Building blocks of entrepreneurial organization: Lessons from culture cultivation in startups Protima Sharma Managing Partner, PeopleWiz Consulting December 2016

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Introduction

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Most organizations begin their evolution by innovating but tend to lose the entrepreneurial spirit as controlling growth takes precedence.

The relationship between innovation & entrepreneurial culture is well established in research and practice. This paper explores the tools that can be used by a leader to create an entrepreneurial organization.

An entrepreneurial culture is defined as a pattern of values, assumptions, and practices shared within an organization, that is centrally concerned with opportunities, where opportunity is the creation of new value to society in part or in whole (Wong, 2014).

Successful startups are able to stimulate creativity and initiative by building focus on opportunities, the essence of an entrepreneurial culture.

In an era where ‘Differentiation through innovation’ is a key theme for businesses (KPMG India CEO outlook 2016), building an entrepreneurial culture can provide a fertile ground for innovative product or service ideas.

This paper proposes a 5-point framework of an entrepreneurial culture based on study of practices, environment and way of working in startups.

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START Framework: Building Blocks of Entrepreneurial Culture

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designed for Speed

Technology as the foundation

Active Experimentation

collborative Relationships

Training through networks

START model provides a framework to understand entrepreneurial culture and insights into how such a culture can be cultivated. It shows what is valued the most by an entrepreneurial culture which can be a ready reckoner for a leader trying to cultivate such a culture in his or her organization.

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Implication for large organizations

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The innovative way of working, resourcefulness and enterprising nature of a startup can provide meaningful lessons to a large company that is trying to shed its hierarchical legacy for an entrepreneurial spirit. The following can be a good start

›  Successful startups show us time and again that it's the commercial ingenuity of an idea based on available technology that creates lasting impact.

›  Xerox regularly places marketing people in research and lab managers to understand customer needs. They train R&D personnel in business management principles to be able to create managers that know how to commercialize technology

Build a business oriented technology mindset

›  Intuit encourages people to take intelligent business risks by rewarding efforts in addition to results.

›  Organizations that inculcate appreciation for taking failure in your stride and attempting again can create space for innovation to survive.

Along with success, also reward intelligent failure

›  Because 3M was founded in the rural Midwest, many early researchers had farming backgrounds. They had studied science or engineering, but they grew up knowing that if the tractor broke in the field, you figured out a way to fix it. If you didn’t have the right tool, you made it.

›  Entrepreneurial organizations create empowered and independent employees that collaborate amongst one another to teach, learn, share and create.

Teach collaboration but breed independence

›  If 2 pizzas cannot feed a team, it’s too large to be productive. ›  Spin out strategy of Thermo Electron created multiple smaller organizations within a parent

company to give shape and strength to innovative employee ideas. ›  Intuit believes in creating multiple smaller decision making divisions to keep innovation alive.

Small is beautiful

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