#562       Innovative Leader     Volume 11, Number 10        October 2002

The Spirit of Entrepreneurship
by Colin Turner, Ph.D.

Professor Turner is Director of Entrepreneurial Leadership at the Theseus International Management Institute (www.colinturner.com).  He is author of Lead to Succeed: Creating Entrepreneurial Organizations  (Texere, New York, 2002). 

Why are we in business?  What are the reasons organizations are founded?  Which motivations cause some to become great while others less so?  How is it that some are successful despite poor planning, when others with good strategy are mediocre?

Irrespective of whether we are aware of it, all of us share a primary yearning to know that we count for something.  Each of us has a need to feel part of a worthwhile cause, to have a sense of purpose that gives our life and what we do meaning.  When life lacks meaning, or direction, our frustrations drive us more that our aspirations are able to motivate us.  We may recognize the importance of knowing what our core values and beliefs are.  But do we really live by them?  Are we too busy making the right moves to be guided by what motivates us?

What are organizations?  They start out as legal documents.  What makes them live and breathe are the people who first create them.  Such people are not necessarily born leaders; have had great ideas; want to empire build; or make a fortune.  They are ordinary people that are motivated by a purpose. 

What makes an organization grow is when it adheres to the original philosophy that lies behind its fundamental reason for existence.  If follows that the purpose of an organization is to realize its potential.  And the realizing of its potential lies in the strength of its purpose.  Though strategies may adapt accordingly with evolving market conditions, when purpose and core values prevail, the organization remains a great place to work and something people are proud to be a part of.

This may sound ideological, yet it is exactly how the lasting and really successful organizations of the past were built.  If we take the view that the best motive for growing an organization is to develop what it stands for, it changes our perspective on why we are in business and why we have organizations.

Why Entrepreneurial Organizations?

I have chosen the titles of warriors and worriers to make the distinction between the entrepreneurial-minded and the non-entrepreneurial-minded organization.  Because it is ultimately people’s beliefs, characteristics and thinking that make the difference in an organizational culture.  How they think and act reflects the organization.

“The purpose of an organization is to benefit people and improve society,” said an unwell, uneducated, unknown and unlikely warrior who created the world’s biggest organization, helped his country’s economic prosperity, started management practices now embraced by global organizations, donated huge fortunes to worthy causes, and served hundreds of millions of customers with innovative products that improved the quality of life.  This manager, Konosuke Matsushita, had a short and simple message to his organization, “Think like an entrepreneur, not a hired hand.” 

Matsushita, as an entrepreneur, believed that the mission of management lay in satisfying human instinct for improving the quality of life.  Founding household names including Panasonic, Technics and National, the Matsushita Electric organization of Japan created an entrepreneurial climate that was conducive to seeking opportunity, advancing innovation, developing leadership and giving service. 

Strength of Purpose

Similar to other great success stories that dramatically influenced the 20th century such as Ford, Citicorp, Sony and Pfizer, to name a few from different industries, none achieved success in a continuously upward direction.  All experienced peaks and troughs.  It was the volatile early part of that century that honed the entrepreneurial climate and characteristics that made them winning organizations.  With the continuing economic globalization, emerging competitive markets and increasing customer expectations, the next few decades will be no less volatile, though with different conditions and challenges.  To ignore such a view is tantamount to a refusal to acknowledge the fact that history repeats itself.  In the speed of thought economy over the next 50 years, customer is king and best practice will be measured by deed, not word. 

Those organizations that do not move with agility will fall over themselves.  The leaders who do not develop others will have no followers.  The leaders who do not develop  others will have no followers.  The executive who does not think like an entrepreneur will lose.  The real winners will serve their businesses, clients, customers and communities while living the core values of the organization that they have chosen to be part of. Like the warriors of economic history, he or she will be willing to fight for a worthwhile purpose greater than themselves.

Credo and Spirit Versus Re-Engineering

Business is, and will remain, the great modern arena for individuals to express their vocation and develop their potential.  Strengths and talents will always be best cultivated in the framework of a worthwhile organizational purpose.  Ideally, when a company starts out it focuses on what it’s about, where it wants to go, how will it get there and what it needs to do so.  It utilizes its strengths and talents to grow without concern about competition.

Clearly, this ideal scenario is not always the case.  J. Willard Marriott did not set out to go into the hotel business.  He had a desire to go into business but as to which type he had no idea.  Messrs. Hewlett and Packard started a company the purpose of which was to develop anything that people would buy, even an electric shock machine to induce weight loss.  The founder of Nordstrom started a shoe shop for something to do. 

Today, even though their founders are no longer around, these organizations lead their industries.  Critically, however, all three have core ideologies that are set in stone.  Would the companies be where they are without the evolution of a credo to guide them?  Maybe.  Certainly they would not have developed the heights of influence that they did.  But, more importantly, would they have ever come into being without the spirit of entrepreneurship?  The answer is no.  Ask yourself.  Would any of the organizations that you have been involved with have come to life without the existence, or influence of, an entrepreneurial spirit?

Such spirit, or courage when coupled together with a credo, or raison d’etre, seems to be the vital ingredient that is fundamental to building great organizations, partnerships and institutions that last.  The reality, however, for most established organizations is that such spirit or credo is ignored particularly when times are good.  An impending crisis may cause a revisit to them, in the same way that all of us silently call for guidance when our world seems to be falling in, but usually crises are passed to legal departments.

When Perrier’s bottled water was tampered with, they did not take the same action that the medical organization Johnson & Johnson took when they met with a similar crisis.  Guided by their ‘set in stone credo,” that begins with: “our first responsibility is to the doctors, nurses, hospitals, mothers and all others who use our products” immediately they knew of the threat that cyanide had been introduced to one of their products, Tylenol, Johnson & Johnson responded decisively.  The threat seemed isolated to one city; however, since the product was available throughout the U.S., they removed all of it, at an estimated cost of $100 million.  At the same time, they mounted a mammoth communication program to advice the public.  Public confidence in Johnson & Johnson never even faltered; moreover, it was strengthened as the public viewed the organization as one that always protected them, regardless of cost.

Where Johnson & Johnson clearly responded, Perrier reacted.  Though the threat related to a foreign body in the bottle that could induce cancer, Perrier appeared to the public to be playing down the seriousness of it.  The public was told that even if you consumed an enormous amount of their product you would still be safe.  The organization withdrew the bottles from the affected areas and mounted a huge advertising campaign to indicate that Perrier was good for you.  This did not bring back public confidence in the measure that was hoped for, and many competing brands benefited. When it comes to anything life threatening, customers don’t want words, they want action.  Johnson & Johnson’s credo led to the appropriate action, an example of the power of the entrepreneurial spirit.

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