Entrepreneurial Leadership

There has been much discussion around transformative innovation that explores new horizons and potentially disrupts business models, and whether this requires an entrepreneur mindset.

‘’Entrepreneurial Leadership’’ is a mindset that emphasizes the strategic management of risk and dynamic, changing systems. Entrepreneurial leaders look for new opportunities and ways to innovate as individuals and as part of a team.

These qualities often contrast with traditional leadership methodologies that emphasize following processes and procedures in an orderly, predictable way to minimize risk

Leaders need to harnesses the power of relationships, puts people first, enabling them to take on and solve daunting challenges enabled by a mindset that turns problems into opportunities that creates economic and social benefit.

Passion for ownership and collaboration, thriving in uncertainty, relentless optimism about the future, deeply inquisitive, open to new experiences and unique skills of persuasion are powerful mindsets and beliefs demonstrated by entrepreneurial leaders. The best entrepreneurial leaders are good at experimenting, learning and iterating that unleashes an ability to unlearn and relearn at an increasingly faster rate.

I’m always on the lookout for inspiration, and fortunately, I can find it almost anywhere. It’s one of the reasons
I love to travel. Since the senses are heightened around new circumstances, it’s an opportunity to reconnect to the world sensorially.

For many years I had the fortune to travel to Finland on business, the country values its people and offers many socially responsible programs, like free higher education. Its weather has also had a profound impact on its people. Winters are cold and there is a hardiness to the people as a result of dealing with that cold. The Finns use the word ‘’Sisu’’ to describe their character.

According to Wikipedia, the true meaning of the word Sisu:

“Cannot be translated properly into the English language. Loosely translated to mean stoic determination, bravery, guts, resilience, perseverance and hardiness, expressing the historic self-identified Finnish national character.”

Sisu is a great ideal that can be found at the heart of every entrepreneurial endeavour: contained within its English translation is the combination of guts, grit, resilience, determination, and bravery. It takes a combination all of the above to take a concept from idea to reality. Those who have changed our world had Sisu within them.

Sisu refers to mindset. In her book “Mindset,” Carol Dweck talks about two types of mindsets: one is fixed while the other is growth-oriented. By fixed, Dweck means that a person might think that they are born with a certain amount of talent and it won’t change. If you can’t sing, for example, you never will. A growth mindset is focused on learning: I can’t sing… yet. The yet is the most important part of the growth mindset.

Professor Carol Dweck – Leadership and the Growth Mindset

Perseverance, from my perspective, means one is not ready to give up yet, and therefore Sisu can be considered a growth mindset.

How are executives responding in todays new business world? As you may expect, they are largely focusing on maintaining business continuity, especially in their core. Executives must weigh cutting costs, driving productivity, and implementing safety measures against supporting innovation-led growth.

Unsurprisingly, investments in innovation are suffering. The executives in a recent survey by McKinsey & Company showed that they strongly believe that they will return to innovation-related initiatives once the world has stabilized, the core business is secure, and the path forward is clearer. However, only a quarter reported that capturing new growth was a top priority (first- or second-order) today, compared to roughly 60 percent before the crisis hit.

Possibly the most important discussion around business today, design lead creativity and innovation is about spearheading business reinvention and the disruptive economy.

Innovation, the successful implementation of new ideas, is an important driver of economic growth.

At IBEM combining our collective wisdom and experience we have developed a number of systematic models and approaches that can greatly assist on this journey of entrepreneurial leadership.

We start off with our entrepreneurial leadership canvas which defines a set of skills an attributes of an executive team that we believe are more fit for purpose for the future we face. This has been compiled with input from senior global executives and top thought leaders from academia. This forms the bedrock of all supporting models and approaches and when used in this context has the ability to unlock both strategic and cultural innovation.

We unpack the view of the three horizons of growth and how portfolio theory can have on growth aspirations with H1 running the core business, H2 transforming the core business and H3 innovating brand new businesses.

Appreciating the ease or product replication globally we commence a journey of discovery relating to business models and business model innovation. This ultimately leads to a discovery of what is the core job to be done for customers and does your business model play in the blue ocean or red ocean. Business model innovation is currently untapped in most organisations and is a wonderful approach to reinventing the customer experiences of the future.

Most organisations fail to take this opportunity.

Through our deep experience in building a design thinking school we demonstrate the power of this approach and how it can be used as a catalyst for innovation and driving a more human centred approach that is deeply embedded in empathy mapping.

Change is complex and in many cases not undertaken in a manner that uplifts and unlocks mindsets and beliefs. With our experience working with Harvard Professor John Kotter on his 8 steps of change process we believe this to be a wonderful foundation for any transformational change programme.

Successful innovation creates customer value through new products, services and processes, giving rise to new markets and economic growth, as well as contributing to higher productivity, lower costs, increased profits and employment. The central role of innovation in creating future prosperity and quality of life is widely acknowledged and accepted. Innovation drives long-term economic growth, and states that:

Innovation… has long been viewed as central to economic performance and social welfare and empirical evidence has confirmed the link between innovation and growth. This means that all businesses must understand the importance of innovation and develop an innovation culture to strengthen its efforts and outcomes. In addition to its growing importance and profile, innovation culture has also evolved in line with developing thinking about the scope and nature of innovation in a disruptive economy.

There is a huge gap between aspiration and reality – McKinsey & Company’s yearly global CEO report shows that 84% of world leaders are still operating in a horizon 1 strategy. Leaders who use vision to navigate the future often employ strategy to help them steer their organizations more effectively toward its destination.

To lead with vision, however, requires a fine balance among what matters today, what we anticipate will matter tomorrow, and how we can create the future through inspired, collective effort. There are three horizons that leaders should understand to ensure that vision unfolds as one would hope.

To define the horizon thinking:
• Horizon 1 ideas provide continuous innovation to a company’s existing business model and core capabilities in the short-term.
• Horizon 2 ideas extend a company’s existing business model and core capabilities to new customers, markets, or targets.
• Horizon 3 is the creation of new capabilities and new business to take advantage of or respond to disruptive opportunities or to counter disruption.

Leaders need to see beyond the short termism, uncertainty and address the risks while finding the opportunities in digital disruption, the economy, and geopolitical uncertainties, this requires a horizon 2 and horizon 3 approach. CEO’s are the company’s ultimate strategist.

In my experience, innovative cultures start with a philosophy and a tone one analogous to the classic parenting advice that children need both “roots and wings.” As an innovation leader, you must ground creative people in accountability for the organization’s objectives, key focus areas, core capabilities, and commitments to stakeholders. Then you give them broad discretion to conduct their work in service of those parameters. Obsessing too much about budget and deadlines will kill ideas before they get off the ground. Once your scientists understand that they are ultimately accountable for delivering practical products and processes that can be manufactured affordably, you can trust them to not embarrass you by wasting a lot of money and effort.

This trust helps forge an innovation culture. Innovation parenting also pays attention to innovators’ social development. Millennials, in particular, will expect and seek out opportunities to interact with people who interest and excite them exchanges that should, in turn, build innovation energy. To help individuals see where their work fits in the knowledge ecosystem, encourage relationships with colleagues in the internal innovation chain, from manufacturing to marketing and distribution. I ask my new hires to generate a list of who’s who at Corning within the first few months on the job. This helps them overcome the assumption that many hold that they must do everything themselves.

Innovation culture is made up of practices that support and strengthen innovation as a significant aspect of progress and growth.

It includes all structures, habits, processes, instructions, pursuits, and incentives that institutions implement to make innovation happen. It values, drives, and supports innovative thinking in order for it to be successful on an organizational level. To fully understand the importance of your company’s innovation culture you need to know how this impacts what employees do or say at work every day. This will help establish specific behaviours within the organization such as communication patterns between departments during meetings or who gets credit for new ideas when they come about.

While most business leaders now believe having a diverse and inclusive culture is critical to performance, they don’t always know how to achieve that goal.

Continuous innovation stimulates revenue growth and helps companies perform better during economic downturns.

Fixation on top-line growth can skew innovation efforts, resulting only in innovative gains from the low-hanging fruit of incremental growth.

Disruptive innovation is only possible when the entire organization is set up for an innovation mindset, a process that starts with proper leadership training. In this environment, nimble decision-making is a companion to rigorous experimentation. Team members must make the best decisions possible as quickly as required. These decisions must be open to re-examination as new information surfaces.

Trust is one of the most vital forms of capital a leader has today. Amid economic turbulence and global uncertainty, people are increasingly turning to their employers and business leaders as a source of truth, rather than their institutions and government officials. Trust, which can be defined as a belief in the abilities, integrity, and character of another person, is often thought of as something that personal relationships are built on.

A high-trust organization is one in which employees feel safe to take risks, express themselves freely, and innovate. When trust is instilled in an organization, tasks get accomplished with less difficulty because people are more likely to collaborate and communicate with each other in productive ways. As a result, outcomes tend to be more successful. No heroic leader can resolve the complex challenges we face today. To address the important issues of our time we need a fundamental change of perspective. We need to start questioning many of our taken for granted assumptions about our business and social environment.

Leaders serve as role models for their followers and demonstrate the behavioural boundaries set within an organisation. The appropriate and desired behaviour is enhanced through culture and socialisation process of the newcomers. Employees learn about values from watching leaders in action. The more the leader “walks the talk”, by translating internalized values into action, the higher level of trust and respect he generates from followers.

There are countless reasons why a growth mindset is important for business. There are several iconic brands that have adopted a growth mindset, including Apple, Bloomberg, and General Electric, and are known as innovators in their space. A fixed mindset can hinder growth and stops innovation from flourishing – a major problem for companies looking to get ahead of the competition.

One of the world’s most well-known and successful companies, Microsoft, switched its culture to a growth mindset when CEO Satya Nadella took over in 2014. In his words, prior to this mindset shift, “Innovation was being replaced by bureaucracy. Teamwork was being replaced by internal politics. We were falling behind.” Once Microsoft consciously started examining its work culture and implementing the attitudes of a growth mindset, including valuing innovation even if there’s failure along the way, the company truly transformed. As one employee put it, “The culture at Microsoft changed from ‘know-it-all’ to ‘learn-it-all’.” This ultimately helped Microsoft continue to lead in the technology space.

A growth mindset dramatically improves a company culture, but it must be practiced by senior leadership before junior employees will feel comfortable taking on the same mindset.

According to one study, employees that are in a company that values a growth mindset are 47% likelier to say their colleagues are trustworthy, 65% likelier to say that the company supports risk taking and 49% likelier to say that the company fosters innovation. To sum it up, employees value working at a company that fosters a growth mindset.

Companies that encourage a growth mindset must communicate what that mindset entails clearly with employees, so they know it’s okay to take risks, try new things, and potentially fail. According to the NeuroLeadership Institute’s Idea Report, “Growth Mindset Culture,” support from top leadership is critical for success in an organization. Sixty-nine percent of organizations used top leaders to communicate, teach, and role model growth mindset throughout the company.

Educating and instilling a growth mindset into company culture is a worthy cause for organizations looking to continue to innovate and stay ahead of their competition. When top leaders within a company embrace a growth mindset, the entire organization will follow suit.

Finally, to help bridge the trust gap we recognise that organisations need to work with each other and with wider society to identify practicable, actionable steps that businesses can take to shape a new relationship with wider society: a new ‘settlement’ based on mutual understanding and a shared recognition of the positive role that business plays in people’s lives.

The essential practices underpinning distinctive innovation have not changed in this time of crisis, but the relative emphasis and urgency of where businesses should focus has.

Above all, organizations need to realize that innovation, now more than ever, is a choice. Regardless of the relative emphasis and order, which for years have helped leading innovators more than double the total returns to shareholders compared to laggards, will continue to be critical in navigating and emerging even stronger from this crisis.

In the words of Professor Carol Dweck – Mindset: The New Psychology of Success:

“Why waste time proving over and over how great you are, when you could be getting better? Why hide deficiencies instead of overcoming them? Why look for friends or partners who will just shore up your self-esteem instead of ones who will also challenge you to grow? And why seek out the tried and true, instead of experiences that will stretch you? The passion for stretching yourself and sticking to it, even (or especially) when it’s not going well, is the hallmark of the growth mindset. This is the mindset that allows people to thrive during some of the most challenging times in their lives.”

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