Five Practices of Entrepreneurs Inside and Out
By Heidi Neck
All people can learn to think and act entrepreneurially and do so in various contexts. However, our current definitions of entrepreneurship are fostered by an ongoing rhetoric.
Today’s narrative mythologizes super heroes—entrepreneurs who are born, not made; geniuses with the brilliant idea working alone in the garage; stars achieving fame and unimaginable fortune literally overnight. They’re fearless, iconic, and irreplaceable. Their celebrity status so well-known around the world, we call them by name.
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Mark Zuckerberg. Bill Gates. The late Steve Jobs. They’re the few, but their story becomes the single story of entrepreneurship—a stereotype that few of us can personally identify with and one that does little to represent the realities of today’s entrepreneur experience. And, of course, all of these stories are focused exclusively on new venture creation.
As we look at the old myths of entrepreneurs starting new businesses as well as the more traditional, structural initiatives often labeled corporate entrepreneurship or intrapreneurship, it appears—and many have argued—that these forms of entrepreneurship are radically different. And, traditionally they have been.
However, today we are seeing a different story emerge. Our research found that the entrepreneurial experiences and practices of individuals in these very different contexts are strikingly similar.
Today’s entrepreneurs are entrepreneuring, according to our research. Entrepreneuring is an action taken by an individual or group “to create something new—a new idea, a new thing, a new institution, a new market, a new set of possibilities.”1 We studied new venture entrepreneurs as well as those entrepreneuring inside organizations of all kinds—corporations, government organizations, nonprofits, and religious organizations. And, the method and practices they use are more alike than different when creating something new.
There are five specific practices of entrepreneurs both inside and out. First, they join a tribe. Entrepreneurs need membership in physical communities where ideas can be shared and shaped. Obtaining membership into entrepreneurial communities can develop social capital resulting in enhanced reputation, creation of trust, development of currency and ability to leverage networks. Though there are ample tribes for entrepreneurs on the outside, the need is just as strong yet lacking on the inside.
Second, they progressively disclose the idea. Borrowing a term from interaction design, they exhibited a communication technique called progressive disclosure. Using this technique, entrepreneurs sequence information and actions across several groups—starting with only a small subset of essential people and then spanning out across their broader networks. Outside entrepreneurs progressively disclose to get early validation of their idea while entrepreneurs inside use progressive disclosure to build consensus and get access to organization resources and talent.
Third, they intentionally iterate. Entrepreneuring requires iteration and experimentation, yet the language given to describe this aspect is centered on the concept of failure: setbacks, false starts, wrong turns, and mistakes. Iteration is a cyclic process of prototyping, testing, analyzing, and refinement. It’s a way of building knowledge through experimentation with a goal toward learning and shaping rather than killing and burying the idea or project. Entrepreneuring framed as failure is scary and often leads to inaction. Framed as intentional iteration, it creates a mindset that is prepared for and expects multiple learning moments.
Fourth, they calculate acceptable loss. Entrepreneurs outside tend to identify financial loss as the biggest risk, but entrepreneurs inside can be paralyzed by a fear of losing their well-earned social capital. Entrepreneurs inside and out manage potential loss in various ways from working on multiple opportunities at one time (outside) to identifying spaces of permission (inside) to work on the idea. Consider what’s at stake overall, but the acceptable loss lens inspires a different type of calculation—calculating what you are willing to lose to take ONE step.
Finally, they de-educate and act to learn. Past educational experiences and even corporate experiences tend to hinder rather than encourage entrepreneuring. Unlearning habits from previous experiences is necessary, especially when these habits conflict with the experimental and iterative nature experienced by most entrepreneurs. Entrepreneurs outside tend to do first and then learn from that doing while those on the inside have to worry about being held hostage by organization history.
These five practices are at the core of building a vibrant ecosystem for entrepreneurship in various contexts. What’s interesting is that a lot of money, time, and energy has been invested in building entrepreneurial ecosystems that have developed the entrepreneurial communities of places such as Boston, Silicon Valley, and Austin. So, how can we develop ecosystems inside organizations to promote entrepreneurial activity—making entrepreneurship a mainstream rather than sequestered activity?
The five practices of those entrepreneuring inside and out can help us figure out what leaders of large organizations need to do to build stronger entrepreneurial organization. What it really comes down to is how top leadership can develop entrepreneurial ecosystems inside organizations to promote entrepreneurial activity as a mainstream, strategic activity.
An entrepreneurial leader influences others to think and act entrepreneurially inside their organizations. Entrepreneurial leaders inspire others to embrace extreme uncertainty using a methodology grounded in the practice of startup entrepreneurs. By studying entrepreneurs inside, we can better understand what it takes to manage EIs or to develop EIs.
Organizations are not entrepreneurial; people are entrepreneurial. Organizations don’t create; people create. Organizations don’t fail; people fail. Organizations do grow but not without the ingenuity, creativity, resourcefulness, action, and leadership of the people inside.
Entrepreneurship inside is not a structure issue but an organizational change issue. What role will you play in this change? What is the cost of not changing? To me, it makes no sense why large organizations lose their entrepreneurial capacity over time. After all, most organizations are better equipped to act on opportunities than are new ventures.
- P. 478, Rindova, V., Barry, D. & Ketchen, D. J. 2009. Entrepreneuring as emancipation. Academy of Management Review, 34(3), 477-491.