.’
But the companies most likely to flourish in coming decades will be those that tap into the minds of as many employees as possible, stimulating their thinking and in turn learning from their ideas.