Over twenty years ago, I participated in research that looked into factors that made some organizations more entrepreneurial than others. Of particular interest to me was why large organizations differed in their innovativeness and entrepreneurial activities.
We found that in general entrepreneurial organizations differed from what we termed “traditional” organizations in several ways:
– View of the external environment — Entrepreneurial organizations seek to Identify opportunities. They tend to actively seek out change that can create new initiatives. Traditional organizations look at the external environment for threats to their core business, rather than for new opportunities.
– Strategy — Entrepreneurial organizations have a more proactive strategic posture, while traditional organizations take a more defensive position focusing on protecting their core business.
– Control Systems — Traditional organizations control primarily through expense-based budgets, while entrepreneurial organizations also look at longer-term business planning and forecasting to guide the business.
– Structure and Communication — Traditional organizations tend to be hierarchical, centralized and formal, while entrepreneurial organizations are more decentralized and have informal communication flow.
In short, these organizations have fundamentally different cultures.
So the question then becomes can a business that has become “traditional” over time as it grows and matures become entrepreneurial again?
My experience in working with many large businesses on this is that very few are willing to take the concerted and long-term efforts necessary to truly change their culture. Most often, they simply asked me to “make their managers more entrepreneurial.” But, without a supportive culture for innovation and entrepreneurship, these efforts are doomed to fail from the beginning. A few organizations have been able to change to a more entrepreneurial culture, but the larger the business the harder it becomes to make such a fundamental transformation.
My best advice is this — if you have an entrepreneurial culture make every effort you can to preserve it. You do this by:
– hiring people with entrepreneurial orientations and who already practice “entrepreneurial thinking.”
– reward innovative and creative actions independent of immediate success or outcomes.
– delegate, delegate, delegate.
– lead by example, making sure your words and actions speak loudly about your commitment to being an entrepreneurial business.
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