Why Companies Lose Their Entrepreneurial Spirit
In the earlier chapters, we learned about the 9 Entrepreneurisms and understood better why entrepreneurial management makes perfect business sense. The puzzle then is; Why then do companies lose this strength there were created from?
In our research, we find that it happens over time, slowly but surely as the company grows in size. We call it the “Growth Effect” when too many support functions emerge, and checks and balances bring a bureaucracy that kills off the entrepreneurial spirit. When layers of management appear, they come with their own Key Performance Indicators (KPI) that are often in conflict with the overall objective of the organization – why it exists. Support departments begin to impose on operations, decisions become “political” and there is no longer an “honesty” in the organization! This was the case in Nokia, under the leadership of Olli-Pekka Kallasvuo, CEO from 2006 till he was ousted in 2010.
Honesty is something that start-ups have plenty of. They are small and everyone knows everything. What’s working, what’s not, what the cash position is, who is performing, who is not. Start-Ups that are successful are brutally honest. They have tenacity because of Passion and they keep going. It’s the honesty that allows them to be Realistic and Opportunistic, two of the other Entrepreneurisms, which combined with Execution gives them a winning edge.
If you run an organization, then you need to practice honesty. About the performance and role of your leaders, the quality of your product and service. Flaws and poor performance have to be dealt with early. Where is value in your team coming from? Who is responsible for generating revenue? This is critical. Getting to the answers in an open and honest way is the only way you are going to build a high-performing organization. Let me leave you with this quote;
“Google was always a start-up. It just became a very big one.”
– Dale Fox, Inventor, Entrepreneur & Founder-CEO of Tribogenics