4 Unavoidable Steps To Building An Entrepreneurial Organization

Do more than hire historically innovative people and hope that they’ll bring their entrepreneurial chops to your company.

4 Unavoidable Steps To Building An Entrepreneurial Organization
[Photo: Flickr user Raúl Hernández González]

Entrepreneurship is a driving force of progress.


At the individual level, it translates original ideas into practical innovations and unleashes the creative power of human capital. At the organizational level, it is the main engine of business growth and survival: entrepreneurial companies grow; the others eventually die. And at the society level, entrepreneurship bridges the gap between demand and supply, creating new employment opportunities and solving real-world problems, including those which had not yet been identified.

Although most people associate entrepreneurship with an occupational category, launching a business is neither necessary nor sufficient for entrepreneurship.

Indeed, people differ in their entrepreneurial orientation and abilities, regardless of whether they run their own business, are self-employed, or are employed by someone else. In fact, even big corporations make entrepreneurship a strategic priority now: they want to remain as agile, hungry and ambitious as fresh start-ups, so they put innovation at the heart of their agenda.

But how does one build an entrepreneurial organization? Clearly, this cannot happen overnight, and one recipe may not work for all businesses and circumstances. However, there are four generic steps that are more or less indispensable and unavoidable:

1. Hire Entrepreneurial People

These are people who have an entrepreneurial “DNA.” They are naturally more inquisitive and critical of the status quo, which is why they may often have a history of problems with authority or even be misfits. They are also good at generating tons of ideas, so much so that they may often seem eccentric and a bit odd.

Creative people suffer from an inability to suppress irrelevant thought processes and ideas, something called latent inhibition, but that “inability” provides the very raw ingredients of creativity.


Importantly, you can be entrepreneurial without being creative at all: individuals who are highly proactive–they default to yes and have a strong action-orientation–and opportunistic–they are sensitive to market trends and tend to interpret situations as opportunities–are as capable of driving innovation as creative individuals are, if not more.

2. Learn How To Manage Them

Entrepreneurial people want to work on meaningful projects; they want challenging goals that can lead to big accomplishments. Although this may be true for everyone, the big difference is that the opposite scenario is a total no-go for entrepreneurial individuals: routine, well-defined tasks, tactical projects, and any assignment that can be completed on autopilot are all likely to disengage and even alienate entrepreneurial employees.

One of the paradoxes of managing entrepreneurial people is that they are more naturally predisposed to engaging with work–they get excited about new projects and are able to find meaning in work–yet they also have lower levels of tolerance for working on irrelevant tasks, so when they are not intrinsically motivated, their strengths may turn into weaknesses.

In line, managers must learn to tolerate the dark side of entrepreneurial people: at times they may be moody, demanding, and erratic, but managers have a clear incentive to make them shine.

3. Build Entrepreneurial Teams

We tend to think of innovation as the product of heroic individual efforts. In reality, every innovation is the result of coordinated teamwork, which can be achieved by building entrepreneurial teams. The secret to creating a true synergy between individual team members, where they can function like different organs of the same organism, is to look for congruent beliefs and values but complementary skills and styles.

A team full of creative people would never get anything done. One full of proactive people would never pause to reflect and have no clear sense of direction. In contrast, when each individual contributes a different set of skills to the talent mix, it is easy to assign roles and promote collaboration while minimizing competition within the team. But all team members must be fully aligned in terms of their goal or mission, which is why leadership is key. Furthermore, when team members differ in their values or core beliefs, it will be difficult to motivate everyone with the same vision.


4. Create An Entrepreneurial Culture

This is the final but most crucial element of the formula. But what do we mean by entrepreneurial culture? Quite simply, an entrepreneurial culture is one that empowers every employee to act in an entrepreneurial way, even if they are not naturally inclined to do so.

In other words: An environment or echo-system where individuals feel incentivized to take risks, make their own decisions, and experiment, even if it means failing. A culture where informal, spontaneous, and non-bureaucratic decisions characterize the typical patterns of problem-solving and interaction between employees and teams. A culture that promotes exploration, learning, and play.

In order to create this culture, leaders must trust employees as much as they trust leaders, if not more, and employees must be treated as grown-ups. They should be given as much support and autonomy as needed and own the vision as if they owned the business.

Dr. Tomas Chamorro-Premuzic is an international authority in psychological profiling, consumer analytics, and talent management. He is a Professor of Business Psychology at University College London (UCL), Vice President of Research and Innovation at Hogan Assessments, and has previously taught at New York University and the London School of Economics.