ESTABLISHING ENTREPRENEURSHIP IN THE ORGANIZATION

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

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 expenditures 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.