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Encouraging an entrepreneurial mind-set can risk stifling natural innovation

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Rarely does a week pass when organisational leaders are not encouraged to ‘be more entrepreneurial’. It is quite the talking point. But is it right?


Press reporting of enterprise, often focusing on start-ups, has also caught the attention of many business schools. The term entrepreneurship is certainly not new, with the desire to develop an “entrepreneurial mind-set” continuing to be a hot topic for around a decade now. Schumpeter back in 1947 defined it as:

“the doing of new things or the doing of things that are already being done in a new way (innovation)”


The notion that entrepreneurial behaviour should be encouraged in larger organisations has become a key weapon in the search for competitive advantage. At the organisational level there are often several barriers to creativity. Paradoxically this is not necessarily due to the organisational culture or absence of support for initiatives designed to encourage innovation, but sometimes as a result of the care being taken to foster innovation. Organisations that support entrepreneurial behaviour can risk inadvertently impeding creativity.  

Koryak et al (2015) highlight that entrepreneurial leaders are required to perform two fundamental tasks:

Task 1: Identify opportunities for the organisation

Task 2: Configure resources to exploit these opportunities

Are you multi-skilled?

Often leaders may excel at one task but not both. We also often talk about an ‘entrepreneurial orientation’ which focuses on being innovative at the organisational level when we really are referring to individual intrapreneurs, employees who promote innovative product development and marketing, and who are the source of inspiration. 

Many organisations now explicitly seek to foster cultures that encourage widespread entrepreneurial behaviour. Often this involves openly encouraging new ideas, providing pleasant and flexible working environments, rewarding enterprise, valuing trials, ensuring open communication and giving the freedom to take risk. Ironically for individuals who are natural intrapreneurs these initiatives may actually stifle their creativity. 

A study amongst managers in Brazil showed that when an organisation does not favour corporate innovation, natural intrapreneurs strong in determination, perseverance, creativity and boldness emerge (Hashimoto and Nassif, 2014). Conversely, the study showed that when these ‘naturally innovative’ individuals work within organisations that actively encourage entrepreneurial behaviour, their drive and energy to be creative can diminish. 

Two points must be addressed. Firstly, if an organisation is seeking an ‘entrepreneurial mind-set’ they must clarify whether they are taking an overall organisational approach, or are seeking to recruit specific individuals to act as intrapreneurs. The second point is that when seeking to motivate ‘natural intrapreneurs’, considering the role and behaviour of the leader is essential. Sometimes, counterintuitively, widely regarded ‘positive’ leadership traits need to be re-considered in order to maintain the energy of natural intrapreneurs.  

Companies should avoid simply assuming that implementing ‘positive’ practices will automatically work for all. It can be like giving a natural comedian endless time to create a perfect joke. For some naturally gifted comics it’s ‘off the cuff remarks’ made during times of tension that generate the most laughter. Given time to perform they become over-rehearsed bores worrying about what would or wouldn’t meet approval. 

References

Hashimoto, M. and Nassif, V. (2014) ‘Inhibition and encouragement of entrepreneurial behavior: antecedents analysis from managers’ perspectives’. Brazilian Administration Review. Vol. 11, No. 4, , Oct./Dec. 2014, pp. 385-406.

Koryak, O. et al (2015) ‘Entrepreneurial leadership capabilities and firm growth’. International Small Business Journal, Vol.33, No.1,

Schumpeter, J (1947) ‘The Creative Response in Economic History’. The Journal of Economic History, Vol. 7, No. 2 (Nov., 1947), pp. 149-159.

Dr Kellie  Vincent

By Dr Kellie Vincent

Dr Kellie is MBA Director at Westminster Business School.

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