Building An Entrepreneurial Organization
William S. Hubbartt is president of Hubbartt and Associates, and author of The New Battle Over Workplace Privacy. Bill is a valuable member of our Brain Trust and our go-to guy when we need a human resources expert. During one of our visits with Bill we talked about how to build an entrepreneurial organization.First I think it is important to talk about this word, entrepreneur. Recently, someone asked me why I didn't use the word entrepreneur instead of small business in my brand and the title of the show. I told them that I chose small business for a very specific reason: I want to serve small business owners, not just entrepreneurs. Before you start scratching your head, think about these two points:
You can be an entrepreneur and not be a small business owner. It's true. You can have an entrepreneurial approach to delivering merchandise in the company truck or cleaning the corporate offices. You can be an entrepreneurial senior vice president or senior receptionist. But as you fill any of these assignments, you are an employee, not a small business owner.
You can be a small business owner and not be an entrepreneur. I know this sounds counter-intuitive, but it's true. Ever meet someone who inherited a business from their parents (who were probably entrepreneurs), but simply operated the company as it was handed down? Not an entrepreneurial molecule in their body. No new risks, no new direction.
I certainly like and use the word entrepreneur, but, as you can see, I use it to describe a spirit or attitude, rather than ownership. I believe it is very important to make this distinction as we use this well-used word. Now that we've got that straight...
Bill and I agree that one of the keys to success for a small business owner is to surround yourself with employees who have an entrepreneurial spirit. But what does that creature look like? We think an entrepreneurial employee exhibits four primary characteristics:
Initiative. Takes action on his own.
Vision. Sees beyond the obvious problem or solution.
Courage. Willing to stand up for her convictions.
Leadership. Able to put these three together in a style that causes others to follow.
Bill says that in order to develop and maintain an entrepreneurial organization you must be prepared to support it with three key elements:
Management style. Innovative, visionary, courageous leaders will not work for very long for a weenie manager. If you want to successfully employ entrepreneurs, you must be one yourself.
Compensation. Bill says in order to acquire and keep entrepreneurial employees you must pay them competitively. He suggests that one way to accomplish this is to implement a pay-for-performance compensation plan. In another life, at Xerox, we called this a leveraged compensation plan (employees don't ask for raises, they create them), and take it from me, performance-based comp plans are very attractive to entrepreneurs.
Environment. Bill believes you must create an entrepreneurial atmosphere in your company. A place where the management soil is fertile for new ideas, and the boss isn't afraid to ask for, and consider those new ideas.
Write this on a rock... The marketplace is changing so fast it's frightening. An owner cannot provide all of the initiative, vision, courage, leadership, brainpower and creative energy to stay competitive. Surround yourself with entrepreneurs and allow them be so.
