What Can You Do To Stay Entrepreneurial As Your Company Grows?.
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Episode 21 Transcript:
Chris Curran: Growth Igniters Radio Episode 21: What Can You Do To Stay Entrepreneurial As Your Company Grows?
This episode is brought to you by Business Advancement Incorporated, enabling successful leaders and companies to accelerate to their next level of growth. On the web at www.businessadvance.com. Now, here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated. And with me is my business partner and husband, Scott Harper. Hi, Scott.
Scott Harper: Hi, Pam. It’s great to be here with you, as always. If you out there are listening to Growth Igniters Radio for the first time, the purpose of our series is to spark new insights, inspiration and immediately useful ideas for leaders to take themselves and their companies to their next level of success. So, Pam, what’s up for today?
Pam Harper: As you know, we’ve been talking with some successful CEOs lately who’ve been asking us questions on the issue of how do we keep the entrepreneurial energy and spirit of our company alive at a high level as we’re now in − I call it “adolescence” − and on the way to the next level of growth?
Scott Harper: Right.
Pam Harper: In fact, you know it’s funny − even large company leaders express the same interest. They want to be entrepreneurial, but “in a good way.”
Scott Harper: Okay; so in this episode we’re going to share our thoughts on this topic, which sometimes comes out as a question about growing pains. “We’re in growing pains; we want to grow but stay nimble and alive and have a lot of innovation.” Pam, what is your initial answer when someone asks the question, “How do we stay entrepreneurial and keep our growth going at the same time?”
Pam Harper: What do you mean by “entrepreneurial?”
Scott Harper: That’s a good response.
Pam Harper: One of the biggest challenges for accelerating transformation − and we talked about that in one of our previous episodes − comes from the need for clarity; it’s easy to mistakenly assume that we all mean the same thing when we’re communicating, and we don’t. “Entrepreneurial” is one of those words. In fact, I looked up the definition for entrepreneurial, just out of curiosity, and I came up with about four different variations of it. It depends on whether you mean risk, you mean definitely for money, or is it a spirit? There were all kinds of different definitions.
Scott Harper: … Structure of leadership….
Pam Harper: Structure of leadership… All entrepreneurial kinds of concerns. It’s not just a question of wordsmithing; it’s really a question of what do we really mean.
Scott Harper: And if we have apples and oranges of understanding in our company, especially as we’re growing and adding people and structure, you can get into a lot of trouble if you say, “We want to be entrepreneurial around here,” and I mean one thing, but you mean another.
Pam Harper: Yeah. You know, a story that comes to mind is when I was working with a company, and there were some challenges. They were growing, they were successful − as the companies we’re working with always are − and in this particular case there were some real difficulties between the CEO and the human resource department because each of them would say, “I don’t understand a thing they are saying.”
Scott Harper: “Those people…”
Pam Harper: …”Those people.” The HR people would say things like, “That CEO, he keeps talking about ‘fire in the belly, fire in the belly, fire in the belly.’ We don’t even understand what he means.” I went over and spoke with the CEO, and I was saying, “How do you think things are going?” We got into a lot of different issues. He said, “There’s one thing that’s really bothering me, and it’s those HR people.” I asked,”What do you mean about those HR people?” He said, “I can never understand a thing they are saying.”
Scott Harper: They don’t have fire in the belly…
Pam Harper: They don’t have fire in the belly − You know this story. I said, “Okay, I don’t know what you mean by ‘fire in the belly.’ Tell me what you mean by ‘fire in the belly.’” He said, “I have a definition. I wrote it down.” He goes over to a drawer and he pulls out a printout, and he has all kinds of definitions written for all kinds of things. Fire in the belly is one of those. He shows me, he goes, “Here; here’s the definition.” It doesn’t really matter what he meant for the purpose of this discussion, but the point is he’d actually written it down. Do you think anybody else knew what he meant?
Scott Harper: He hadn’t really shared this?
Pam Harper: Not at all.
Scott Harper: He wrote it down for himself, and wasn’t communicating what he meant.
Pam Harper: That’s right. He’d internalized it and it was …
Scott Harper: … A recipe for frustration.
Pam Harper: It was. Eventually we brought people together and they were able to start communicating, and it made a big difference. “Oh, that’s what you mean.”
Scott Harper: Yeah. I think the point you’re making is that if we’re talking about how we want to grow and put in structure and really support our growth so that we’re serving our customer base, and our market but we also want to stay entrepreneurial − it’s so important that everybody have an idea of what that is. What the outcomes are, the values and beliefs that are driving the entrepreneurialism. How that’s going to manifest? What are the behaviors? What the people expect to see as business outcomes, and how it plays out in how people interact, how people interact with the market, how people innovate and so on?
Pam Harper: Also, how things get done. Let’s not overlook that.
Scott Harper: How things get done. That’s right.
Pam Harper: It actually has a strategic meaning as well.
Scott Harper: Okay. It’s really important that we have that sense of commonality.
Pam Harper: That’s right, and it’s really the foundation − I mean, we have to be very clear when we’re talking about being entrepreneurial that everyone − especially at the board level, at the CEO level, at the C suite level − that all of the people who are accountable for strategy and finances are in sync with this.
Scott Harper: So that people don’t get the impression that growth is the enemy of entrepreneurialism. “You can either grow and become big and have structure or you can keep that that kick ‘em out spirit,” and so on.
Pam Harper: That’s exactly right. It serves as a foundation for how you shape the culture, really, going forward.
Scott Harper: All right. The example that comes to mind for me is the company that was going through growth and the CEO called us in and said, “The board is pressuring us to put more structure in and really have this financial outcomes and so on, but I really want to keep innovating and they are saying, ‘No, you’re spending too much on innovation. We have to grow and if you spend too much on innovation we’re not going to have the financials that we need.’” The CEO was saying, “If we don’t put our resources into continuing our innovation pipeline, we’ll go from being a leader in this area to just servicing what we already have, and I’m afraid we’re going to peter out and eventually we may grow, but we’re going to lose our specialness.” Is that what you’re talking about?
Pam Harper: Exactly. It goes back again to the idea of what it means to be entrepreneurial. It’s not just a cultural discussion of course. It’s also a strategic discussion.
Scott Harper: Very much strategic, yes.
Pam Harper: It’s a discussion that has to take place often.
Scott Harper: … At every level.
Pam Harper: Exactly. At every level, and it sets the foundation for what happens next, and especially as you shape the culture; in our next section we’re going to talk about that.
We’re going to take a quick break right now. When we come back we will discuss more about how to stay entrepreneurial as your company grows. Stay with us…
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper. Brought to you by Business Advancement Incorporated, on the web at www.businessadvance.com. We enable successful companies to accelerate to their next level of innovation and growth.
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Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. Today, Scott and I are talking about how companies can grow well into, and even pass mid market size while still having that strong entrepreneurial orientation.
Scott Harper: Okay − let’s talk about the challenges and practices of shaping an entrepreneurial culture and operation as a company grows.
Pam Harper: I have one thing I want to make sure that we clarify here.
Scott Harper: Okay.
Pam Harper: That’s that a culture exists from day one. It exists whether you consciously shape it or you don’t. I still remember talking with somebody who’s a CEO of about − at the time it was about a five million dollar company − and I said, “Tell me a little bit about your culture.” I expected to hear all kinds of things − and he said, “Actually I haven’t gotten around putting one in yet.”
Scott Harper: “We’re too much entrepreneurial here; we don’t have a culture yet.”
Pam Harper: That’s right. To that, I say, “You have a culture the moment that you go into business,” because to me, culture comes with being a person. It comes from all of your values and your beliefs and the way you go about doing things. So you can be a gang of one and have a culture. It’s really about whether you’re shaping the culture − and that’s really what he meant. I mean, I understood that, but it was just, “No, we don’t put in culture.” You do shape them though.
Scott Harper: Yes.
Pam Harper: The shaping is the thing that is the trickiest part, because as a company grows we’re also taken up with what it takes to grow, so that it’s hard to catch how much a company has changed over time. I mean, I see it with my own company. I saw it when you joined me.
Scott Harper: That’s right.
Pam Harper: Things changed for us when you came in. On a larger scale it happens because there are all kinds of things that happen. New customers come in.
Scott Harper: Right.
Pam Harper: New technology comes in.
Scott Harper: Systems and processes…
Pam Harper: Exactly.
Scott Harper: Above all, as you’re growing in your organization − whether you’re taking on employees or you’re doing more outsourcing − you’ve got additional points of view that are always coming in. And going back to that whole point of what do we mean about being entrepreneurial, and how do we keep what made us successful in the first place alive and well and kicking and yet do that evolution thing that we need to do to support our growth. That’s really important − keeping the eye on the ball.
Pam Harper: It’s really important to be able to take all of that in, and that requires taking a hard look at all the ways that what you’re doing currently actually reinforces that entrepreneurial spirit that you’ve defined, that we talked about in the first segment of this program. Just as an example, one of the companies, another company that I was working with − this is before you had joined me…
Scott Harper: Okay.
Pam Harper: … Was very successful also, and they had grown substantially because there was a new demand for their service. What ended up happening for them because it was most logical is they had grown into fiefdoms, and each of the fiefdoms had their own norms. And because these were very forward looking people, they realized that they couldn’t stay just looking at a fiefdoms, or a series of fiefdoms.
Scott Harper: Or silos.
Pam Harper: Silos; okay, they could not stay looking at silos − that they had to do something. People needed to work across functions as teams.
Scott Harper: Right.
Pam Harper: Yet they saw that by making some changes, they still weren’t quite getting where they needed to go. One of the things when I started working with them is they were just so mystified as to why this was happening. If they had made changes, why wasn’t it working out? And what we discovered together is that there were certain aspects that they were looking at, but that there were other aspects that they were not looking at − such as who are the heroes in their organization.
Scott Harper: Okay.
Pam Harper: The heroes in their organization in this case were not the people who were working in teams. They were the people who were working through those silos.
Scott Harper: Okay, the cowboys; the people who went out and got the business and got the job done …
Pam Harper: Yeah, they weren’t actually even working through the silos now, were they? They were doing that.
Scott Harper: I remember this one, yes.
Pam Harper: Right. One of the things that they had overlooked was how many ways do we reinforce the culture that we’re looking for, and looking to establish. In fact, in my book, Preventing Strategic Gridlock, we talk about eight different ways [culture manifests]. In the resource page for this particular episode we’ll have that list of the eight different ways that culture is reinforced.
Scott Harper: Okay, very good. So, what you’re saying is that, as the company recognizes it has to grow and has to implement certain structures and change how things are done, they have a culture, and they want to change the culture to a certain extent. Change some things to reinforce “now, we’re larger we have to work in different ways.” They have to look at all the different ways that what was may still be hanging on, because people resist change. I mean, “this is how I do it; this is what I’m used to.” Or when people come in from a different company − a different place and they say, “This is how I did it back where I was.” You have to look at all those different ways that things are reinforced and done. Again, stay very conscious of what is it we want to keep, and what is it we want to evolve.
Pam Harper: That’s true. In fact, it really speaks to the idea that we get into leadership habits.
Scott Harper: Okay.
Pam Harper: A lot of the reasons that we do things, especially when you’re talking about getting work done, is it isn’t always a conscious thought, “Okay, we want to do it this way.”
Scott Harper: Right…
Pam Harper: As much as, “This is the way that we do it.” I mean, why do we have managers? “Because that’s what I’m used to in a company we have managers.” Yet, Zappos for example is looking at taking away managerial titles and coming up with totally a different type of organization.
Scott Harper: Here’s a big company that wants to maintain − they are over a billion dollars…
Pam Harper: That’s right.
Scott Harper: − They want to maintain their entrepreneurialism.
Pam Harper: But there was a conscious thought about it; and so what I’m saying is that we get into habits of working, and as we grow and we want to become more efficient, we want to become more effective, but we are just so used to “this is how we do it” that it’s almost a knee jerk reaction. People do the wildest things. I remember going into one company and there was a person there who was weighing the mail.
Scott Harper: Weighing the mail…
Pam Harper: Weighing the mail, because it made sense based on some legitimate needs that the company had many, many years ago − and Uncle Louie was doing the mail weighing because it made sense back then. They had to come up with some reason to keep Uncle Louie on.
Scott Harper:But Uncle Louie wasn’t there anymore?
Pam Harper: No.
Scott Harper: Yeah. I remember you telling me about that.
Pam Harper: The fact is, it’s another − It’s a habit of thought. A habit of leadership. We have to look at whether our habits of leadership are serving us well.
Scott Harper: Yes, and really, it’s the CEO who really has to own this process, because that is the person − the top leader − the person who really is looking at the financials, the strategic, the operational structure and all of that − that’s the person who really is accountable for making sure for instance, that silos don’t take hold and keep holding on and locking things down. That’s the person who’s accountable that things stay coordinated as growth happens, and that the things that they really value stay getting reinforced in the right way.
Pam Harper: Culture should be owned by the CEO, absolutely. And yet in companies where there are boards, the board also has an ownership of what’s happening too, although it is through oversight.
Scott Harper: Okay. That make sense.
Pam Harper: What we’re really talking about here is the importance of making sure that once you’ve identified what entrepreneurial means in your company − you’re making sure that you are looking at all the different ways that being entrepreneurial, as you define it, is being reinforced or is being blocked. Then, you’re in a position to do something more about it.
We’re going to take another quick break, and when we come back, we’ll talk about what exactly you might be able to do to start addressing staying entrepreneurial as your company grows. Stay with us…
Scott Harper: Is listening to Growth Igniters Radio providing you with new insights, inspiration and immediately useful ideas you can use to take your company to it’s next level of success? If so, imagine how much more you and your company could get from a highly customized in-person Growth Igniters event on this topic as part of your next company off-site. Go to www.GrowthIgnitersRadio.com, click “Contact Us” at the bottom of the page, and we’ll get back to you to explore how we could best help you achieve your most important goals.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last two segments Scott and I have been talking about how it is possible to preserve a company’s entrepreneurial edge even as it gets to be a larger organization.
Scott Harper: Now, Pam. Let’s get down to specifics. We’ve talked about some of the ideas about balancing entrepreneurialism and growth. How do people actually do that? What’s the first thing that you’d recommend?
Pam Harper: Remember how we talked about creating a common definition of what it means to be entrepreneurial.
Scott Harper: Sure.
Pam Harper: That needs to be the first foundational thing that one does as a regular part of strategic thinking and planning.
Scott Harper: All right.
Pam Harper: Too often it’s left off, because there’s a lot to do and we’re not thinking about it − but again, if you think about how much can happen even in three months time, making it a part of regular strategic thinking and planning makes a lot of sense.
Scott Harper: Okay. You want to communicate this with the organization, obviously. New customers, new employees, outsource providers, and so on − and make sure that people have an idea of what behaviors we want, what outcomes are we having, and having this all guided by the strategy − so, making sure the people understand what our strategic objectives are and how are they are evolving as we grow.
What is it that we need to keep our eye on as we continue this growth? I know that some people in companies as they grow, as you said − they start to really hyper focus on, “This is my accountability. This is my job. I’ve got to really do this.” That’s why some people have said that structure and process and bureaucracy stifle entrepreneurialism. It’s because people sometimes lose track of all aspects of the business that are important, like being customer focused, being flexible, watching out for where things are going and not just where they are right now, and how I get my job done. Having those conversations this is very, very important. Not always easy.
Pam Harper: That’s true, but very worthwhile. I mean, we’ve talked about it before − when you ask people why are you doing what you’re doing, how does it serve the customer and how does it serve the mission and the vision of the company, that helps with clarity.
Scott Harper: Okay.
Pam Harper: Because sometimes people will say, “I didn’t realize that I was doing this. That’s something I don’t need to do anymore.” Yet you have to stay coordinated. That’s the first thing.
Scott Harper: What’s the second?
Pam Harper: Second is going beyond just saying what we want to do, what we want to see, and to actually go back and look. Take an audit and find out how many ways what you’re looking for to have happen is actually being enforced in the culture. I talk about that being “cultural advancers and blockers” in the book Preventing Stratyegic Gridlock, and I talked about how this shows up. We have to make it a regular practice to take a look outside of ourselves, and sometimes this means pulling in someone who’s not just us, but rather an outside expert who can see all of these different ways [that culture is expressed].
Scott Harper: Okay. Getting that perspective − because we get locked into thinking we’re doing a good job and we think we’re moving along the path, but these weird things pop up and we don’t quite understand why people are not doing things the way we thought they should be done. You’re saying that having a perspective and getting that outside edge or advantage of [different] outlook can really open up those conversations.
Pam Harper: That’s right. What you’re doing is you’re not just looking at what you want to see happening, you’re also looking at is it happening.
Scott Harper: Right.
Pam Harper: The third step is looking at why what you’re seeing happening or not happening − why it’s happening that way.
Scott Harper: There’s always a reason…
Pam Harper: There’s always a reason…
Scott Harper: Even though it doesn’t seem sensible, sometimes.
Pam Harper: And the thing that is most dangerous is to assume that we know why it’s happening.
Scott Harper: Yeah.
Pam Harper: Because there can be multiple reasons, as I had said in the example with uncle Louie weighing the mail − it didn’t make sense, but it did [have a reason]. There were reasons why that had been put into place; there were reasons why it was continuing, and people had to step back and say, “Is this something that we still want to do? Is it important?” In this particular case they decided no. In the discussion that we were having earlier about whether the company was going to invest in innovation in the same way that they had been, looking at what is it that we want to see happen − again they were doing something. Really, they were investing in innovation at that point in time, and they had to decide “do we want to, and why are we continuing to do this if we don’t want to.”
Scott Harper: In that particular example, the board and the CEO got together and decided to continue to invest in the costly − at that point − the costly process of innovation and product development. Looking back now over a couple of years, it’s really done them well and they are far more profitable than they were at the time.
Pam Harper: What we’re talking about often times is reconciling. That’s what all of this looking at [behaviors] and looking at the reasons why really is − it’s because ultimately, we have to come up with why it is happening and what are we going to do about it, and reconciling it, and coming up with what we’re going to do going forward [to get more of what we want and need].
Scott Harper: What you’re really saying, Pam, is that growth is not necessarily the enemy of entrepreneurial spirit, but that it has to be shaped and cultivated very carefully, and it has to come from the top so that all the pieces fit together properly.
Pam Harper: And we have to look at it frequently as we continue to grow, because life changes, circumstances change, and the business environment changes.
Scott Harper: I couldn’t say it better myself.
Pam Harper: If you have questions related to today’s episode or any episode, go to “open a conversation with us” at the bottom of the episode page. To find out who our guest will be next Wednesday, go to www.GrowthIgnitersRadio.com and look in the side bar for a schedule of upcoming episodes over the next few weeks.
Scott Harper: Thanks for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out resources related to today’s conversation, share on social media, or open a conversation with us, go to www.GrowthIgnitersRadio.com and select episode 21.
Pam Harper: Until next time, this is Pam Harper…
Scott Harper: … and Scott Harper…
Pam Harper: Wishing you continued success, and leaving you with this question to discuss with your team:
Scott Harper: “What does “entrepreneurial” mean to us in our company?”