Dotcomming it: what are entrepreneurs looking for?

Graduates’ attraction to dotcoms is as much to do with the freedom and scope that the new economy offers, as it is to do with making money quickly. So, how can the big companies make their corporate cultures more attractive to budding entrepreneurs? Tony Vickers, an expert in organizational behavior, assesses which cultures attract entrepreneurs and which are turn-offs

Young graduates, established professionals, seasoned and experienced executives alike are increasingly shunning large corporate environments. Instead, they are joining Internet start-up ventures, setting up their own enterprises or moving into small and medium-sized enterprises (SMEs).

As the dotcom revolution gathers pace, these highly competent and productive entrepreneurs are increasingly on the move. The decline of corporate loyalty means they are far less attached to any one organization. Instead, poaching, defections, team departures, inducements and golden hellos are now commonplace.

One reason behind this increased entrepreneurial mobility is the emergence of more flexible Labour markets due to advances in information and communication technology, and changing attitudes to reward and risk-taking.

However, a deeper issue is also emerging. Research suggests that entrepreneurial talent is also looking for a distinct kind of organizational culture. Checking out the culture of an organization is now a vital part of the background research ambitious entrepreneurs do because for them, joining a staid, low performance culture that stifles initiative and rewards conformity can be a career disaster.

Entrepreneurs seek out innovation and actionTwo cultures that entrepreneurs actively seek out are innovation and action cultures. Innovation cultures are highly growth-oriented and market responsive. They operate in turbulent and fast-moving environments. Above all, they change rapidly with the market place. The entrepreneur and risk taker is the role model in these cultures.

Innovation cultures have an atmosphere of excitement, participation and motivation -alongside chaos and arrogance. Pay and promotion are linked to successful innovation. New product development, sales and account development are the driving forces. Face-to-face communication is a strong feature. There is no nine-to-five work mentality and staff turnover is often high.

Entrepreneurs are also attracted to action cultures. In these cultures, the strong survive and the weak perish. A high value is placed on drive, energy, commercial success and hard work. These are results driven workplaces, which typically operate in fiercely competitive markets. They have a top-down style of management and set clear goals. High achievers are rewarded and promoted. Mistakes which affect the bottom line are punishable.

Organizations with action cultures are often sweatshops where the pervading atmosphere is busy. Those who do not have drive, energy and ambition do not last long. The trappings of cars, furnishings and gadgetry are also strongly evident.

So, what is organizational culture?

A simple definition of organizational culture is ‘the way we do things round here’. This can be the organization’s basic philosophy, spirit and drive, its customary and traditional ways of doing things – some of which are visible and some unconscious.

The culture of an organization is also its essential character and identity that in turn influence the thoughts, feelings and behavior of its members. This can involve a common purpose and special values such as trust, respect and self-responsibility.

Culture is often seen as the social glue that holds an organization together. Members share a unique and common psychology. It is about atmosphere, conveyed through the feelings, attitudes and beliefs of an organization’s members.

Culture is like a process of social fermentation that builds attitudes and behaviors. These, in turn, create strong identities and values. Culture is about emotion rather than rationality. It involves rites, rituals, stories, ceremonies and symbols shared by members of the organization.

There is no such thing as a correct or ideal culture. In large organizations competing cultures and sub cultures often coexist. Above all, culture is always undergoing some form of change, especially when firms refocus or switch direction and identity. Invariably, as firms devise corporate strategies for the Internet age, their existing cultures will undergo major changes.

What are entrepreneurs looking for?

Essentially, entrepreneurs seek cultures whose values are similar to their own. MBAs, for example, relish cultures that reward individual contribution to profits and production. They are far less attracted to cultures that stress seniority, equality and loyalty.

Image is often the key to attracting and retaining entrepreneurs, who prefer firms whose positive image matches their own. Where the fit between personal and cultural image is good, the results can be quite outstanding – higher job satisfaction, greater commitment to stay and contribute, as well as enhanced performance. Not surprisingly, cultures that highlight interpersonal relations tend to keep high performing entrepreneurs twice as long as those that are highly task-oriented.

What cultures are turn-offs for entrepreneurs?

Unfortunately for the entrepreneur, many large corporate bureaucracies have cultures that stifle initiative, creativity and entrepreneurship. There are two particular types of culture that do little to entice or retain the entrepreneur: the control culture and the harmony culture.

The control culture is essentially bureaucratic and promotion is invariably from within. There is a clear hierarchy and formal channels of communication. People in control cultures may feel secure, but they are often stifled.

Risk-taking is frowned on. Hierarchy, rules and consistency are strongly reinforced. Policies and procedures are strongly policed. Cost controls and detailed accounting systems go hand-in-hand with a ‘steady as she goes’ approach.

Loyalty is rewarded, jobs are well defined, and there is a heavy investment in training and development. History and past success are often proudly displayed and preserved. There is little scope for innovation and inventiveness. Control cultures are essentially conservative and blind to rapid changes in their environment.

The other turn-off is the harmony culture. They are easily recognized by their emphasis on vision statements – the ‘our people are paramount’ idea. Strategic decisions here are molded by cultural values.

There is a strong consensus atmosphere linked to teams and committees. Reliability, quality and customer relationships are proudly trumpeted. Loyalty and service are well rewarded. The human resources management element is strong. Communication is open and formal meetings, appraisals and regular training are all important. Strategic alliances with suppliers are the vogue.

This culture is often slow to respond and may be blinkered when it comes to innovation and creativity. It is not the culture for entrepreneurs who value self-expression and independence.

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