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Developing an entrepreneurial mindset

Encouraging employees to be entrepreneurial is critical to success in the future, but how can organisations and managers achieve this?

We live in a complex, dynamic and volatile world. With technological advancements, geopolitical challenges, the expectations of young generations, and the growth of the gig economy, business as usual is not an option. The future of work is emerging so how can we prepare for it?

Developing an entrepreneurial mindset is an important piece in the future of work puzzle. That mindset is drawn to new opportunities and challenges, risk taking, embracing change, taking action persistently, pursuing initiatives, focusing on what matters and seeing the big picture.

Entrepreneurial ways of working are becoming more important, not just for small startups, but also for large corporations. To survive and thrive in volatile business conditions organisations large and small, new and established need to nurture and sustain an entrepreneurial mindset in employees and foster entrepreneurial culture.

How can they do that? Having an innovative setup doesn’t guarantee an entrepreneurial culture. High levels of motivation and the leadership's ability to inspire high performance are crucial. Research tells us that the quality of leadership and management is the key to success and it can be best improved when the enterprise is understood as a living organism; a community based on relationships. The success comes from the quality of management, mindset of leaders and employees, and the type of organisational culture.

Research described in my book The Management Shift shows that there are five levels of mindset and organisational culture that individuals and organisations go through. These levels are also referred to the levels of management maturity, and they can be mapped to the stages of entrepreneurial mindset as shown here:

At Level 1 a dominant mindset is 'Lifeless' and the corresponding organisational culture is 'Apathetic'. Not much gets done as people are too depressed to do anything and there is a lot of fear and blame present. At Level 2 the individual mindset is 'Reluctant' and culture is 'Stagnating': people do the minimum they can get away with just to get a pay cheque. At Level 3 the individual's mindset is 'Controlled' and organisational culture is 'Orderly', so leadership style is based on traditional command and control, employees are micromanaged and they do what they are told. Levels 1, 2 and 3 correspond to traditional management or Management 1.0.

A fundamental shift in performance, innovation and engagement happens when a critical mass of individuals move from Level 3 to Level 4. The dominant mindset among employees becomes 'Enthusiastic' and the culture becomes 'Collaborative'. Leaders lead by letting go, power and authority are distributed, there is a strong teamwork ethos and employees feel purposeful and passionate about their work. The idea is to ensure that teams of people are empowered to think of new services, new technologies, new ways of working, within a collaborative environment, to help the customer.

Employees at Level 4 can occasionally reach Level 5 where the individual's mindset becomes 'Limitless' and the culture is 'Unbounded'. Anything seems possible to achieve at this level, and amazing innovations materialise. Levels 4 and 5 correspond to Management 2.0, and this is where companies can experience more innovation, value creation and better engagement, and where entrepreneurial mindsets thrive.

At each of the five levels of management maturity and organisational culture there is a different drive for entrepreneurial mindset. At Level 1 entrepreneurial thinking is almost non-existent as people are focused on survival. At Level 2 it is random and sporadic, almost accidental. At Level 3 it is compliant, as employees attempt entrepreneurial tasks only when asked to. At Level 4 entrepreneurial thinking becomes embedded in organisational culture. At this level employees have autonomy to experiment with new ideas, they can make decisions on the basis of their knowledge rather than a formal position in organisational hierarchy, and they collaborate with diverse teams. Finally, at Level 5 entrepreneurial mindset becomes intrinsic, and it gets embedded subconsciously in employees as there are no limits in thinking about what can be achieved.

An entrepreneurial climate cannot be produced with ‘command and control’ mindsets and management styles, in which people are looking for a rulebook rather than new opportunities and have little autonomy to try new ideas. Organisations need leaders who understand the connection between the causes and the effects of culture and mindsets and the immense value of operating at Level 4. In Level 4 organisations discipline is maintained through a system of accountability, honest communication, and adherence to the organisation’s positive values and higher purpose. Such organisations are exemplars of implementing the future of work now, and will remain the key driving force for economic and social prosperity.

Vlatka Hlupic is professor of business and management, Westminster Business School and CEO of The Management Shift Consulting