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Are you a frustrated entrepreneurial manager ?

Submitted by admin on Mon, 23/07/2007 - 22:33
Essentials fostering entrepreneurs in large organizations It’s an obvious statement that sustainable business growth requires effective entrepreneur-managers. What is less obvious, however, is how to nurture and support them within large organizations.

 

Not only are such managers few and far between, but the organization itself often discourages, or at least makes it extremely difficult, for them to stick their necks out in order to develop new opportunities.

What makes an entrepreneurial manager?

A successful entrepreneurial manager has three key attributes:

  • The ability to see new business opportunities before they are obvious to everyone else and communicate and market these ideas to the key stakeholders in the firm
  • The ability to mobilize the best team to develop such opportunities
  • The ability to lead project teams in an inspirational, non-hierarchical way

Such abilities are clearly dependent on an individual’s skills and strengths. However, even the most talented entrepreneurial manager can be limited, and even stifled, by organizational systems, structures, and cultures.

Obstacles to seeing opportunities

Sadly, most planning processes within large organizations tend to focus on glorified budgeting rather than homing in on new opportunities. Managers are often so stretched that they simply have no time for anything other than the day-to-day running of the organization and a focus on the short-term bottom line.

Managers are also more often pushed towards – and rewarded for – alignment and execution rather than looking for new opportunities. And while the CEO may talk about growth and strategic thinking, in reality he or she may only be pursuing a path of “protect and extend” and “more of the same”. This mis-match between words and actions can frustrate people who have new ideas.

Obstacles to mobilizing teams

The most appropriate people from around the company need to be brought together to develop a new opportunity. But in large, multinational organizations, entrepreneur managers may not have enough experience within the whole company to identify these people. To foster entrepreneurial managers, an organization needs to involve HR in the process to groom entrepreneurs through job rotation.

But even if the right people are identified, will they be willing to join the team? Incentives are extremely important if an organization is asking people to step out of their “safe area” into a risky project that may fail. The team members will also need some freedom from their regular work if they are to devote sufficient time to the project. Such issues are not always easily addressed in existing organizational structures and reward systems.

Obstacles to leading teams

An entrepreneurial manager clearly needs to be an inspirational leader – and also able to relentlessly pursue his or her idea until it reaches fruition. This can require an enormous amount of passion and commitment: Nestlé’s Nespresso system, for example, took 17 years just to break even.

A major obstacle here is that entrepreneurial characteristics often run counter to company culture. They must be allowed to take risks and make quick decisions – two things which traditional, hierarchical organizational structures may be averse to. Entrepreneurs also need the self confidence, ego, creativity and determination to drive their vision forward, but organizations often prefer people who are more conformist.

The role of the sponsor

The entrepreneurial manager may be stifled at various stages in developing an innovative idea. This is where sponsors become vitally important. They serve as the link between the entrepreneurial manager and senior management.

The ideal sponsor is someone from middle or upper management. Such a person could be reassigned into a sponsor role, either internally or as an external advisor, with the remit to search out entrepreneurial managers, support them and lobby for them. This role is not easy, but it is vital for creating an environment that fosters and enables entrepreneurship.

Many Japanese companies already do this – in contrast to those in the West, where valuable people with years of experience are often lost in the process of moving up the management ladder.

Fair play

There is one last issue that organizations need to address if they wish to foster entrepreneurial managers –reward. HR structures often don’t allow entrepreneurial managers to be appropriately rewarded. In addition, while they are not necessarily concerned with the level of remuneration, they tend to be extremely sensitive to its fairness. Key here is dialogue between the entrepreneur and senior management, to ensure that the entrepreneur feels appropriately recognized.

 

By Professors Peter Lorange and Bala Chakravarthy. (June, 2007)

Professor Lorange is The Nestlé Professor - Strategy and teaches on the High Performance Boards program. Professor Chakravarthy is Director of the Mastering Top Management Dilemmas program.

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