Large businesses will often talk about the need to be more like start-ups.
The problem is that the core rules of being agile - moving fast to snap up new opportunities, being comfortable with making mistakes and allowing things to fail - can be at odds with the bureaucratic and risk-averse culture that’s so often found in large, listed firms.
It is possible for big corporations to be entrepreneurial, says Octopus Group co-founder and CEO Simon Rogerson, but it’s a challenge. It requires keeping more nimble parts of the organisation at arm's length and creating a company culture that is comfortable with feedback.
It’s an approach that has seen Octopus grow from an investment start-up in the year 2000 to a group with 1,400 plus employees, spanning real estate, energy and financial services.
Speaking at Management Today’s Leadership Lessons Live conference in June, Rogerson explained that there are several other things firms can do to create an entrepreneurial culture.
Role model failure
“The only way to get people to take risks and think differently is if you celebrate failures and the lessons you learn from them. Where many organisations go wrong is they discourage making mistakes.
“There's a great expression: perfect is the enemy of good. In many industries you’ll tend to hire people who are fairly typical. They’ve done really well in their exams at school and excellent at university; they’ve never really failed at anything. That creates the wrong mindset. If you have a mindset driven by an education system where everything is encouraged to be perfect you won’t move anywhere near quick enough.
“One of the great signs of leadership is vulnerability, it’s being open with your colleagues and organisation both personally and in terms of corporate vulnerability: what you got wrong, why did it happen and why it’s not going to happen again.
“It’s about role modelling, it has to come from the top. I have role modelled failure well over the years. Some things have worked, some things have gone absolutely terribly but I’m okay with that because I know that I’ve pushed things pretty hard.”
“Ownership has probably had the biggest impact on Octopus. We were completely founder-owned when we set up 20 years ago; now our employees own 20 per cent. It changes mindset and changes behaviour. Owners feel more accountable and they start to think long-term.
“So much entrepreneurial talent gets lost in a big organisation because people either think they need to have an idea (they don’t - it’s all about execution), or they don’t want to take the risk. You can encourage entrepreneurialism quite literally by making people entrepreneurs.
“The best programme we have introduced at Octopus in order to encourage people to act like entrepreneurs is called Octopus Springboard. It’s designed to encourage employees who are thinking about leaving to start their own thing to do exactly that. They pitch an idea to us and we back their idea for a small equity stake. That’s the ultimate safety net, so that if - in six months, nine months, a year - their business hasn’t worked out, their role is safe for them back at Octopus.
“I do that safe in the knowledge that these people will be so much more valuable having tried and failed then having never tried at all. It doesn’t just have benefits for the small amount of people who go through it, it changes the attitude of other employees towards risk taking. It gives them permission to think they can do it.”
Flatten decision making
“The first rule of thumb is the bigger the decision, the smaller the group that should be working on it.
“When we’re deciding to do new things strategically, we tend to have a group of no more than three or four people involved in the decision. That doesn’t mean ideas don’t come in from the wider organisation, but the ultimate yes or no is decided by the small group.
“Keep it small, keep it tight and encourage a culture of really candid feedback, so that when you do make mistakes and get things wrong you hear about it really quickly. That is empowering people within the organisation because it gives them a voice.”
Image credit: Octopus Group