THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):PROBLEMS AND SUCCESSFUL EFFORTS

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THE INDIVIDUAL ENTREPRENEUR:ENTREPRENEURIAL BACKGROUND AND CHARACTERISTICS >>

Entrepreneurship MGT602

Lesson 7

THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued...)

LEARNING OBJECTIVES

To explain the aspects of the entrepreneurial process.

To explain the differences between entrepreneurial and managerial domains.

To explain the organizational environment conducive for entrepreneurship.

To identify the general characteristics of an Entrepreneur.

To explain the process of establishing entrepreneurship in an organization.

ENTREPRENEURIAL LEADERSHIP CHARACTERISTICS

There are certain individual characteristics needed for a person to be successful Entrepreneurs, including:

1. Understanding the environment

2. Being visionary and flexible

3. Creating management options

4. Encourage teamwork while employing a multi-disciplined approach

5. Encouraging open discussion

6. Building a coalition of supporters, and persisting

An Entrepreneur needs to understand all aspects of the environment. Part of this ability is reflected in

individual's level of creativity. Creativity tends to decrease with age and education. The individual must be

creative and have a broad understanding of the internal and external environments of the corporation

The Entrepreneurial person must be a visionary leader-a person who dreams great dreams. Leadership is

the ability to dream great things and communicate them in a way that people say yes to being a part of the

dream. To establish a successful new venture, the Entrepreneurial leader must have a dream and overcome

all obstacles to achieve it.

The third necessary characteristic is that the Entrepreneur must be flexible and create management options.

An Entrepreneur is open to and encourages change. By challenging the beliefs and assumptions of the

corporation, an Entrepreneur can create something new in the organization structure. He or she must

possess the ability to encourage teamwork and use a multi-disciplined approach.

Every new company formation requires a broad range of business skills. The Entrepreneur must be a good

diplomat to minimize disruption. Open discussion must be encouraged to develop a good team for creating

something new. Many corporate managers have forgotten that frank, open discussion is part of the learning

process. A successful venture can be formed only when the team feels the freedom to disagree and to

critique an idea. The degree of openness among the team depends on the degree of openness of the

Entrepreneur. Openness leads to a strong coalition of supporters and encouragers.

The Entrepreneur must encourage each team member, particularly during hard times. A good Entrepreneur

makes everyone a hero. Only through persistence will a new venture be created and successful

commercialization result.

ESTABLISHING ENTREPRENEURSHIP IN THE ORGANIZATION

To establish an Entrepreneurial environment, the organization must implement a procedure. This can be

done internally, but it is easier to use an outsider to facilitate the process. This is particularly true when the

environment is very traditional. There are some steps involved in it.

Step 1: The first step is to secure a commitment to entrepreneurship in the organization by top, upper, and

middle management. Without top management commitment, the organization will never be able to

make the necessary changes. Once top management has committed to entrepreneurship for a sufficient

length of time, the concept is introduced throughout the organization. This is effectively accomplished

through seminars. General guidelines need to be established for Entrepreneurial venture development.

Next, Entrepreneurial leaders need to be identified, selected, and trained.

Entrepreneurship MGT602

Step 2: Ideas and general interest areas should be identified, along with the amount of risk money that is

available. The overall expectations and target results should be established, specifying time frame,

profitability requirements, and impact of the organization. A mentor/sponsor system needs to be

established.

Step 3: A company needs to use technology to make itself faster and more flexible. Technology has

allowed small companies to act like they are big ones. Large companies can use technology to make them

responsive and flexible.

Step 4: The organization can use a group of managers to train and share their experiences with other

members. These sessions should be conducted one day per month for a specified period of time.

Information about entrepreneurship and about the company's specific activities should be well publicized.

Step 5: The organization needs to develop ways to get closer to its customers by tapping the data base,

hiring from smaller rivals, and helping the retailer.

Step 6: An organization must learn to be more productive with fewer resources. With middle management

cutbacks, more control has been given to lower levels of the organization. The span of control should be

increased.

Step 7: The organization needs to establish a strong support structure. Because they do not immediately

affect the bottom line, Entrepreneurial activities can be overlooked and receive little funding. These

ventures require flexible, innovative behavior, with the Entrepreneurs having total authority over ex-

penditures and access to funds.

Step 8: The support must involve tying the rewards to the performance of the Entrepreneurial unit. This

encourages team members to work harder and compete more effectively. The equity portion of the

compensation is particularly difficult to handle.

Step 9: The organization needs to implement an evaluation system that allows successful units to expand

and unsuccessful ones to be eliminated.

PROBLEMS AND SUCCESSFUL EFFORTS

Entrepreneurship, also called corporate venturing, is not without problems. One study found that new

ventures started within a corporation performed worse than those started independently. Independent

start-ups tend to outperform corporate start-ups.

There are many examples of companies that have successfully implemented entrepreneurship. 3M allows

employees to devote 15 percent of their time to independent projects. After failing to recognize the

potential of Wozniak's personal computer, Hewlett-Packard has taken steps to take advantage of future

opportunities. Even IBM has developed the independent business unit concept.

The problems of entrepreneurship are not insurmountable, and the concept can lead to new products,

growth and the development of an entirely new corporate environment and culture.

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