By Dr. James Eyring, Chief Operating Officer, Organisation Solutions
Recently, a sales leader (let’s call him Tony) happily told me about a series of failures his team experienced as it tries to create a new sales model for their markets. He was excited because his team was learning a lot and he was confident these learnings would pay off in the long-term. He was being a great entrepreneur.
Entrepreneurs like Elon Musk, Steve Jobs, or Richard Branson capture our imaginations. We think they have special skills or ideas that help them create new products, disrupt markets, and drive growth. However, by idolizing them, we run the risk of not building entrepreneurism in ourselves or in our companies.
Entrepreneurism is the strongest predictor of a company’s revenue and profit growth.1 It is not simply about having an Elon Musk or Steve Jobs at the helm of your company. Instead, it is about building entrepreneurial capabilities such as innovativeness, risk taking, and proactivity throughout the organisation.2 And, it is about building a culture that allows these leaders to thrive. Here are three factors that will help you build your own and your company’s entrepreneurial DNA.
1.Create an Abundance Mindset
For growth, you need entrepreneurial behaviour at every level of the organisation. Having just a handful of entrepreneurs is not enough to propel company growth. Many companies with stagnant growth (e.g., IBM, HP, Cisco, and many others) try to hire leaders from the outside, implement processes, or set up innovation labs to ignite growth. But lone entrepreneurs are unlikely to succeed in mature companies. And implementing a new process is not going to change a slow-moving, risk-averse culture. If you want your company to be more entrepreneurial, then you need to change mindsets and culture at every level.
Companies like Google have an abundance mindset when it comes to entrepreneurial talent. They expect all leaders to think big, innovate, and proactively take risks to drive growth. By rewarding and promoting leaders with these capabilities, they systematically build and reinforce a culture that can continuously drive growth. By doing this at every level, they build entrepreneurism into the company’s DNA.
Our sales leader, Tony, was demonstrating this abundance mindset by having each member of his team involved in identifying and pursuing new business model opportunities. Every salesperson is innovating in some way. By doing this, Tony’s team is building a reputation for innovativeness amongst their peers and he is preparing these sales managers for future roles.
2.Build a Growth Mindset
Leaders and companies need to BELIEVE that they can develop entrepreneurial skills and capabilities. Publicity around famous entrepreneurs like Branson and Bezos lead us to believe that entrepreneurs are born with special talents and other leaders cannot develop these skills. However, research shows that leaders can absolutely learn entrepreneurial strategies, tactics, and routines. Training in entrepreneurship even leads to more successful start-ups.
Companies and leaders need to develop a growth mindset about entrepreneurial skills. They should stop believing that entrepreneurs are different and start learning strategies, tactics, and routines that allow them to develop entrepreneurial capabilities. Not all leaders have to be great entrepreneurs, but all leaders can learn some entrepreneurial skills.
Through his actions, Tony is building a growth mindset in his team. He is pushing his team to carry out multiple experiments to see which work. When an experiment fails, he captures learnings and encourages his team to modify their approach. With every iteration, each member of his team is learning to be proactive, take risks, fail fast, and learn.
3.Develop Collective Leadership
Most leadership development programmes focus on building individual leader capabilities. With entrepreneurism, you need to develop collective leadership capabilities. Many of us in corporate life know all too well that bureaucracy, politics, fear of failure, risk processes, and push-back from peers are sure-fire ways to kill new ideas. All too often, entrepreneurial energy is worn down or results in companies firing entrepreneurial leaders who keep rocking the boat. These issues are almost impossible to solve in leadership programmes designed to improve individual leader skills. However, they can be addressed when leadership development is designed to build specific capabilities for intact leadership teams or groups of leaders within a division or function.
For example, we worked with a company to increase innovation in their organisation. Leaders across their marketing and sales teams went through multiple workshops where they learned about leading innovation and driving change. Between workshops, they engaged other parts of the organisation to create new business opportunities and a pipeline of innovation ideas. Senior management reviewed and approved resources to support the innovations, but the leaders undergoing development were responsible for identifying, scoping, pitching, and implementing the innovations. The leaders built new capabilities and the organisation built a culture of innovation that resulted in millions of dollars of new products and services.
On a smaller scale, Tony is doing the same thing. By having his team pursue innovative ideas, he is building team capabilities that will help them perform beyond just achieving their day-to-day targets. To have even more impact, he will need to identify how to scale what he is doing to a larger part of the organisation.
Entrepreneurism drives growth. Tony was pursuing opportunities to develop a new business model even though he was already growing revenue at 50%+ year-on-year. He wanted to sustain or accelerate this growth even further. Building this desire, the capabilities to innovate, and a culture to support risk taking across the organisation is difficult. However, it is easier when you remember that every leader and organisation can build entrepreneurial skills.
1 Bahadir, S. C., Bharadwaj, S., & Parzen, M. (2009). A meta-analysis of the determinants of organic sales growth. International Journal of Research in Marketing, 26(4), 263-275.
2 Rauch, A., Wiklund, J., Lumpkin, G. T., & Frese, M. (2009). Entrepreneurial orientation and business performance: An assessment of past research and suggestions for the future. Entrepreneurship theory and practice, 33(3), 761-787.
Dr. James Eyring is the Chief Operating Officer of Organisation Solutions and leads the global consulting practice. In addition, he specialises in leadership and talent management and works with companies and executives to build capabilities they need to fuel future growth. As part of his role, he provides coaching to global and top regional leaders. Contact James