deAdela Cristea April 12, 2010

Entrepreneur versus manager

articol published in the Consulting Review magazine

One of the latest concepts in business is the “corporate entrepreneurship”, i.e. implementing entrepreneurial business practices in the management of major corporations.

What does that mean? Shell we understand that the corporate management model, so much praised in the past 20 years is not really the key to success? Or that all the MBA’s and management, leadership, strategic planning courses, etc… involving managers of corporations do not hold the key to success and do not provide all the answers to the challenges these managers should face?

A year ago I was fortunate to know personally Larry Farrell, the American specialist who created the concept of Corporate Entrepreneurship and the No. 1 worldwide specialist in research and development of entrepreneurial practices.

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articol published in the Consulting Review magazine

One of the latest concepts in business is the “corporate entrepreneurship”, i.e. implementing entrepreneurial business practices in the management of major corporations.

What does that mean? Shell we understand that the corporate management model, so much praised in the past 20 years is not really the key to success? Or that all the MBA’s and management, leadership, strategic planning courses, etc… involving managers of corporations do not hold the key to success and do not provide all the answers to the challenges these managers should face?

A year ago I was fortunate to know personally Larry Farrell, the American specialist who created the concept of Corporate Entrepreneurship and the No. 1 worldwide specialist in research and development of entrepreneurial practices.

articol published in the Consulting Review magazine

One of the latest concepts in business is the “corporate entrepreneurship”, i.e. implementing entrepreneurial business practices in the management of major corporations.

What does that mean? Shell we understand that the corporate management model, so much praised in the past 20 years is not really the key to success? Or that all the MBA’s and management, leadership, strategic planning courses, etc… involving managers of corporations do not hold the key to success and do not provide all the answers to the challenges these managers should face?

A year ago I was fortunate to know personally Larry Farrell, the American specialist who created the concept of Corporate Entrepreneurship and the No. 1 worldwide specialist in research and development of entrepreneurial practices.

Until then I passed myself through the various phases of corporate management, later I encounter them in the consultant and trainer position and I continued to feel that training programs for corporate managers are still missing something, without being able to define exactly what would be that “something”… Meeting Larry Farrell, and later on working together with him, since we chose to represent him in Romania, clarified me what was lacking in the know-how of the corporate managers: the entrepreneurial spirit.

According to research conducted by Larry Farrell in the past 20 years, most decay of the large corporate companies were due to loss of their entrepreneurship, due to their suffocation with unnecessary bureaucracy and lack of entrepreneurial know-how in the management of these corporations.

The model is quite simple.
Every big company today started once from an idea, the dream of an entrepreneur. Then rose, inspired by the vision of the entrepreneur, the passion for customer and product of his self-inspired behavior to a level where the entrepreneur decided to step back and bring on top of the company a “professional” manager, with a strong educational background: an MBA and many training courses attended. The manager knew very well “to manage”‘ the business, to organize tasks, set rules and procedures, even to delegate and motivate…, but he didn’t knew how to “grow” the business, this being one of the major qualities of the entrepreneur.

And this is how, after a period of time, the company slows down its growth and enters a new era of its existence, the decline. This doesn’t necessarily means a decrease in absolute terms, but in many cases a decrease in relative values, i.e. a slower growth than the competition …

Decline phase may last several years, after which either drastic measures are taken to bring the company back on a growing trend (and here we talk about the Larry Farrell’s concept of Corporate Entrepreneurship, or in other words ” awakening the entrepreneurial spirit”) or otherwise, inevitably, the company will reach a phase of survival, which will come drive in into a merger, a takeover by another company, or a bankruptcy.

The concept of Corporate Entrepreneurship is a quite recent concept, and actually involves the return to some basic principles and common practices of the big entrepreneurs, which in most cases lack to corporate managers and employees of major companies. In such companies we find a form of convenience, the feeling that things can work without his/her personal contribution, that is normal to have good days and bad days, things still do not fundamentally depend on it …

Well, the entrepreneur can not afford this luxury. He feels the burden of his decisions every day, is constantly under the pressure of the results and never feels the comfort and relaxation of the employee, whether he is a manager or not.

Unlike the convenience of corporate employee, the entrepreneur has permanent contact with the reality and lives in every moment the consequences of his decision.

However, the research conducted by The Farrell Company, on the success of the most important entrepreneurs of the last century, revealed a number of common business practices that were the basis for their success. They can be centered on the 4 basic principles: sense of mission, customer/product vision, high-speed innovation and self inspired behavior.

Entrepreneurs today are not very different from me or you and the people behind today’s start-ups come from all fields of activity. Entrepreneurs today are ordinary people who are in extraordinary situations. Differences between them and managers of corporations are mainly an acute sense of the power of the consequences (positive and negative) and also a very different level of self-motivation.

Sure, the solution is not all to become entrepreneurs. The solution is to create more entrepreneurial companies in which we can awaken the entrepreneurial spirit at all levels, from top managers and continuing until the last employee.

Companies that will succeed this will ensure continuity and those who will remain frozen in bureaucracy, suffocated by unnecessary procedures and led by managers without entrepreneurial spirit will eventually slow down or be swallowed in the clutches of bankruptcy. The time of the “corporate management” have gone … It’s time to return to more flexible models of management, or in other words…. more entrepreneurial once…