Despite the best intentions, too much success may ultimately lead to failure as employees in well-established companies focus on maintaining the status quo and following procedures instead of looking for new opportunities. Executives ultimately get a wake-up call when a svelte competitor swoops in and seizes market share by capitalizing on an untapped opportunity.

“When things are going well, it’s natural for companies to thrive on their own logic and nurture a culture that resists change,” says Dr. Glen Taylor, director of MBA Programs for Global Innovation at California State University, East Bay. “But if you don’t consider new ideas and opportunities, eventually you’ll hit a dead end.”

Smart Business spoke with Taylor about the techniques that help executives infuse an entrepreneurial spirit into mature companies.

How can executives begin the journey toward an entrepreneurial culture?

Entrepreneurs are found in all types of organizations — small and large, business and government, whether people are paid or act as volunteers. If you act like an entrepreneur you are an entrepreneur. It is a behavior, not a job title. An entrepreneur is a person who is good at spotting opportunities, good at mobilizing resources to pursue an opportunity and willing to act on the opportunity. Finding opportunities requires a new frame of mind or attitude,  thinking outside the box and challenging the status quo. Entrepreneurs shake things up by injecting different points of view into the organization and then leading the way to test the waters to see if there is real potential for something new.

Well-established companies can do many things to encourage entrepreneurial behavior. Managers can encourage divergent thinking by welcoming guest speakers who offer unorthodox ideas or impart pointed observations about the company and industry. For example, an outsider may propose a direct sales model in lieu of traditional distributors or using social media to embrace a new generation of customers. Managers can also initiate internal conversations that challenge employees to step outside their comfort zones and suggest new ideas. Insights about new opportunities can come from anywhere in the organization. Making room to discuss new opportunities can foster a spirit of collaboration and enthusiasm. But in the end, it takes more than ideas and talk. It takes a commitment of resources and a commitment to take action to achieve entrepreneurial results.

How can executives control expenses and still invest in new ideas?

Entrepreneurs are not loners. They usually do best when they build strong partnerships, sustained by a network of supporters who share the vision and who provide a sounding board that fuels the creative process. Small groups of dedicated employees who share a similar vision and are willing to support each other during the incubation process are the ones most likely to succeed in marshalling resources, building prototypes and conducting pilot tests to move forward in a relatively inexpensive and risk-free way to assess the merits of a new opportunity. Experimentation means failing early and often, and learning from the experience to keep moving forward.

 

Why is it necessary to modify organizational incentives?

In mature companies, the organization might be silently fostering competing agendas with incentives that discourage experimentation and impede the creative process. It’s up to executives to assure seamless support for innovation across the enterprise by recognizing and rewarding entrepreneurial behavior. This might require separating responsibilities for new initiatives. If entrepreneurial employees get frustrated and leave, the organization will soon be drained of its creative talent.

What other changes inspire innovation?

Unless companies embrace people with diverse views, the corporate culture will continue to support the dominant view and resist new ideas. People learn through experience that they have to act in a certain way or follow specific protocols to be successful. Entrepreneurs often feel like outsiders and seek greener pastures. Corporate cultures that embrace diverse values and perspectives can infuse an entrepreneurial spirit into the culture.

What else can executives do to support cultural transformation?

Trust is the engine that powers innovation, because, without it, employees will be reticent to suggest new ideas or worry that a failed venture may damage their careers. Executives are responsible for engendering trust by setting realistic expectations and time frames for pilots and experiments and by treating failure as a learning opportunity.

Unknowingly, executives often stifle creativity and reinforce the status quo through their actions and responses, so it’s critical that they set the tone by modifying their behaviors. Show support for the creative process by hosting executive forums or roundtable discussions where employees can share ideas. Since innovation is a social process, encourage collaboration by asking employees to talk about their endeavors in meetings and online forums. But do more than support talk — support action. Finally, generate enthusiasm and raise spirits by celebrating small wins, recognizing employees who suggest bold ideas and applauding cultural change.

Dr. Glen Taylor is the director of MBA Programs for Global Innovation at California State University, East Bay. Reach him at glen.taylor@csueastbay.edu or (808) 203-3818.

Published in Northern California