Introduction - Entrepreneurial
Recent focus on the information and knowledge economy is now changing to entrepreneurship and generating entrepreneurial mindset as a solution to growth and development
"...there is no science to being an entrepreneur; but there is a method..."
Ryan Trainer as quoted by John Stensholt, 2014
Entrepreneurship is a skill
The definition of entrepreneurship should be divorced from risk. Many people associate entrepreneurialism with risk-taking. Yet most entrepreneurs have evaluated and thought of ways of handling the risk in any venture.
Some quotes from Peter Drucker are
"...The best way to predict the future is to create it..."
Peter Drucker as quoted by Fortune Magazine, 2006a
"...Any business enterprise has 2, and only 2, basic functions - marketing and innovation..."
Peter Drucker as quoted by Al Ries, 1997
Furthermore, he stated entrepreneurs are people
"...who create something new..."
Peter Drucker as quoted by Geoffrey Colvin, 2005b
"...Entrepreneurs often have a temperament and a constellation of traits that can create enormous value but are also associated with significant risks......have mental health profiles that are associated with higher levels of creativity, higher levels of energy, higher levels of risk tolerance and higher levels is impulsivity. Another way to look at impulsivity is a need to speed, a sense of urgency, higher motivation and greater restlessness..."
Michael Freeman as quoted by James Stewart 2018
"...These people are just wired differently. They're quick to spot and act on opportunities, but that same tendency can get them into trouble in other situations..."
Scott Shane as quoted by James Stewart 2018
"...There are a number of behavioural destabilisers in the world of entrepreneurship and sleep deficiency is high on the list. The consequences can be impaired functioning,, higher irritability and judgement can be adversely affected......It's also a common trait of entrepreneurs that they feel rules don't apply to them. From their perspective, 'many rules get in the way of getting things done'......There are some simple strategies of dealing with impulsivity, like sleep on something overnight and get a second opinion..."
Michael Freeman as quoted by James Stewart 2018
There needs to be
"...Balancing corporate responsibilities, and the constraints they can impose, against the creativity that made the corporation great in the first place is much more of an art than a science...... directors and lawyers need to credibly manage their balance......founders need to be willing to consult with them, recognising that the advice - even if it slows things down - they simply reflect the realities of the day..."
Charles Whitehead as quoted by James Stewart 2018
At the same time
"...Organisational innovation has always lagged behind technology innovation..."
Gary Hamel as quoted by Catherine Fox, 2007l
Many organisations that downsize, practise cost-cutting, etc have found that they cannot shrink their way to success. Furthermore, they have found they cannot grow rapidly by tweaking existing services and products, diversifying, merging, forming joint ventures/partnerships/alliances, etc, take-overs, moving to developing countries, etc. As a result and
"...because of maturing technologies and aging product portfolios, a new imperative is clear: companies must create, develop and sustain innovative new businesses..."
David Garvin et al, 2007
As organisations grow, they become less flexible and as a result, maintaining the pace of growth becomes harder. This forces organisations to search for new sources of revenue (markets, products, services, etc)
Disruptive technologies facilitate the emergence of new markets but initially it may not be very lucrative
"...there is no enduring formula for creativity......When we attempt to production innovation we breed out the very thing we trying to raise: the creative destruction that stokes and re-stokes the fires of capitalism..."
Alex Payne as quoted by James Hutchinson, 2014b
Research is showing (Patrick Durkin, 2014) that many large organisations don't understand what innovation is, how to encourage it or even how to measure it. Some examples, innovation is not included in the key performance indicators, there is no policy or structure to learn from failure, etc
"...companies are fundamentally risk adverse and innovation requires you to embrace risk..."
David Munn, 2014
There are 3 components to innovation
i) efficient innovation (produces the same product more cheaply like an automated production line, etc)
ii) sustaining innovation (changes a good product into a better one, like hybrid cars, etc)
iii) disruptive innovation (transforms an expensive, complex product, service or business model into affordable, simple ones, sometimes using different channels to access customers like smart phones, social media, etc)
The third one can fundamentally change the economics of an industry overnight and presents the greatest potential for growth. On the other hand, they are generally a small percentage of all innovations.
How to embed innovation in your organisation's culture
- encourage risk-taking by defining where you are willing to take risks and lead by example
- engage employees to streamline operations, etc
- recognise success and/or worthy failures
- engage with all stakeholders, especially customers
- use social media, technology, etc to get feedback
- implement good ideas quickly
For example, Google allows 20% of their engineers time to be dedicated to free work, ie explore new ideas and think about things to try to come up with the next new idea. Need to allocate more than time and staff to innovation. Need to encourage the willingness to try a new challenge and reduce the fear of failure so that it's safe to fail, ie if there is no willingness to fail, you have no hope of success
NB "...Ideas are a dime a dozen, people who implement them are priceless..."
Mary Kay Ash as quoted by Patrick Durkin, 2014b