People management secrets behind entrepreneurial success
The UK’s economic growth could be boosted if large firms adopted the entrepreneurial spirit that drives so much value in start-ups and small firms. According to new CIPD research, by encouraging a culture of ‘intrapreneurialism,’ big businesses could help their employees adopt entrepreneurial behaviours that foster innovation and growth.
The buzzword ‘intrapreneurs’ was coined in the 1980s by management consultant Gifford Pinchot and is often used by organisations that recognise the need for new and innovative ideas. Unlike entrepreneurs, who tend to run their own small start-up organisations, intrapreneurs usually work in larger organisations where they’re tasked with developing new ideas and concepts like an entrepreneur would.
In the first of a three part series of reports examining the people management factors that make entrepreneurial businesses so successful, ‘Entrepreneurial spirit driving growth,’ the CIPD reveals that 37% of employees would welcome the opportunity to take on an ‘intrapreneurial’ role within their organisation, but just 12% of organisations encourage and facilitate such behaviour1. Given that the UK’s entrepreneurs have grown sales by an estimated 20% year on year2 and that SMEs contribute 52% of private sector gross value added to the UK economy3, the CIPD is urging employers of all shapes and sizes to consider what they could gain by adopting a more entrepreneurial approach to business – be that by allowing intrapreneurs to thrive within their organisations or mirroring some of the other people management practices successful growing businesses tend to adopt.
Microsoft and Alcatel-Lucent, both famed for providing intrapreneurial environments for their employees, are featured in the report, alongside entrepreneurial SMEs like Little Dish and A Suit that Fits who share their ‘secrets to entrepreneurial success.’ The CIPD believes these insights provide useful lessons both for larger companies wishing to instil an entrepreneurial spirit within their organisations, as well as for small start-ups that are hungry to grow but keen to retain their innovative and entrepreneurial edge.
According to the CIPD’s Claire McCartney, author of the report, the top five secrets to success are:
1. Purposeful Profit – it’s ok to care
Entrepreneurs have a genuine desire to make a sustainable difference to their local communities and beyond and instil these values throughout their organisations. This clearly distances them from the sometimes unacceptable and uncaring face of larger corporates.
2. One part entrepreneurial = twenty parts reach and impact
Entrepreneurial organisations are not limited by their size, resource or money. Their entrepreneurial leadership and practices enable them to punch far above their weight. And, by catalysing with other elements they create more value; clever use of social media, smart networking and multiple strategic alliances all significantly amplify their impact and reach.
3. Deep and deliberate co-creation with customers
Where entrepreneurial organisations really stand out is in their deep co-creation with clients and customers. This involvement goes way beyond simple one-sided communication to active involvement in shaping and even sponsorship of business strategy. They really listen to their customers and draw on their ideas and requirements to keep the business and brand fresh.
4. Headspace for innovation – support your hidden intrapreneurs
A common theme across all the organisations involved in this research is the emphasis they place on employee innovation. They do this by supporting intrapreneurs using innovation days and cross-team working. Employees working daily with customers on the front line have the creative sparks or ideas that could really make a difference.
5. Go forward with failure
Finally, fear of failure does not stop entrepreneurial organisations from doing things differently and innovating. In fact very little, if anything at all, holds back the entrepreneurial leaders and organisations featured in the report. They recognise that in order to create and innovate some failure is inevitable and realise the great potential in learning from mistakes and failures and even publicising these as part of the learning process.
Holly Tucker, Co-Founder of online marketplace notonthehighstreet.com, said: “Big businesses can learn a lot from this advice. We started in 2006 with just a handful of people and passionate belief in what we were doing. As such we recruited people who shared our vision and values; they were completely aligned to where we saw ourselves and the business going. We’re incredibly successful because of the quality of our workforce; and we really listen to what our customers want. Our employees have space to grow professionally in a nurturing environment and develop their passion for innovation, driving our business forward.”
Claire McCartney, Research Advisor at the CIPD, said: “There’s no doubt that a successful business depends on innovative ideas and sound market strategy, but this report shows that good people management is crucial to the long term success of any business. As start-up companies grow, it can be easy for the entrepreneurial spirit that made it so successful in the first place to wane, but the companies we’ve spoken to have proven that even the largest organisations can retain an innovative edge if they pay close attention to attracting, retaining, engaging and developing the right talent to live and breathe the values of the founders.”