Entrepreneurs stand out in a crowd. They like being their own boss. They think big, take risks and shrug off failure. When they feel stifled or bored, they either change their environment or leave. But do not let them go. Your organisation needs them.
The entrepreneurs on your payroll are the pioneers who spark new enterprises, products, services and processes.
They see opportunities that others miss and create value for everyone around them, including customers, employees, shareholders and communities. While some entrepreneurs prefer the freedom of starting their own companies, you have assets in your organisation that can entice many to stay. Organisations in the commercial, social and public sectors all show results when they invest in the development and retention of entrepreneurs.
As organisations grow larger and stabilise, natural barriers to entrepreneurship emerge. I explore these barriers and offer solutions in my new book, Corporate Entrepreneurship: How to Create a Thriving Entrepreneurial Spirit Throughout Your Company (to be published by McGraw-Hill in September), co-authored with Thunderbird School of Global Management researcher Claudine Kearney, PhD.
Corporate entrepreneurship involves overcoming the inertia, rigidity, rules and bureaucratic roadblocks that entrepreneurs hate. Senior managers must address key challenges in three areas – corporate culture, communication and compensation.
Corporate culture
Coming to work needs to be fun for entrepreneurs. They need flexibility to explore ideas, tackle challenges and make mistakes. Sometimes they need to stare out of a window or go for a walk.
This is fine if they work for themselves, but corporate paychecks come with bottom-line responsibility. Public companies must answer to shareholders, regulators and tax collectors. Freedom must have limits.
The key is compromise. American Greetings in Cleveland, Ohio, showed the right balance when it moved into the online greeting card business in the early 2000s. The company established a subsidiary for its online cards in a separate building away from the formal offices.
Instead of a receptionist sitting behind a desk, guests find workers dressed in T-shirts working irregular hours, eating pizza and sometimes playing table tennis. The subsidiary operates within the corporate structure but rewards different types of behaviour and output. As a result, innovation has flourished.
Managers who invest in this type of corporate culture find they can never return to the old way of doing business. Once their teams experience a model of controlled freedom, they get entrepreneurship in their blood and never want to change back.
Communication
Another key to keeping corporate entrepreneurs happy is to communicate the benefits your organisation provides. Entrepreneurs who operate in the corporate structure never will achieve the multimillion-dollar payoffs that come with breakthrough start-ups, but their chances of success rise dramatically when they tap into your marketing, finance and accounting resources. Corporate entrepreneurs need to understand this. You need them, but they need you.
Compensation
Another aspect of communication involves listening to the needs of your best employees when it comes to compensation. Entrepreneurs who pass up the prospect of a lucrative initial public offering or private equity buyout still need fair pay for the value they create within your organisation.
Creative and responsive managers consider economic and non-economic rewards. Economic rewards start with base salary but might include stock options, performance pay and other bonus systems, perhaps college tuition assistance for the entrepreneur’s family.
On the non-economic side, managers might offer flexible hours, generous vacation time, project autonomy, support of various social initiatives, or even preferred car parking. People are the most important asset of any organisation.
This is the hardest thing for competitors to replicate. Managers who take steps to keep their entrepreneurs happy give their organisations an edge.
This article has been reproduced with permission from Knowledge Network, the research journal of Thunderbird Global School of Management, knowledgenetwork.thunderbird.edu/research/