Retaining a spirit of entrepreneurship in a growing business

Entrepreneurship almost invariably serves as the bedrock of a small business, but over time that bedrock may be eroded and replaced by something quite different. Growth is often accompanied by a marked transformation of outlook, with the spirit of innovation gradually ceding to incrementalism or, worse still, stagnation.

In contemplating the threat of this metamorphosis we first need to ask a fundamental question: what defines an entrepreneurial organisation? For many people the knee-jerk reply might centre on individuals rather than enterprises, but it should be noted that companies founded by entrepreneurs are by no means guaranteed to stay entrepreneurial forever.

It may be better to argue that an entrepreneurial organisation is one whose spirit of innovation endures. By way of illustration, let us briefly examine the trajectories of two companies established by legendary entrepreneurs: Ford and Apple.

Henry Ford pioneered a completely novel way of doing business. The practices and procedures he introduced were genuinely revolutionary. On balance, it seems reasonable to suggest that the Ford Motor Company, for all its lingering global firepower, is no longer readily associated with the dynamism and inventiveness that characterised his groundbreaking stewardship.

Steve Jobs transformed the sphere of computing. Although the term is routinely misused, he was in many ways a visionary. Today, six years after his death, anyone tasked with listing the most innovative companies in the world is still likely to include Apple on the roll of honour.

So why have the likes of Ford drifted into a state of comparative inertia while the likes of Apple have managed to remain innovative? Why do some companies all but forget a formative legacy of entrepreneurship while others build on it?


Recruitment and retainment

One explanation is that businesses that consistently stay ahead of the curve make a point of recruiting and retaining employees who will sustain an entrepreneurial perspective. They attract and keep hold of individuals who will value and even add to the prevailing vision, mission and culture.

To achieve this, needless to say, they must first have in place policies that are geared towards identifying the right people. They must pinpoint precisely the attributes they are looking for, and they must do everything they can to find them.

Consider, for instance, the radical approach adopted by Steve Leach, founder of digital advertising agency Bigmouthmedia. Leach knew he wanted recruits with an entrepreneurial attitude towards sales, so he set out to shed light on exactly that.

One of his ideas was to invite candidates to try to sell him their own shoes as part of the interview process. An unorthodox but effective ploy, this enabled him to spot the qualities he felt would preserve his company’s competitive advantage while at the same time allowing would-be employees to get a taste of Bigmouthmedia’s style.

Successful recruitment, though, is only half of the story. What about fostering loyalty? It would be foolish to deny that financial packages have their place in rewarding and retaining talent, but it is well worth remembering that entrepreneurs also thrive on being challenged.

Steve Jobs, for instance, encouraged the development of the iPod by asking his team to work around the slogan “A thousand songs in your pocket”. He also recognised that innovation entails risk and that risk, in turn, may lead to errors. It is vital to acknowledge that allowing people to exercise their minds could result in an occasional mistake or two – particularly since errors are central to how we progress.


Entrepreneurship as an organisational construct

Entrepreneurship is habitually viewed as the preserve of a select few – charismatic leaders, R&D types and so forth. You might even think we have reinforced this impression by touting Steve Jobs as an exemplar.

Strictly speaking, though, we haven’t been praising Jobs. We have been praising the ongoing organisational construct of the company he established, because it is the enterprise as a whole – not the formative contribution of the founder – that keeps the spirit of innovation alive.

With that in mind, the likes of Apple, Google and other 21st-century tech giants might not even be the ideal touchstones. Although their product ranges and share prices are certainly not to be sniffed at, these are still young businesses in the great scheme of things. They need to stay at the cutting edge for a while longer if they are to fully prove their credentials.

Instead we might usefully cast admiring glances in the direction of firms such as Unilever and 3M. These are organisations that have remained entrepreneurial for decades, and they have done so by attracting the right people and making sure recruits discover a culture that persuades them to stick around.

Of course, very few small businesses grow into an Apple or a Unilever or a 3M. Yet it is worth recalling that every one of these was small once, that none of them became huge overnight and that each of them, despite the size they have reached, has never lost sight of the power of entrepreneurship and innovation.

The last point is perhaps the most important of all. Ultimately, whether an enterprise boosts its workforce by a handful of employees or aspires to global domination is neither here nor there. Regardless of the degree or pace of growth, maintaining an outlook characterised by entrepreneurship and innovation is likely to prove pivotal in shaping an organisation’s longer-term future and in determining whether the road ahead will bring a journey of ceaseless discovery or culminate in a dead end.


Simon Mosey is a Professor of Entrepreneurship and Innovation at Nottingham University Business School, Director of its Haydn Green Institute for Innovation and Entrepreneurship (HGIIE) and co-author of ‘Building an Entrepreneurial Organisation’.