Lessons from the Entrepreneur - Part 3 of 3

What makes an entrepreneurial culture

It should go without saying that we now function in a world of intense competition. Additionally, those who invest in companies are becoming less and less confident in management's ability to create value. As a result, financial markets are becoming increasingly volatile. We also need to consider things like shorter product life cycles. Because of these factors and many more, it is absolutely imperative for every organization to build an entrepreneurial culture. This article will summarize some key components within the entrepreneurial culture.


As you may recall from Lesson 1, entrepreneurs never manage projects in a single stage. They think in terms of increments and they always learn from their mistakes. Traditional organizations destroy the project spirit by prohibiting people from going back to design or planning and thus, changes are not allowed. This in turn forces an outcome that never fits. Entrepreneurs have the freedom to experiment. People can stretch and take risk, bringing new ideas into the organization. Traditional organizations restrict experimentation through an array of memo's, meetings, policies, politics, etc. Therefore, an entrepreneurial culture allows people to experiment in a "non-judgmental" environment. No idea is judged or ridiculed.

An informal management style is also important to the entrepreneurial culture. Informal and open organizations allow anyone to communicate with anyone else anytime, anywhere. This fosters innovation and change. An entrepreneurial culture will reinforce innovation through incentive programs, rewarding people for their new ideas. Entrepreneurs also create informal environments by making everyone equal. This is symbolized by not having lush offices, large bonuses, private parking, and other special perks. Everyone exists within the same environment. Contrast this to the traditional organization where numerous perks and other attributes segment the workforce. Only when you minimize all differences can you expect people to be viewed equally. Once everyone is equal, an entrepreneurial culture of open communication and new ideas will emerge. And don't forget to share the power and the rewards. Empowerment is part of equality.

In order to have creativity and innovation, we need to have an environment that is fun. For example, Southwest Airlines has a "fun" corporate culture thanks to its President, Herb Kelleher. As Kelleher has pointed out, intangibles like a "fun" culture are extremely difficult for the competition to replicate and as a result, this becomes the competitive advantage for a company like Southwest Airlines. Creating these intangibles is a major challenge in building the entrepreneurial culture.

One way many organizations create innovative cultures is to get into the habit of introducing new products and/or services. A continuous flow of new products or services seems to ensure that the organization is operating in a creative mode.

Finally, don't forget to communicate your strategies over and over again. It is absolutely critical that everyone has a clear understanding of the strategic objectives of the organization. According to Kaplan and Norton, less than 10% of the people in a typical organization will truly understand what the organization is about and where it is going.

In conclusion, all organizations can gain enormously by simply changing their cultures over to an entrepreneurial culture. In today's world of intense competition, an entrepreneurial culture is critical to staying ahead of the competition. Learning from the entrepreneur is one of the best approaches to creating long-term value for each and every organization.