The all-consuming drumbeat of stock price reverberates through the executive suites of stock market-listed companies across the globe. Indeed, stock price is the first thing CEOs think of each morning – and the last thing they think about before they fall asleep at night. That’s to be expected, since the way a CEO addresses this vital issue is the primary factor over which careers are made or broken.
Unfortunately, in their quest to deliver the highest possible stock price, CEOs may take actions that can be productive in the short run, but devastate their companies’ abilities to perform over the long term. Actions such as cutting costs by terminating employees, closing plants, or otherwise diminishing the work environment may force stock prices higher for a time, but in the end, these actions can seriously impair a company’s ability to compete and grow.
Such companies cannot be the best that they can be – and that’s a major predicament for Corporate America.
Entrepreneurs operate in a very different environment. The entrepreneur’s role is to breathe life into new ideas. Unlike their resource-rich, big corporate brothers, entrepreneurs who are launching fledgling enterprises have little to protect and everything to gain by advancing new ideas and concepts. Although few have sufficient personal resources to achieve what they are setting out to achieve and most aren’t professional managers, they set out anyway. They go into the marketplace looking for ways to solve problems, old and new, with the expectation that the marketplace will reward them for being innovative.
Entrepreneurship is as seductive as it is risky and difficult, and many in the corporate world attempt to take the journey.
In the 1980s the concept of “Intrapreneurship” became fashionable within Corporate America. Under this concept, certain individuals inside a corporation who were viewed as having an innovative spark were allowed limited autonomy to create new projects and launch initiatives. “Intrapreneurs” had a difficult lot, however. They were typically considered lone wolves, anomalies in the corporate environment, and their autonomy was restricted.
A difficult fit, to be sure.
Although a few good projects were launched under the Intrapreneurship concept, the venture capital community was successful in convincing Corporate America that they should be the ones launching new business ventures. According to the venture capitalists, it was, after all, easier for Corporate America to purchase incubated start-ups from venture capitalists than to adopt the entrepreneurial way of life.
And so the problem for Corporate America continues. The need to deliver results to investors has intensified, and employees are increasingly hungry for opportunities to participate in growing the businesses in which they work. Thus, a new concept has been born that is taking Corporate America by storm. We call that concept Corpra-Preneurship.
It is becoming increasingly clear that companies with entrepreneurial cultures enjoy more success than their more traditional counterparts.
I restate: Companies that function in a more entrepreneurial way than their traditional counterparts are more likely to enjoy better stock market valuations.
Companies that provide better work environments, are more innovative, less hierarchical, and that provide more opportunities to their employees are the ones that will thrive in the future. Employees are no longer willing to be mere soldiers in highly structured environments. Employees want to be team members – and they want to be part of the solution. They crave an opportunity to make their contributions felt in the same way that the contributions made by their entrepreneurial counterparts are felt.
Compensation is a major issue. Entrepreneurs make their money when they sell their businesses. Although an entrepreneur makes a living along the way, his or her goal is to build a company that can eventually be sold to fund retirement and future lifestyles. Entrepreneurs work hard to put their investors, vendors and employees – all of their stakeholders – “on the same side of the table” by providing compensation that is tied to the overall productivity of the business as a whole.
In Corporate America, people are paid routinely, for the jobs they were hired to do. Pay isn’t tied closely enough to production and success. And although some get ownership in the company, a dramatic conflict frequently exists between executives’ interests and those of the company’s stockholders. Employees and executives aren’t sitting “on the same side of the table” as the stockholders.
This scenario breeds trouble.
When executives are paid large percentages of their compensation as long-term stockholders, their interests tend to be much more pure than if their compensation is pinned to short-term gains. Think about the money corporate executives have made in the last 10 years. An executive like Bill Gates has made people happy because he made many people millionaires while he was making his own billions.
I’ve never met anyone who begrudged Bill Gates the money he has made because he brought many others along on his ride to success.
There are, however, plenty of other executives who have made tens or hundreds of millions of dollars – and left their companies in shambles. Some are currently in jail. Executives for companies such as Adelphia, Enron and MCI sit in prison or face other troubles. They destroyed the hopes and dreams of the people who trusted their leadership. Such executives abuse the system and fail to deliver on the promises that they made to their stockholders and to all of the other stakeholders who labored to help them achieve success.
It’s time for companies to adopt the budding trend of Corpra-Preneurship, which rewards employees, management and investors for building successful companies.
When companies adopt an entrepreneurial attitude toward problem solving, valuing people, and being quick to market, they succeed wildly. Large companies need to put their resources to work and harness the power of their workforces like never before.
They need to become Corpra-Preneurial.
Corpra-Preneurial corporations adopt an entrepreneurial mindset and culture. Examples include Microsoft and Google – companies that take an entrepreneurial approach to problem solving, but can bring to bear the resources of powerful corporations. These companies must become models for others.
Entrepreneurial means innovation, and it means being quick, but it also means having the vision and determination to make dreams come to life.
As an entrepreneur, I grew my company worldwide and later sold it to a Fortune 500 company. I’ve sat on both sides of the table. I know what it means to be an entrepreneur, and I know what it means for corporations to protect their turf. Under my leadership, Growth-Logic, Inc. has worked successfully with large companies to help them become more entrepreneurial in their approach.
The most powerful tool in our arsenal is the Organizational Bullseye. The Bullseye helps identify a company’s issues and objectives so that everyone can sit on the same side of the table. This isn’t an approach that comes solely from the top. We believe that it must start at the top and at the bottom, and that it should meet in the middle. A grassroots approach to entrepreneurship is vital in order for everyone in the company to “buy into” the vision of the entrepreneurial approach fortified by the resources of a major corporation.
The practice of Corpra-Preneurship is being adopted by companies all across America, and it is being put into place using tools such as the Organizational Bullseye, which defines what a company needs to do to accomplish its objectives.
Our goal is to bring entrepreneurship to corporations because if we can help corporations become more entrepreneurial, those companies will be more successful. Their stock prices will increase in both the short and long run, and the companies will deliver more value to their stakeholders. They will be better places to work, and ultimately, as more dollars start to flow, the entire economy will benefit from the growth and success that they experience.
Summary on Joel G. Block
Often dubbed a “Growth Architect” by his clients, Joel advises companies of all sizes on explosive growth strategies by driving revenue and sales. Well known in the capital marketplace, Joel lends his expertise as a successful entrepreneur to companies as a speaker and advisor. To become more entrepreneurial in your approach, or to help us work with companies to adopt a Corpra-Preneurial approach, please visit www.joelblock.com.
See Also, Pamela Slim’s interview with entrepreneur Guy Kawasaki