The good, the bad and the entrepreneurial

I have a lot of admiration for entrepreneurs.  It can be tough and stressful road creating a business that will grow and last.

Over the last 18 years I've worked for both small entrepreneurial businesses and large established organisations.  Small entrepreneurial businesses are one of the most exciting to be involved with despite being hugely challenging.  Fresh and innovative ideas are often brought to life in a free spirited and flexible environment. 

If you look at the table at the side you'll see typical key areas listed that are associated with an entrepreneurial business, but are they all good and are some downright bad?

The answer to the above is actually quite simple.  The truth is that it depends where the business is in its life.  For new small entrepreneurial businesses the above list is common, but as the company grows it needs to develop and change.  For example, with 3 employees the above list is just fine.  Multiple the employees by a hundred to 300 and with the above list melt down will result unless there is swift change in key areas.  Here is the rub of course.  As the business grows it needs to develop and change, but making change is a painful process and gets avoided.  However, you just cannot avoid change if you want your business to grow and there are methods to make it less painful.

   

Comments

[Andy Warren]

I think this table sums up the entrepreneurial world quite effectively. What it doesn't necessarily highlight is the challenge that working in such an environment can bring to those from the world of large corporates. I've worked with a number of clients recently where a new FD or CFO had joined from a big corporate environment and found that they had to leave after 3 months because they couldn't handle the pressure the SME world brings. It can be a very different and quite isolated environment. If you're used to that, it's fine but seat-of the-pants dynamism and coal-face exposure are certainly not for everyone.

I also think the biggest challenge for entrepreneurial companies is the central one of the Founder Entrepreneur making the Decisions. As a business grows, if you have a founder who is not willing to let go then it can really hold back a business. Equally, a founder who lets go too quickly into the hands of inexperienced managers can also cause damage. There's a fine line but the key is that the founder entreprenuer has to accept that there may come a time when he or she is not the right person to take the company forward and move out of the structure you've described.

In all these scenarios, the most important thing is to have someone experienced and knowledgeable to talk to.

[Philip Woodgate]

Hi Andy

It can be quite a culture shock in both directions. Moving to a larger organisation - the bureaucracy and slowness to put into action new ideas. Moving to the smaller - the multiple demands of being flexible and getting the job done with stretched resources. Having worked in both I do believe both sides can take something from each other. For the larger organisation it includes being more innovative and adapting to the changing business world - Google are the current kings at this and doing rather well because of it.

[David Koopmans]

Hi Philip; interesting post! Like you, I used to work with a lot of entrepreneurs and I am now working for a company with strong entrepreneurial roots, having grown from a few people five or six years ago to over 350 now (and growing). I guess the secret to success is knowing where you are down that road from entrepreneurial to corporate and how you keep the best parts and shed the stuff that won't work.

[Philip Woodgate]

Hi David

Certainly is. You don't need to small to be innovative - look at Google. However, the culture of large organisation can mean it is sometimes like walking through treacle to get things done. Watching Yes Minster makes a lot more sense with a public or large company background.