Entrepreneurship - The Basis of Economic Wellbeing
THE CHALLENGE
Two critical challenges face companies across the globe that not only determine their capacity to survive, but the extent and pace at which wealth is created.
- Building the long-term competitive capacity of people to continually innovate and deliver value for customers at a pace that always secures 'ownership' and 'control' of market share.
- Communicating this inherent capacity to continually create future revenue, as the means to building investor confidence and therefore share price.
THE PROBLEM
Our 20th Century bureaucratic heritage is not only impeding the pace of innovative change in many companies, but is now also presenting a real threat to the survival of some. More so than at any other time, lack of Innovation and Customer Impact is forcing many companies 'against the ropes'. New rules are being invented in every business sector, often by unknown global competitors whose strategies can change the destinies of established industries.
Investor confidence and therefore share prices are being hampered by the general lack of entrepreneurship within organisations themselves which limits their ability firstly, to defend current revenues and secondly, to create new revenue streams fast enough to guarantee sustainable growth. One might argue that the share price is ultimately a reflection of the value that is added by an organisation. The real question, however, is to ask is whether an organisation is performing to its full potential, and if not, what is the cost of this to all stakeholders?
The problem is so widespread and chronic, that even in severe cases, it is often not recognised for what it is - a real threat to survival. This 'Bureaucratic Disconnection' as we choose to call it, manifests itself in three ways, each of which adds to the process of impeding growth and the potential value of the shares of a company:
- Employees are largely 'task focused' and not 'opportunity focused'. This means that they see themselves as working for a company for a living, rather than building a business for a future. This disconnection from a real business opportunity denies the company of its peoples' full potential and commitment, and is the first result of our bureaucratic heritage that is impeding sustainable growth in companies.
- Employees as a whole are largely safe from the financial consequences of their actions. This is clearly evident from the way the majority of people are remunerated and rewarded, even when they have the greatest level of contact and influence on customer spending. Because employees are largely seen as a 'hired resource' by the company and are not part of the business opportunity, they are not connected to the profit/loss consequences of their actions. This is the second result of our bureaucratic heritage that is impeding sustainable growth in companies.
- As a result of the first two points employees have no real understanding, interest or motivation in building the wealth inherent in a company's share price. This is a tragic waste of creative human potential that is costing all stakeholders dearly.
THE NEED
There is a direct and measurable golden thread between the Entrepreneurial Competitiveness of a company and its ability to deliver sustainable growth to shareholders. It is for this reason that this critical and strategic subject is of interest to companies who are serious about redefining the performance boundaries in their sectors and maximising the potential of their organisations.
By measuring the 'Entrepreneurial Drivers' in an organisation, executives acquire a better understanding of why they form the basis for sustainable growth in a 21st century company, and why they are so urgently needed.
Entrepreneurship as a life skill, and in its purest sense, can be defined as the resourcefulness of a person who achieves goals significantly beyond their current experience. This emphasises three specific characteristics for achieving success against difficult odds: The drive and resourcefulness to make things happen in spite of circumstances; the desire to achieve specific personal goals; and the need to grow beyond current experience.
One can therefore see how this natural human drive to create, achieve and grow, if unlocked and applied universally to organisations, would have a dramatic effect on performance at every level.
Competitiveness, on the other hand, is the display of intense human effort to maximise personal gain and minimise personal loss. It is the intense expression not only of the will to win, but the desire to avoid loss, driven by the life-changing personal consequences associated with the outcome.
Once again the application of this principle inside organisations lends new meaning to the word stakeholder and would connect and focus all people directly to the final outcome of revenue and profit.
THE BENEFITS
Companies who use this strategic and unique measurement and diagnosis process benefit in a number of different ways.
- By identifying precisely (by individual if necessary) where and why competitive deficits exist in an organisation and how they are inhibiting results.
- Setting benchmarks for every area in a business against which to measure progress.
- By receiving a detailed corrective development plan linked directly to your vision and strategy.
Article submitted by James Raath
