Scaling.NYC 5.0 — Recap & Takeaways from ‘Harnessing Entrepreneurship Within Your Company’
The ScalingNYC community is never short on inspiration and enthusiasm. With that said, I found myself especially energized after this last panel, as many of us identify as entrepreneurs and Scaling.NYC itself is the result of an entrepreneurial itch and the good fortune of being provided the space to create.
In our endless pursuit to provide meaningful insight to the community, our challenge is to surface emerging topics and rally thought leaders to share their views and lessons learned. In the past, we’ve explored topics ranging from talent and establishing infrastructure to organizational value exchange and employee experience design.
Most recently, we observed a mounting emphasis on entrepreneurship among our network. This movement is based on the belief that innovation is the key to sustained competitive advantage, and entrepreneurs, in any capacity, are the primary source of innovative contributions. Furthermore, most agree that entrepreneurship has become a foundational value in society today. Indeed, the majority of magazine covers are now graced with the faces of Founders and CEOs, as opposed to rock stars and athletes. If everyone played in a band in the 90s, the majority are now working on a startup or nurturing a side hustle.
With all of these dynamics in mind, we asked:
How can organizations contain this entrepreneurial spirit to engage employees, and ultimately, capture the value creation?
In answering this question, we were joined by Patrick McGinnis, Author of 10% Entrepreneur, Joy Sybesma, SVP of People Ops at Kargo, Priyanka Gupta, Sr. Director of HR at MediaMath, and Matt Hooper, VP of Open Innovation at Barclays, where we explored:
- The Role of Innovation and Entrepreneurship in Today’s Economy
- A Framework for Thinking about Entrepreneurship
- The Growing Tendency for Employees to Pursue Entrepreneurial Side Projects
- Methods for Nurturing Entrepreneurship — at Established Corporates and Growth Stage Companies
- Actionable Frameworks and Tactics for Deploying these Programs at your Company
Innovation and Entrepreneurship in our Current Economy
If we pause and think about the state of the economy today, and the companies creating a lot of value (e.g. Google, Apple, and so on), a commitment to innovation is the dominant theme. Disrupting categories, or developing new markets and product lines, seems to be the only way to stay ahead. With that, entrepreneurial energy is known to be the core source of innovation. It follows then that entrepreneurial contributions are highly valued. To emphasize this point, Patrick shared some interesting statistics:
More than 50% of the companies that were on the Fortune 500 in the year 2000 are no longer there…The average tenure in the S&P 500 twenty five or thirty years ago was twenty five years. Now it’s eighteen. It’s shrinking, and quickly.” — Patrick McGinnis
It’s quite obvious that staying on top is more difficult than ever before. If an organization does not fully exploit new and entrepreneurial ways of thinking and operating, they surely will not be able to maintain a dominant position.
So what does entrepreneurship even mean and what are the characteristics of entrepreneurs?
A Framework for Discussing Entrepreneurship
In my initial research, I came across a quote from HBR, which we used as the basis for our discussion — ‘If innovation is the ability to recognize opportunity, then the essence of being an entrepreneur is being able to mobilize talent and resources quickly to seize the opportunity and turn it into a business’. Characteristically, academia agrees that entrepreneurs can be identified as having an ability to thrive in uncertainty, with an appetite for risk and comfort with ambiguity. Furthermore, they demonstrate a desire to author their own projects, and they are persuasive. After all, you can’t get very far, if you can’t sell your ideas.
Using this working definition of the term and typical characteristics, our panelists chimed in with their perspective. In sum, they added that:
Most entrepreneurs have an intense dissatisfaction with the status quo and are willing to sacrifice to create change. They also have a knack for observing emerging trends (pattern recognition), with an ability to act on the opportunities they identify.
After reaching common ground, we pivoted the conversation to explore other trends impacting this dynamic in the business environment.
Growing Tendency for Employees to Pursue Entrepreneurial Side-projects
Patrick’s book, The 10% Entrepreneur, is based on the idea that we should all spend 10% of our time, and if possible, our capital, getting involved with new businesses on the side of our day jobs (e.g. investing, advising, founding, etc.). The idea is based on the notion that traditional careers are far less stable, so we need to diversify to insulate ourselves from risk. Additionally, the cost of starting a business has rapidly declined — establishing an LLC, and scraping together a website or the minimal viable product (MVP) for an app can be achieved for less than a few thousand dollars, at most.
However, if most of these pursuits take place outside of the workplace, then why should employers encourage this behavior? That statement is a very logical objection, though Patrick has observed something counter intuitive and encouraging for today’s business leaders. He’s seen that no one really intends to ever leave their day job, and these projects bring a very real benefit back to the workplace. To illustrate this view, Patrick told us the story of a corporate attorney who quit his job to pursue a startup full time. The business unfortunately failed so he returned to the corporate realm, swearing off the startup game. Later on, he was presented with an opportunity to advise another startup in exchange for equity. He went on to become a meaningful founder in a highly valued business venture.
What’s so important is not only has he diversified himself and learned something and created tons of value, he’s just a better lawyer because he understands how business people think. — Patrick McGinnis
From this example, it’s clear that these experiences lead to profound learning and new competencies. It’s far-fetched to assume this growth doesn’t benefit the full-time employer, and thus, this activity should be encouraged, under agreeable guidelines and with appropriate boundaries.
At this point, we explored how corporate employers have historically nurtured their entrepreneurs.
Examples from Established Corporates
Established corporates have long pursued initiatives aimed at catalyzing their entrepreneurs — ‘intraprenership,’ as it’s known. 3M is considered a pioneer on this front with their Skunkworks division in the 60’s and 70’s, intended to operate special new projects, which the organization then commercialized after validation. More recently, Google’s 20% time has been a focal point for discussion, where employees are encouraged to spend 20% of their time considering new initiatives for the company to pursue. A number of organizations host internal pitch contests, where employees present business plans to a panel of judges, similar to the Shark Tank format.
Outside of the organization, these types of pursuits are more traditional, aligned with corporate development, where organizations procure new products, capabilities, or talent via acquisition.
As we further discussed modern approaches, Matt brought us up to speed on his work at Barclays, where he served as the Founder of Rise — part co-working space, part accelerator, and home to the majority of Barclays’ intrapreneurship programs. His challenge has been to help Barlcays essentially disrupt itself by attracting fintech entrepreneurs and providing the resources and tools required to validate their concepts and bring them to market, ideally turning Barclays into their first customer. In the context of Barlcays’ broader culture, Matt was forced to deepen his understanding of the environments that propel entrepreneurs.
How do you get colleagues who are only stimulated and incentivized by bonus and by hierarchical structure to think differently, to build differently, to deliver genuine commercial value? — Matt Hooper
Over the course of this journey, Matt grew to appreciate the value of buy-in from stakeholders, and the importance of properly aligning incentives and organizational design. Establishing Rise led Matt to rethink many of the structures that allow large enterprises to thrive, as these same structures can often stifle founders, where speed and nimbleness are more critical than process efficiency or procedure.
With these issues raised, we started to consider how scaling companies could exploit these activities without the vast resources possessed by larger companies.
How Scale Ups are Instilling and Harnessing Entrepreneurship
Joy kicked us off with an explanation of Kargo’s Lifelong Learner program, a learning and development effort aimed at the entrepreneurial employees among their organization. In sum, they are providing financial resources for employees to pursue learning opportunities outside of the company, with only one condition — these employees must ‘share-back’ their learning with the rest of the organization, in whatever format is most appropriate.
The value proposition for Kargo seemed straight forward, as providing the space for employees to improve their own intellectual capital would surely reap positive externalities for the organization, though there were unexpected insights uncovered as well.
It’s giving people autonomy to master something that’s important to them, to see what that tells us about our employees in terms of who is opting in and who’s seizing the opportunity, and who’s continuing to evolve themselves in this quest to be a lifelong learner. And then separately, how are we continuing to give purpose to everyone’s day to day and making them feel like they’re a part of something? — Joy Sybesma
As Joy explained, entrepreneurship is a key organizational value for Kargo. In observing the employees who opted into the Lifelong Learner program, they were able to easily identify the employees who were eager to grow, solve new problems, and take the fate of their career into their own hands — all attributes which we previously identified as entrepreneurial. Furthermore, the educational pursuits of the employees highlighted the topics, skills, etc. that were important to them, which helps with career pathing, developing new capabilities, and other critical challenges for management. In the simplest sense, Kargo chose to invest-in versus investing-out, and there is nothing but optimism regarding the impact of this innovative program.
At this point, Priyanka took the opportunity to share some of her experiences and observations at MediaMath, which in many ways were the main inspiration for this panel. She explained that MediaMath is a deeply entrepreneurial organization, with most of the leadership having founded their own businesses in past lives. It got really interesting when Priyanka told the story of the Kepler Group, in which MediaMath essentially incubated and spun off a business unintentionally. In short, the new company was the result of a retention discussion, where one of the top performers explained he was leaving to gain experience in another area before ultimately starting a company of his own. The story takes an unexpected turn when MediaMath decided to actually invest capital in the new concept and help the employee independently get things off the ground. After the Kepler spin-off, MediaMath has since added structure to facilitating these opportunities for employees, though the cultural sentiment has stayed constant — put forward your ideas for expanding the products and services our company provides and we will let you run at them, whether its within our walls or not.
So getting the right talent and clearing the path when they look at career mobility has been the biggest learning here. — Priyanka Gupta
On a separate, though similar page, MediaMath has also established MediaMath.org, which highlights a range of volunteering opportunities among the broader community after an employee suggested the idea. By the way, with the company’s blessing, this employee now spends 50% of his time managing the effort, enabling his colleagues’ personal fulfillment and greater sense of purpose by giving back.
Actionable Frameworks / Tactics for Deploying Entrepreneurial Programs at your Company
Our objective then was to bring everything together and provide actionable advice to the audience. Every panelist chimed in and I’ve summarized their thoughts below:
- Get buy-in for entrepreneurial programs from senior stakeholders early on
- Incorporate screening for entrepreneurial traits in your recruiting process via behavioral interview questions (e.g. when have you made something from nothing?)
- Emphasize entrepreneurship as a cultural value and provide incentives for your employees by rewarding the pursuits that create commercial value
- Set very clear parameters for what’s allowed, and the expectation that employees must always deliver first on their main roles and responsibilities
- Democratize access to these opportunities — from the CEO to the facilities staff — as you never know where the next game changing idea will come from
Hopefully, at this point, you are similarly energized and inspired. Entrepreneurship is indeed a focal point of business and culture in today’s society. We all have ideas. We all want to change the world. And this energy is deeply motivating, to the extent we will pursue these initiatives, whether it’s within the confines of the organizations we work for or not.
If innovation is propelled by entrepreneurial contributions, and innovating is the only way to stay ahead, it serves businesses to create space for these activities and clear the path for their entrepreneurs.
In an age where business moves at warp speed and technology is automating the vast majority of analytical or repeatable tasks, it stands to reason that creativity will someday be the only remaining meaningful human contribution. The act of creating — bringing new things into the world or finding ways to improve what’s there — may become society’s last frontier for adding value to the business world, or otherwise. The bottom line is this — we better start honing these skills, and there’s no better place than the companies we already work for.
Originally published at https://www.linkedin.com on May 4, 2017.