How—and why—to encourage employees to be entrepreneurial

The entrepreneurial spirit, even in an established organization, fosters innovation and, ultimately, spurs customers to embrace your products or services. Try these five approaches.

For startups and for large corporations, there are tangible benefits to empowering employees to act like entrepreneurs.

It’s essential for company leaders to cultivate a culture of learning, iteration and innovation.

Here are five ways to empower employees to act like entrepreneurs:

1. Innovate.

Startups challenge existing business structures with new ideas, technologies and operations. Established companies often focus on keeping up with production demands and activities; entrepreneurs evaluate the market to see what new product or service meets an unmet demand. For instance, Netflix and Redbox provided easy access to consumers’ favorite movies, with fewer late fees. By the time Blockbuster and Hollywood Video stepped back from their daily operations to see what happened, it was too late. Internal entrepreneurs (intrapreneurs) must have a safe place to run experiments, held accountable by learning metrics instead of just profit. Give your team authority to do what would benefit the customer, and fund them appropriately.

2. Put the customer front and center.

Instead of focusing on what your team can do well, focus on solutions for the customer’s problem. That doesn’t mean asking customers what they need; instead, examine the customer’s business model and the problem and opportunity. At Lean Startup, innovation teams offer prototypes that aren’t always pretty, but getting tough feedback from customers results in cultural change. Companies can no longer rely on traditional market research and focus groups if they want to find new solutions. Customers can offer lots of opinions, but you should focus instead on their behavior.

3. Invest resources the right way.

For teams to work with a startup mindset that allows for productive failure, leaders must help infuse entrepreneurship into the culture. GE has had success with Growth Boards, groups that accept or reject projects. By putting product teams through a different funding cycle, it motivated the entire staff to get excited about a new way of working.

4. Seek leaders who test and learn.

To create a culture of learning and iteration, identify leaders who are open to this new way of working. Ask, “Do you have the humility not to know the answer?” Instead of seeking leaders who have deep domain experience and are accustomed to managing large teams, look for those who can manage horizontally. It’s better to have a small team with a higher ability to influence and the courage to say, “I don’t know, but let’s go figure it out.”

5. Change with the times.

With startups nipping at the heels of large corporations, GE has decided that, instead of fighting change, it should change, too. By training executives, creating a new governance structure, making leadership part of the conversation and rewriting company beliefs, it has created a physical workbook and established an intense culture training process that clearly laid out the values involved in this new way of working. The result? It has changed people’s mindsets and behaviors.

Heather McGough is co-founder of Lean Startup Company, which helps companies infuse the startup mindset and modern management techniques into their businesses. Follow her on Twitter @UrbanitySF. BusinessCollective, where a version of this article originally appeared, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.

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