Saturday, May 29, 2010

Celebrate Entrepreneurship

I had the opportunity to work at the Best Buy Company from 2001 to 2009. Although the company was formed in 1966- almost 45 years ago- I was always surprised and impressed to see the founder, Richard Schulze, as a frequent presence at corporate headquarters. While Dick Schulze long ago turned over day-to-day operational responsibility and decision making to others, his innovative spirit, willingness to take risks, and drive for results are still very much a part of the corporate culture. Even though Best Buy is now one of the largest business enterprises in America with almost $50 billion in revenues and 150,000 employees, it is still a company that celebrates entrepreneurship.

It is absolutely fascinating to contemplate that every business in the world, including behemoths like General Electric (Thomas Edison), Wal-Mart (Sam Walton), Toyota Motor (Kiichiro Toyoda), and Mary Kay Inc. (Mary Kay Ash) started as nothing more than an idea in someone's head. That person either had a new and better idea, or got sick of working for someone else, or both. And he or she also invariably had a high tolerance for uncertainty and an intense determination to succeed.

It is this powerful spirit of entrepreneurship without which we could not survive and the world economy would crumble. While clearly not everyone is cut out to be an entrepreneur, we all desperately need and depend on these founding visionaries- whatever the size of the enterprise they invent- to continue to innovate, to strive, and to build.

There is a strong difference of opinion as to whether entrepreneurship can be taught. Are entrepreneurs born, or can they be made? If the increase in formal entrepreneurial education over the last thirty-plus years is any indication, many business schools believe the skills can be learned. Today, better than 2000 American colleges and universities offer classes in entrepreneurship, compared to a paltry 200 back in the 1970s.

Gregg Fairbrothers is the founding director of the Dartmouth Entrepreneurial Network, and he teaches a hugely successful course in entrepreneurship at the Tuck School of Business. In Fairbrother's class the students learn through experience; the vast majority of the work takes place outside the classroom. Students develop and present their own ideas for a startup, and then are tasked with refining their approach, testing in the marketplace, and pitching to potential investors to secure financing. Clearly, Fairbrothers believes that learning by doing in the hard school of the marketplace is the only way to teach entrepreneurship.

Fairbrothers also acknowledges that entrepreneurship is a difficult concept to define and measure with any precision. He suggests that entrepreneurs are characterized more by a set of identifiable traits than by what they do, and that the range of entrepreneurial behaviors can be plotted along a classic bell curve. In a recent Fortune Magazine article Fairbrothers says, "So the question is, can you take a point on that curve and move it? If 'entrepreneurial' is to the right, can you move it that way? I know I can move it that way. I've done it."

Entrepreneurship, therefore, is not a single trait that some individuals and organizations possess and others do not. It is not an all-or-nothing proposition, but rather a spectrum of behaviors that includes innovative approaches, calculated risks, and willingness to fail and try again.

Starbucks CEO Howard Schultz recently held a series of brainstorming meetings with a group of his employees. Schultz was the entrepreneurial visionary behind the massive growth of the Starbucks brand. He left the company for a time only to return in 2008 as Starbucks struggled to maintain its impressive growth. The employee focus group helped in the effort to return to entrepreneurial roots. Schultz says in a recent New York Times interview, "We lost our way… [so] we went back to start-up mode, hand-to-hand combat every day. And with the kind of discussion and focus that probably we had not had as a company since the early days- the fear of failure, the hunger to win."

Among other things, Starbucks now works to give its stores a local feel that reflects neighborhood history and architecture, and even displays the work of local artists. The company places greater emphasis on satisfying regional differences among coffee drinkers; Sun Belt customers prefer cold drinks and those in the Pacific Northwest drink more espresso, for example. Starbucks coffee buyers no longer focus exclusively on purchasing only beans produced in sufficient quantity to supply all stores; they now also buy local blends made in small batches.

While the jury is still out, as of early 2010, Starbucks had seen healthy increases in revenues, same-store sales, and its stock price. Leadership guru Warren Bennis says of entrepreneurs like Schulz that they, "keep shaking things up and pulling the stakes out of the tent because they like the mud and the chaos of reinventing, and Howard has a bit of that in him."

Do you as a leader display entrepreneurial behaviors? Do you like to shake things up, try new ideas, and take the occasional calculated risk? How about the organization you work for? Where does it sit on the "Entrepreneurial Bell Curve?" Do you celebrate entrepreneurship or have you become bureaucratic and stagnant? No matter the age or size of your enterprise (think Best Buy Corporation), a conscious effort to cultivate and maintain entrepreneurial roots can provide a healthy boost in performance.

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