Seeding an entrepreneurial work culture (Drucker Forum)

…… The original, longer version of this post was published on October 31, 2016 on the Global Peter Drucker Forum Blog. First published here in February 2017 ……

Experimentation and creativity have long been stifled in many organizations.

Command-and-control leadership, overly complex processes and slow decision-making are among the reasons for this unfortunate state. Data from my 10th annual research with 310 participants in 27 countries confirm this:

47% say their C-level managers have command-and-control leadership styles.
53% say their organizations have complicated processes.
40% say slow decision-making is a serious concern holding back transformation initiatives.
Only 37% agree that people freely challenge ideas, including the business model and work practices.

A fundamental question: how to make it easier for motivated people to produce new ideas and work with passion to achieve them?

Four work practices provide a clue.

In my research, I asked respondents to indicate their agreement with the statement: “We have a work culture of freedom to experiment and take initiatives.” Only 15 organizations strongly agreed with the statement. They are very different from each other. They range in size from under 500 to over 100,000 employees and are based in Europe, North America, and Australia. They work in different sectors including consumer retail, banking, food and agriculture, government, humanitarian, construction and professional services. The demographics are extremely diverse, but work practices are highly similar across the organizations in this entrepreneurial sample.

We will look at four pairs of work practices. You will see that the first item is specific to the individual or the team; the second relates to its impact in the cross-organizational context. In each pair, the first item is at a much higher percentage than the second item, for both the entrepreneurial group and the full group. The significant finding is that the gap between the first item and the second is much smaller for the entrepreneurial group.

For example, 87% of the entrepreneurial group say that individuals self-manage and self-direct their work as they see best, setting their own objectives. Out of these, two thirds say the objectives are visible across the whole organization. In the case of the full group, only 55% say individuals self-manage and only one third of these say objectives are visible across the organization.

Entrepreneurial sample greatly outranks the full group when it comes to cross-organizational work practices.

These four work practices are conducive to creativity:

Letting individuals self-manage, setting their own objectives AND making these objectives visible across the organization.
Sharing business goals and plans across the organization AND encouraging people to give input.
Letting teams self-manage AND encouraging them to work out loud, sharing on-going, unfinished work as they progress.
Giving people business responsibility AND trusting them to shortcut enterprise processes when they feel it is necessary to advance their work.

Potential risks versus potential benefits

The work practices above have risks and benefits. It is often the second point in our pairs of work practices above — the one that touches the enterprise or cross-organizational dimension—that represents a greater risk as well as a greater benefit. For example:

Shortcutting enterprise processes can result in errors and sanctions, or it can accelerate getting a new product to market.
Working out loud on a project can result in other people seeing and misinterpreting intermediary project discussions and disagreements, or it can catch the attention of people outside the project who have valuable input to contribute.

A workplace where experimentation and creativity live intelligently alongside risks that are worth taking.

An entrepreneurial work culture cannot be created overnight and involves much more than the points covered in this article. However, work practices are a starting point. Like seeds, once planted, they will spread if growing conditions are right. Our entrepreneurial sample suggests that strong, cross-organizational flows are part of a conducive growing environment. The resulting horizontal energy counterbalances the traditional top-down control still common in many places. It helps build a workplace where experimentation and creativity live intelligently alongside risks that are worth taking.

Data and analysis for a detailed understanding

Pair 1: Individuals can set their objectives, but these objectives are not always visible across the organization.

Entrepreneurial sample: 87% say that individuals self-manage and self-direct their work as they see best, setting their own objectives and nearly two thirds of this self-management segment say the objectives are visible across the whole organization.
Full group: the figure is 55% with only one third saying objectives are visible.

Pair 2: Business goals are communicated broadly, but people are not always encouraged to give input.

Entrepreneurial sample: 100% say that business goals and plans are communicated throughout the organization, and nearly all say people are regularly encouraged to give input to these goals and plans.
Full group: the figure is 78% with only half saying people are encouraged to contribute.

Pair 3: Teams can set their goals, but it is rarer for them to work out loud—sharing with the organization as a whole.

Entrepreneurial sample: 86% say that teams set their goals and self-manage, and over half say that teams make their work visible to the larger organization as they work, and before the work is finished. They “work out loud” through continual, ongoing use of internal communication channels.
Full group: the figure is 53% but at least over half say the work is made visible.

Pair 4: Teams may have business responsibility and be accountable for producing actionable results, but they are not allowed to shortcut enterprise processes to get faster results.

Entrepreneurial sample: 100% say that teams have business responsibility and are accountable for producing actionable output. Two thirds say that teams are enabled to act and, when necessary, shortcut enterprise processes to advance rapidly.
Full group: the figure i 69% and 25%.