The Link Between Entrepreneurship and Innovation

Every so often, an entrepreneur emerges who really changes the game.

Can you remember a time (before Howard Schultz) when someone told you that we would pay $2 for a cup of coffee?   You would have thought them unstable.  Today, you would have trouble leaving Starbucks for just $2.

When McDonalds, came on the scene, I can remember the first time my family visited one.  My dad was pretty skeptical.  “Fast food?” he asked? “Why would anyone want fast food? . . . I’d prefer that mine was good food.”   That’s how I suspect many people viewed restaurants before Ray Kroc.

Could you imagine the banker who Herb Kelleher approached to borrow money to buy his first airliner after being told Kelleher’s business model was to offer prices that competed with bus fares rather than plane fares? Yet his simple business model revolutionized commercial air travel and arguably drove some of aviation’s proudest names into bankruptcy.

Or how about Woz and Jobs who struck out in their garage to take on mighty IBM, HP, Tandy and even Microsoft in the PC market? Today Apple’s market cap is at stratospheric levels (over $550 Billion) – a testament to their vision.

Yes, some people have what it takes to see things that most other mere mortals miss.  Not only can they see it, but they have a belief that their visions will be realized when most of the rest of us say it just couldn’t happen.

What I find interesting about this is how so often the people who introduce a new order of things are outsiders who inflict amazing damage on the slower moving companies who dominated their industries at the time. Why do you suppose Blockbuster could not see the opportunity to stream video content – or even deliver it by mail?  Why do you suppose it took Borders and Barnes and Noble so long to see the need to offer online ordering, and even electronic delivery of written content?

So why aren’t there more “intrapreneurs” within our organizations who can drive innovation thinking fast and dramatically enough to thrive in the face of shifting technology, consumer, economic, and social trends?    What makes these great entrepreneurs so successful, and aren’t they the same things we need to cultivate within our own organizations?

There have been many attempts to classify the vital traits of great entrepreneurs.  As an entrepreneur myself, and as someone who met many successful other entrepreneurs through Young Presidents Organization (YPO) I have been reflecting about some of the common traits I observed among great entrepreneurs.  So, for what it’s worth, here is my list:

1)      Sense of Self-Confidence.  When I think about when I started my first business, I was arrogant and cocky.   I was armed with my MBA, and my belief in myself was so strong, no one could talk me out of what I wanted to do.  I would say my belief possibly bordered on naïve – but without this belief I would have never taken the risks required to pursue my dream.

2)      Incredible Optimism.  This goes hand-in-hand with the preceding.  A few years ago after I sold my business, I was assisting a friend (an amazing entrepreneur in his own right) with his business.  I had some operations and financial skills that he needed.    I regularly saw things that merited some caution that I thought were worth bringing to Ron’s attention.  One day he finally told me, “Never give me the numbers and tell me the risks.  It just brings me down, and without my positive mental attitude, I cannot be effective.”  Great entrepreneurs see the possibilities in everything and minimize (or even filter out) the threats that would cause a no-go decision.

3)      Boundless Energy.  All of the entrepreneurs I have known were married to their dreams, and virtually always were working on them.  It’s a 24/7 proposition.  If they went out there was always a business purpose (whether networking, entertaining clients, or learning something they could subsequently use).  Whether in or out of the office, they just can’t turn it off.   Most of my colleagues slept less than many people, getting up at 3 in the morning to read, work on a project, or simply do some online research.   This takes personal resilience along with both physical and emotional strength.

4)      Risk taking is EXCITING, not debilitating.  Trying to do something no one else has before in the face of uncertainty, is risky.   For some people this is a crippling thing.  Once you start making lists of pros and cons, you are already defeated.   Entrepreneurs believe that risks are proportional to the potential rewards.   Since they generally dream big, the idea of taking larger risks is invigorating.   That doesn’t mean they will do stupid things, but they aren’t afraid of the uncertainty.  The first time I signed a personal loan guarantee to a bank, I remember feeling remarkably calm about it.   Sure I could have lost my house, but the possible upsides of success outweighed the potential hazards.

5)      Have Something to Prove.   There are lots of people I have met who at one point or another were passed over for a promotion, or even fired from their employer.   Whether trying to prove something to yourself, to the world, to those kids who made fun of you in high school, or to that former boss who had you sacked . . .  this is a powerful driver.

6)      Love coloring outside the lines.  Another common trait among entrepreneurs I have known is that they LOVE to break rules (or they automatically assume the rules apply to others but not to them. Just ask me how many speeding tickets I have had . . . 3 in one day was my record!)   These people revel in the thought of playing in uncharted space, changing the game, and doing what others say is not possible or practical.

Now this is surely not an exhaustive list, but it these are some key traits that seem to make a difference.   I wonder whether if we had more of these traits in larger organizations, whether we would get more intrapreneurship?

It is true that most entrepreneurs I have known would never have considered working for a large company.  To them, such a life would seem too constraining, bureaucratic, and unfulfilling.   However, would we drive more innovation in our organizations if we sought to hire people with some of the character traits listed above?  In most organizations, we don’t screen for such things.  But . . . we could.

The final point I need to make is that the challenge of leaning innovation within a large organization is a unique one.   There is a wonderful quote attributed to Stephen King that goes : “Artistic talent is far more common than the talent to nurture artistic talent. Any parent with a hard hand can crush it, but to nurture it is much more difficult.

Nurturing talent maybe more difficult, but it is no less important than entrepreneurial talent.   That is the leadership challenge in large companies.

Other related Articles:

Are you an entrepreneur or a leader?, By Rich Russakoff and Mary Goodman

Want to start a business, but not sure what to pursue? Here’s how to discover what you love:

Five Creativity Exercises to Find Your Passion, by Lisa Girard


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Filed under Innovation, Strategy

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