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Are Management and Entrepreneurship at Odds?

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Sometimes there is a tendency to think that managers are slow and controlled, and entrepreneurs are exciting and progressive. The manager thus hinders the entrepreneur and makes everything boring.

And this can happen. But that is bad management. And in the same way that bad management makes things too controlled, bad entrepreneurship makes things unsustainable. We need both good management and good entrepreneurship. And entrepreneurship is a key component of the managerial task.

Here’s how Peter Drucker puts it:

One important advance in the discipline and practice of management is that both now embrace entrepreneurship and innovation. A sham fight these days pits “management” against “entrepreneurship” as adversaries, if not as mutually exclusive.

That’s like saying that the fingering hand and the bow hand of the violinist are “adversaries” or “mutually exclusive.” Both are always needed and at the same time.

Any existing organization, whether a business, a church, a labor union, or a hospital, goes down fast if it does not innovate. Conversely, any new organization, whether a business, a church, a labor union, or a hospital, collapses if it does not manage.

Not to innovate is the single largest reason for the decline of existing organizations. Not to know how to manage is the single largest reason for the failure of new ventures. (The Essential Drucker, p 8.)

The Unusual Origins of 15 Innovative Companies

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A good article over at BNet. They note:

Entrepreneurs worry too much about what they’re going to develop, make, or market. What’s more important is that they make, develop or market something. The odds that they end up making it big doing something different are apparently pretty high.Here are 15 companies that became famous, not for what they started doing, but for something that came later. Sure, they may be related, but the point is still valid: better to get started on something; innovative people find a way.

This jibes with Jim Collins’ research in Built to Last: Successful Habits of Visionary Companies. They argue against “the myth of the single great idea.” In other words, great companies are often not the result of an initial great idea that propels them to success. What makes them great is that the product becomes the vehicle for the company, not the other way around.

Making a Difference

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The question is not simply, “What must I do to make a difference?” but also “What must I learn to make a difference?”

The Type of Culture that Encourages Entrepreneurial Activities

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Tom Peters gives a good example from 3M of what a culture that encourages entrepreneurial activity looks like:

A good staring point as any is [3M’s] value system, in particular its “eleventh commandment.” It is: “Thou shalt not kill a new product idea.”

The company may slow it down. Or it may not commit a venture team. But it doesn’t shoot its pioneers.

As one 3M observer notes, the eleventh commandment is at odds with most activities in large corporations. Moreover, he adds, “If you want to stop a project aimed at developing a new product, the burden of proof is on the one who wants to stop the project, not the one who proposes the project. When you switch the burden from proving that the idea is good to the burden of proving that the idea is not good, you do an awful lot for changing the environment within the company with respect to the sponsorship of entrepreneurial people (In Search of Excellence, pp 227-228).