Bringing Entrepreneurship into the Boardroom
5 September 2007 Damian McKinney
Entrepreneurship seems to be a hot topic at present, both in the media and in the business world. Damian McKinney explains how those with entrepreneurial attributes are seen as creative risk takers with a 'go it alone' attitude – quite different from the view of corporate business.
With successful businesses, such as Amazon or Virgin, headed up by individuals whose names would be near the top of anyone's list of true entrepreneurs, it is clear to see that an entrepreneurial flair is advantageous in the business world.
McKinney Rogers was interested to see how international CEOs and business executives viewed entrepreneurship and how they see it fitting into their company as the business world evolves.
The global business consultancy also sought to discover how opinions differ between geographies and markets and commissioned an international survey conducted amongst some of the world's largest organisations with some interesting, and at times, controversial results.
It is not surprising to discover that over two-thirds (69%) of both CEOs and middle managers believe it is important for large organisations to develop a core competency of entrepreneurship, particularly given today's business environment. Innovation and creative thinking is vital in a world where intense global competition and fast-moving environments are becoming the norm for many younger markets.
Finding a true entrepreneur in the senior ranks of a multinational organisation can be difficult. However, the CEOs questioned in the research said they do not want a traditional, non-experiential manager in their ranks – they want the 'blue sky' ideas and 'out of the box' thinking that will progress the business and turn out new and innovative products.
Entrepreneurial employees need the flexibility and empowerment to take the risks that come with generating these ideas. Business leaders in large organisations need to find the balance between shareholder and regulatory demands and allowing their employees the freedom to be entrepreneurial.
CEOS IN THE MAKING
The survey found that middle management and business executives were more open to an entrepreneurial approach to business when compared with CEOs in the same companies. Those surveyed, arguably the next generation of CEOs, were not only more open to this style of business, but also viewed the skill of entrepreneurship in a very different light.
Over half (56%) of the senior-level executives surveyed agreed with the commonly held view that to be an entrepreneur one must have innate qualities and a god-given flair for achieving success in the business world. This is in stark contrast to the number of middle management (25%) who disagreed with this statement.
Similar disagreement came from the two groups when asked if entrepreneurial skills can be developed. Nearly two-thirds (60%) of middle managers and business executives suggested the core skills of an entrepreneur can be developed compared to only 34% of CEOs.
There seems to be a divide between the business leaders of today and those of the future on this issue. Those rising though the ranks believe entrepreneurship is not unachievable but a skill that can be developed in the course of their climb to the top.
CEO, ENTREPRENEUR OR BOTH?
With the difference in responses to entrepreneurship development between CEOs and middle management, it is interesting to note the differences in their responses when asked about the attributes needed to be a successful entrepreneur and CEO.
Given a list of over a dozen personality traits, respondents were asked to rank which qualities were most important for entrepreneurs and which for CEOs. The general attributes that came top for entrepreneurs were high motivation, passion and energy, while being flexible and maintaining control were at the bottom.
CEOs were seen as strong communicators, decisive and highly motivated as opposed to being risk takers, flexible and independent – attributes that came bottom of the list.
Although there are some commonalities between manager and CEO responses to this question, it is the managers who see a blurring of lines between a successful CEO and entrepreneur. These qualities include being a strong communicator, passionate and a risk taker – again suggesting a shift in organisational management could already be underway.
Perhaps the most interesting and controversial results from the survey are seen when attitudes towards entrepreneurship are examined across different geographies.
Conducted across Africa, Asia Pacific, Europe and the US, the survey found that within emerging markets, such as Africa, a staggering 88% of respondents believe entrepreneurship is a skill which can be developed. In more established markets, such as Europe and the US, however, less than half (38% and 42% respectively) agreed with this statement.
In Africa, key factors that are seen as important for achieving entrepreneurship in large organisations include creating and developing new ventures and encouraging employees to take ownership of problems and opportunities. Interestingly, both these aspects are considerably lower down the list for business leaders in Europe and the US.
Emerging markets appear to be more open to entrepreneurship in their corporate environment than the somewhat rigid established markets. Less constrained by tradition, these emerging markets are perhaps more open to risk taking and creating a more flexible environment and culture that embraces entrepreneurship.
For older, more established markets to continue flourishing, they need to keep pace and this means adopting 'intrapreneurship', that is injecting some of the core entrepreneurial qualities into a large business and adapting the culture to allow this to match comfortably.
WHAT CAN BE DONE?
Large businesses need to establish a culture of risk taking which will draw out the entrepreneurial skills of its employees. For this to be achieved managers and senior executives need to lead by example and take risks themselves, acknowledging failures will occur and these are par for the course when adopting a more entrepreneurial culture to the business.
If those at the top level of business are prepared to push their professional boundaries in order to succeed, their employees are likely to do the same and develop their own entrepreneurial spirit in turn.
In addition to risk taking, it is vital for employees to have a sense of ownership and empowerment over their work. This comes about when a manager explains the 'what' and 'why' behind a project or task, but gives their team the freedom and flexibility to accomplish the mission in the most appropriate way they can (the 'how').
By encouraging a risk-taking culture, where teams are empowered and take ownership over their projects, businesses – particularly in established markets – can make the shift from a traditional, rigid organisation to one that embraces and embodies entrepreneurial qualities to revitalise itself and stay ahead in the modern business world.