There are four essential traits managers should aim to replicate if they are to successfully nurture corporate entrepreneurship in their companies, according to Professor Véronique Bouchard of emlyon Business School, author of a new book on the topic.
In ‘Corporate Entrepreneurship’, to be published by Routledge in November, Prof. Bouchard, along with co-author Alain Fayolle, explore a wealth of real life case-studies from companies that have successfully developed a culture of entrepreneurial thinking. In doing so, four key traits of successful corporate entrepreneurship emerge:
Decentralisation: Companies that wish their employees to be entrepreneurial must have flat management structures. Bouchard says: “In order to foster an entrepreneurial environment companies should be as flat as possible. If there are too many management levels and lines of reporting decisions take too long to make. Slow decision making kills corporate entrepreneurship.”
Risk taking: Corporate entrepreneurs can only operate in a company that is open to a certain level of risk taking. In order to promote this culture, companies should identify role models who embody a spirit of entrepreneurial thinking and promote this as an ideal. “Managers should discuss the successes and failures of role models to let employees know that taking risks in the pursuit of entrepreneurial ideas is encouraged.”
Formal processes: Simple, formal processes to assess entrepreneurial projects must be in place. If a project is given the go-ahead, it must then be supported. “Corporate entrepreneurs need to be assessed as they develop their projects – and then supported with money, time and company resources.”
Open communication: Companies should encourage and facilitate open communication between employees and different business units, if corporate entrepreneurship is to thrive. Gatherings and events that allow workers to talk and exchange ideas should be held regularly. “If companies want employees to come up with good ideas, then frequent communication between workers is critical. If workers don’t talk to each other, opportunities will be lost and entrepreneurial activity will be stymied. There should be no silos in companies that want to foster innovation.”
Prof. Bouchard says: “Entrepreneurship is vital for companies’ success – perhaps more so now than ever before. But as companies grow in size and complexity, they become more rigid and risk-averse. And yet, if managers take a few relatively simple steps, they can be entrepreneurial regardless of how big they are. L’Oreal, which is one of the case studies in the book, is the perfect example of a huge multi-national company that maintains a successful culture of corporate entrepreneurship.
“Materials company WL Gore, a one in a million company in my opinion, is another example of a large entity that applies these concepts. There is virtually no hierarchy and employees are actively encouraged to build their own small teams in order to develop ideas. As the book relates, the results are evident in the company’s success.”