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Archive for December 2012

Building a more entrepreneurial culture

The government’s vision is for many more people in the UK to have the opportunity, aspiration and motivation to use their talent and initiative to be enterprising and to have an increased proportion of people starting a business through education and training, with the practical support coming from the other policy initiatives.

Those  planning a new business to be more realistic and conscious about the venture they plan, their own (path-dependent) dispositions for action, the need to take external advice and to continue to remain open to learning from others and from the employees they may take on.

Selection is still a powerful and dominant force and so entrepreneurs and entrepreneurial management teams, as well as early-stage businesses, need to be adaptable enough to consider changing their business model or even their business segment. Some well-known examples make the point. A young Chicago entrepreneur started a business manufacturing soap. When the soap was slow to sell, he switched to selling baking powder and, as a gimmick, included free chewing gum in every package. As the customers were more taken with the gum than with the baking soda, William Wrigley reoriented the company to produce chewing gum. A more modern example is that of PayPal. Founder Max Levchin originally saw PayPal as a cryptography company and, later, as a means of transmitting money via personal digital assistants (PDAs). Only after several years trial and error did PayPal find its niche as an online payment system. The transition was not without effort and the company frequently discussed whether or not to continue and/or change business models, but their flexibility in the end proved to be their major asset. One of the pilot study interviewees was very proud that he started out selling anti-bacterial hand gels directly to corporations. When an investment bank said it did not want the gel as such but wanted it included in a personal survival kit for every staff member, he sourced and won the contract for personal survival kits, now the basis of his flourishing business.


And don’t forget ‘intrapreneurship’ as well as entrepreneurship, where employees become inside entrepreneurs and transform innovative ideas into better processes or profitable product lines or services, while operating within the firm. Well-known examples are Post-It notes from 3m, the Sony Playstation, and the Java programming language from Sun Microsystems. Google is well known for allowing its employees to use up to 20 per cent of their work week to pursue special projects unrelated to their normal workload. Google claims that many of the products in Google Labs started out as pet projects in the 20% time programme. While it is undoubtedly more difficult for SMEs to find the time and the resources to permit such intrapreneurship, it’s much easier to cautiously develop embodied knowledge in a firm as opposed to trying to implement wholesale change imposed by an entrepreneurial leader.