Sid Shah, managing director, Boston Consulting Group Digital Ventures, discusses the benefits of an entrepreneurial culture.
Just because a company is big, that doesn’t mean it doesn’t have to keep growing. Just like any other company, a Fortune 500 firm will be looking to keep their shareholders, their employees, their customers and their accountants happy. That could mean expansion of their core business, new acquisitions, or R&D in new growth engines that could eventually recalibrate the whole business.
At such a scale an entrepreneurial outlook can be invaluable. There’s a misconception that companies of scale should be naturally conservative, consolidating and low risk. That might have rung true for a mining conglomerate in the 1970s, but the fact is that nowadays new technology, combined with a fecund investment irrigation system, has all but destroyed the traditional barriers to market share. That puts a premium on entrepreneurial management like never before.
Creating an entrepreneurial culture in a large enterprise is difficult because you are combining a fail-fast culture with a steady, business-as-usual culture. The best qualities we associate with entrepreneurial culture – risk-taking, pivoting, seat-at-the-table, quick decisions, multi-disciplinary, founder led – will naturally jar with capital, brand, measured processes, benefits, consistency of paycheck, and reputation. So, the question is, how do you combine the two while showing all parties that you are investing for the future without damaging the core business?
Of course, a culture of entrepreneurship won’t mean you end up reinventing the wheel but it will allow you to move nimbly to maintain stable growth. This transformation could be as linear as developing a new product which makes your last range obsolete, or it could be as radical as reinventing your whole proposition to address or create a brand new market. Either way, it takes courage to trust your entrepreneurial approach and where it takes you.
There are a few key elements which are crucial to success.
Remember that culture takes time to build
Communication is critical to establishing faith in the project, so have the most senior management, including the CEO, as the ‘unofficial’ board of this initiative. They can remove red tape, take out bureaucracy, and support the intrapreneurs that are building the product or service. Make clear that you understand, expect and tolerate failures and pivots – and don’t expect change to happen overnight.
Don’t limit your scope with too much detail
Define a clear search area for the initiative, as over-briefing will inevitably end in failure because your KPIs will fail to align with the need to discover, fail and build. By defining a broad search area, your team is incentivized to figure out the right business or solution with room to pivot and/or change course as they get feedback from the market. Additionally, you’re not limiting your solutions from the start by making them adhere to superficial rules.
Give everyone an equal seat at the table
Put together a multidisciplinary team that can attack the problems from a lot of different perspectives, consisting of a GM and a product manager as well as people from engineering, design, growth and commercial, depending on the problem you’re trying to solve. And don’t forget that ideas don’t just come from the boardroom, and some of the most fundamental changes will be initiated – and implemented – on the ground floor.
Incorporate feedback mechanisms at every stage
This will reveal your ‘intrapreneur’ culture but it will also ground it in process, which can help you to build your own best processes when it comes to replicating this approach across other areas of the business. Additionally, it will emphasise the values you are trying to promote, predominantly around this being an educational process. You’ll also have better processes when it comes to decision making, giving you the ability to distinguish between good and bad risks, and move little and often rather than being overtaken by change and finding yourself having to make sudden existential decisions in the boardroom.
If you love something, let it go
A lot of firms have been able to spin off the research and innovation their entrepreneurial culture has afforded them, launching whole new entities within the brand, or whole new companies which can lead to a lucrative exit. In many ways, these developments are definitive of our tech age: DreamWorks Studios spun off DreamWorks Animations and eBay spun off PayPal. Google has so many internal spin offs it’s clear they’ve based their whole business model on intrapreneurialism. It’s hard to think of a better manifesto for building a culture of entrepreneurship within a business.
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