Organisations in the Entrepreneurial Age

From the Etsy store owners, Upworkers, and Uber drivers of the gig economy to the thousands of start-ups taking their place on the starting blocks in the great race to start-up success every year, there’s no doubt that technology has enabled a new era beyond the Information Age. It can take many forms, but entrepreneurialism – defined as the ability to use information to spot opportunities, create solutions and decisively act on them – is the new power structure in the uncertainty of the 21st century. Those who succeed will be those who are informed, connected and swift enough to respond to the unknown.

This new world of The Entrepreneurial Society was the theme of this year’s Drucker Forum, which I attended last week as a Drucker Challenge Finalist. The two-day conference covered such a broad range of subjects that I couldn’t possibly cover them all in one blog post. Instead, I have created a video of some of my key takeaways as a summary of the event. Please see below to take a look and let us know what you think!

 

 

As you can see from the video, many aspects of the Entrepreneurial Society were covered, such as the role of the state in enabling and supporting people in the often precarious position of unstable income flows and unrepresented workforces. However, whilst these other topics were important to consider, it was the role of organisations in the entrepreneurial age that really got me interested.

At the event, there was general agreement amongst the audience and speakers that organisations need to become more entrepreneurial if they are to play a useful role in the entrepreneurial society, but there was widespread scepticism about whether this is possible. In researching my essay for the Drucker Challenge, I read Innovation and Entrepreneurship, in which Drucker advocated for organisations tackling this through separation of entrepreneurial and managerial units. This is a technique we see a lot of today, either through the formation of new innovation units or through acquiring start-ups as new ’tissue’ and incubating them (although Drucker advises against an M&A route to growing new capabilities).

This is one approach, but it does not deal with the challenges that emerge when it is time to introduce these units back into the main organisation. Neither does separation enable the rest of the incumbent organisation to unlock their entrepreneurial capabilities for the betterment of the wider organisations, leaving them stuck in the bureaucratic structures of the industrial age. Gary Hamel, speaking at the event likened this to “infantilising employees, creating an artificial separation between thinkers and doers.” 

At Post*Shift, I have had the privilege to work with organisations on developing exactly these capabilities and I’m afraid I have to differ with Drucker on his view that entrepreneurialism for organisations must be kept segregated from other operations. Instead, I have seen large bureaucratic institutions develop agile, responsive structures through following some or all of these approaches:

• Start small & pilot. Create small pilots within existing teams in the organisation. Rather than cleaving the responsibility for innovation into separate business units, instead it is possible to take a distributed change approach, piloting new innovative practices and processes in small teams first and then extending their influence and new ways of working across the company incrementally
• Default to open. Consider the need for entrepreneurs to share knowledge and collaborate with a diverse range of thoughts and ideas in order to better develop their own ideas. Review the collaboration tool landscape of your organisation and consider whether it is truly enabling open, discoverable communication or instead replicating existing siloed conversations & behaviours, just online.
• Connect to form new structures. Organisations need to rethink their Taylorist hierarchical structures borne out of the need to control manufacturing processes, and instead reform to facilitate more fluid structures within the firm that allow better cross-collaboration and for teams to form around market opportunities and customer needs as they arise. This is where a platform model can be experimented with, through incremental change, a few teams or units at a time.
• Unlock data & information. Start sharing more data and insights across the whole organisation – not just within teams – to start to develop your organisation as a human sensor network that can sense and respond to opportunities and threats as they arise and not only once they’ve made it up the hierarchy to reach the CEO.

Ultimately, I believe there is an important role for large organisations to play in the new entrepreneurial age, but I don’t believe that role will be a shoe-in. Organisations will have to adapt in order to compete effectively in a world where scale does not necessarily trump customer need. I also believe that there is a huge amount of human potential laying dormant and hamstrung in bureaucracies across the world. What organisation can really afford to have employees operating at this sub-optimal level? Large established organisations have an imperative to develop entrepreneurial capabilities to be able to operate effectively in a 21st century world where everyone is more connected and networked and knowledge is shared.