To successfully transition to an entrepreneurial organization, a business needs to develop processes that are effective, efficient and scalable. While there will always be a need for heroic efforts, they should become the exception. Heroic processes should be the rule. The challenge for the entrepreneur becomes how to create processes that capitalize on what has been learned from heroic efforts, and capture it to be used again.
The maxim of constant innovation is proudly carried by some of the world’s biggest brands and is often associated with flashy new products, but it doesn’t simply apply to expensive initiatives. Your business has a product or service that’s unique, but it won’t be unique forever. An entrepreneurial organization leverages its team to find ways to differentiate itself from the competition. It improves on customer relations, means of production, or other elements to consistently offer the best experience.
Leaders can transition their business from being a one-hit-wonder to a hit-making machine by creating value at every step.
Transitioning to an entrepreneurial organization means instituting a solid foundation of performance management that helps employees give their best. Communication is at the heart of this. Your people need to know the answers to these questions: 1) Who do I report to? 2) What am I responsible for? 3) What are our company goals? 4) How do I support those goals? 5) How will I know if I’m doing a good job? 6) What support will I receive to help me improve?
Most fast-growing companies know to be protective of their cash and they know that fast-growing companies are likely to die not because of the P&L but because of cash flow. This dichotomy can produce a conservative view towards investment. Without sufficient investment a company’s ability to grow will be limited, so you need to be willing to wager your cash on the right investments.
How do you pick the right bets? Embrace the dynamic tension that results when considering both information and intuition; assess opportunities with both “I’s.” Use information but don’t dismiss the learning that underlies intuition; in other words, value your intuition but don’t disregard the richness of information.
You are not scalable. At some point your business will outgrow your capability to do it all. That’s why you need to extend your company’s leadership beyond yourself to a true leadership team; people with the right skills, traits, motives and values to oversee and transform your business. Yes, you’ll need to relinquish some control. Yes, they might not do things exactly as you would. And, yes, they simply might not be as good as you. But you still can’t do it all. So find the best people you can, support them, develop them, and then let them help you win.
Small and medium-sized enterprises are not the same. Growing from small to medium-sized means transitioning from an entrepreneurial business to an entrepreneurial organization. This requires some major changes to how you, as an entrepreneur, think about operations, value creation, people, finances and your own role. Are you committed to making the transition?