In the April 26th Indianapolis Star Michael Goldsby the executive director of the Entrepreneurship Center at Ball State University wrote a very good My View column titled “The game has changed for entrepreneurship.” Dr. Goldsby, an expert on the field, makes the argument that currently policy makers and companies view entrepreneurship as primarily composed of small business startups and that this is a mistake. By only looking at small business we are missing a large segment of the economy since continuous improvement coupled with continuous innovation is the magic formula for a company’s success. He states that companies of all sizes need entrepreneurial thinking to compete successfully in the 21st Century and suggests that schools must craft curricula to teach creative problem solving and innovation that can and will be used to drive innovation in small and large companies.
I agree with everything he is saying. Problem solving, how to effectively manage risk, and more importantly how to think creatively are critical skills that should be taught in every management school in the country. I also add that we won’t succeed in converting our medium to large companies into entrepreneurial powerhouses until we seed and grow a culture with current company management that promotes rapid experimentation and accepts short term failures as a learning event to prepare for long term success.
So why is entrepreneurship composed of mainly small business start-ups? I think a small company is an ideal climate for entrepreneurial thought. The stakeholders are usually willing to bet the farm and risk their jobs and financial wealth on an idea. Successful entrepreneurs have passion and are able and willing to focus on the key success factors for getting a product or service to their customers. The management team is a critical piece of the puzzle. Successful management team members are judged not on what they have done in the past but what they can contribute in the future. Each member must be willing to roll up their sleeves and participate in multiple tasks for the venture to succeed. It is OK to fail as long as information is learned. Timelines are short. Milestones are measured in weeks or months. Who knows where anyone will be in 5 years. The key is to enjoy the moment. If the basics are done right success will follow.
So how does a large company foster an entrepreneurial culture? Many years ago I started my post MBA career at a large company here in Indianapolis. At the time one of the selling points to join the company was that it was managed by consensus. I got an excellent education in business and worked with some of the best individuals I know but one thing I learned very early on was that consensus did not promote or reward risk taking. If 100% of the decision makers had to agree that an innovative idea was worthy of a risk before it was approved there was usually one member willing to kill or postpone it until one of our competitors tried it first. Decision makers were worried about failure. Some found it was much easier to go along with the status quo than try something different and find him or her knocked off their career track.
That is not to say that entrepreneurship in large companies will never happen. 3M is known for spinning off numerous companies based on internally developed technology. Apple over its lifetime has continuously reinvented its product line to lead the field.
I agree with Dr. Goldsby that if large companies in Indiana embrace the role they play in an entrepreneurial society the entire state will thrive. The challenge is how can we encourage them to do so.
- The first thing is that the company must make a long term strategic decision from the top down that in order to promote game changing innovation they need to accept diversity of thought in their organization and also provide a safety net for entrepreneurs that try but fall short of a goal.
- Second they need to cross pollinate by hiring or contracting with individuals from businesses outside of their traditional environment to provide input to product and/or business development teams. A pharmaceutical company could benefit by hiring someone with a consumer goods background, an airline could hire an individual with an expertise in promoting widgets who also flies a lot, a company wanting to compete using social media should add a few 20-something employees that text their friends rather than call them. These new members should encourage companies to think outside the status quo and consider non-traditional change.
- Finally companies should not expect to change overnight. Mount Everest is not climbed in a day or even a week. The process takes months and involves conquering numerous milestones to get to the top. The road to game changing innovation is littered with hazards. Successful companies are the ones that do their homework, provide a supportive environment, take calculated risks and allow their employees to spread their wings and enjoy the process.
Until next time – all the best!