· 3 min read · Features

HR can lead the way in encouraging entrepreneurial leaders

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As an organisation how can you gain competitive edge? In particular, now when many organisations are fighting over smaller markets, markets with less revenue or less growth potential due to the downturn, what can you do?

One option is to use the entrepreneur's profit-hunting instincts. The entrepreneurial attitude to business is more likely to deliver success because, in these fast-changing times, the corporate assumptions around customer loyalty or stability often don't work as well as the entrepreneur's tactics of finding new ways of doing things or seeing gaps in the market.

The problem is that creating an entrepreneurial approach in your organisation isn't easy. Many at senior level prefer those at lower levels to be managers more than leaders, despite their public statements. What's the difference? Simply, managers deliver what they are told to do and manage resources effectively, whereas leaders inspire, question the status quo, look for new ways of doing things, create vision and take more risks. For some in the boardroom entrepreneurial behaviour from junior staff is the stuff of nightmares. It's seen as being risky and potentially disruptive internally.

But this is short sighted. It might seem to create a quieter world for senior managers by reducing the bright ideas coming up from lower down, but it leaves them in the dark about real opportunities to improve customer service, efficiency, innovation and staff performance.

As organisations grow from their SME roots into a larger more corporate structure, there is an assumption that the skills of the entrepreneur must be superseded by the skills of the corporate manager and leader. This is where the ‘enterprise' becomes an ‘organisation'. But this misses the point. Why not combine the best of both? Take up a new paradigm in leadership thinking to create further competitive advantage - the entrepreneurial leader.  

Why is the entrepreneurial leader so valuable? Because they are good leaders but they also have stronger business skills and understanding, putting profit-seeking, managing change, innovation and looking for market disruptive ideas to the forefront. Thus the normal leader's vision - inspiring motivation of staff, understanding of the current organisation, desire to make it more efficient - is added to by the entrepreneur's capability to not only make the present world better but find a new world that's better still. Also, if the leader behaves in this way, then most of their team will do the same - a positive multiplier effect that can ripple across your organisation inspiring all.   

This more entrepreneurial attitude is not a threat to the organisation's stability, structure or safety if aligned in the right way by top management. If focused on the achievement of the organisation's vision, aligned to key deliverables and underpinned by its values, then it has the capability to transform performance both now and in the future. Some current leaders may not have the capability to take on this more entrepreneurial role but most, if already good leaders, will have. Their personal drive will encourage them to build the skills they need, especially if the organisation supports such development. This is about giving them the tools and information to be more entrepreneurial - it's not a mystical revelation, it's just as much a process that can be learned as many other things. It's about helping them look for the gaps in the system, market or environment and then exploiting them. This should happen at both strategic and operational levels to really make a difference.      

How does HR make this happen? First, by making sure those in HR understand the organisation inside out and what it means to be entrepreneurial. Then by identifying those who demonstrate entrepreneurial skills and seeking out evidence that this makes a real difference to performance - which should be there as a result of their efforts. Then present a credible case to senior management to develop the entrepreneurial behaviour across your leaders at all levels using the input of those who have championed it. It's about creating a set of simple guiding principles for leaders in the organisation that focuses on asking the right questions and working together in partnership with people and which then encourages a mutually-supportive culture that builds up the behaviour you want day by day.

Developing on from a pilot group of key influencers to encompass all leaders in time is vital to making the spirit of the entrepreneur real at all levels, especially at the contact points with customers. This isn't a long or complex process and most organisations can get things moving in just a few months, and the results will impact positively on the bottom line via better performance, new ways of working, technical innovations and better customer service.         

Once you have created a culture across the organisation where entrepreneurial behaviour can flourish, people will take the initiative, give feedback - especially on what customers are saying, look for innovation, find cost efficiencies, seek to increase profit, and look for gaps in the market that might provide new revenue or disrupt competitors. Then you will naturally have a competitive advantage. This behaviour should not be the preserve of just senior management or sales teams as it probably is now  - everyone should be a budding entrepreneur, with HR leading the way. 

Chris Roebuck is visiting professor of transformational leadership at Cass Business School. He was previously global head of talent for UBS.