Guiding leaders to greatness

Operational agility Organisational design Strategy Working practices

Three Simple Hacks to Underpin an Entrepreneurial Culture

We all need better ways to deal with change. In times of disruption, organisations should focus on creating a culture where change equals opportunity. Operating metaphors, inverted organisation charts and weekly experiments could be the key to creating this culture.

01 October 2020 • 5 min read

Photograph: Mika Korhonen/Unsplash

What does being entrepreneurial mean to you as a business, and why do you want to foster this type of behaviour?  Is it because everything keeps changing and you need your people, and your business, to see positive opportunity in change, rather than negative disruption?

Let’s assume yes.

So then, what attributes make for a successful entrepreneur?  My theory is that it’s the ability to:

  1. Sense change early

  2. Analyse change effectively

  3. Act on change quickly

 At the scale of the lonesome entrepreneur or the small business, these three steps benefit from short ‘neural’ pathways that link the sensing, processing and acting responses.  In a larger organisation these pathways tend to be elongated and convoluted.  Subtle market shifts may go under-reported, decisions might be based on outdated insight, service change can be sluggish or, when it’s late in the day, rushed.

Inevitably, the lion’s share of focus and investment goes towards technology.  In a digital-first world, this is understandable.  More often than not though, the human component of the change challenge is parked for later.

To address this change challenge, most pre-digital businesses have ‘agility’ as a central theme of their transformation strategies.  Inevitably, the lion’s share of focus and investment goes towards technology.  In a digital-first world, where the ability to develop and deploy code quickly is a fundamental of survival, this is understandable.  More often than not though, the human component of the change challenge is parked for later, under-funded or ‘covered’ by the box labelled ‘culture’.

If culture is the sum of beliefs and behaviours, and the context is one of continual change, then aspiring to an entrepreneurial culture makes sense; a culture where change equals opportunity if you’re able to sense, analyse and act quickly.

But how do organisations grow this attitude, and enable it to function?

1. Test your operating metaphor

Humans use stories to understand complex things, and one of the most powerful storytelling devices is the metaphor.  Back in 1986, Gareth Morgan, professor of organisational behaviour and industrial relations at the Schulich School of Business at York University in Toronto, published ‘Images of organisation’ in which he describes eight organisational metaphors: machine, organism, brain, cultural system, political system, psychic prison, instrument of domination, and flux and transformation.

While psychic prison and instrument of domination may sound a bit alarming, the other metaphors are quite common, although they usually appear in different contexts.  Many businesses aspire to a machine-like code factory, that emphasises repeatable processes that drive efficient output.  Likewise the brain metaphor is captured in the idea of the learning organisation, which emphasises feedback loops and continuous improvement.

If culture is the sum of beliefs and behaviours, and the context is one of continual change, then aspiring to an entrepreneurial culture makes sense; a culture where change equals opportunity if you’re able to sense, analyse and act quickly.

In the context of continual change, the flux and transformation metaphor, which emphasises that an organisation is an ever-changing system indivisible from its environment, is perhaps the most timely model to contemplate.

Morgan’s eight metaphors were developed in the 1980s; suffice it to say the world looks a bit different today.  His message, however, is entirely relevant: metaphor provides a powerful way to view an organisation.  They can be used to build a shared vision – a critical component of successful transformation – but they can also inhibit new perspectives where an entrenched view obscures new possibilities.

The exercise of testing your operating metaphor, or defining a new one, becomes a powerful way to uncover competing and supporting systems of behaviour that support or erode entrepreneurial culture.

2. Flip your organisation chart

In the age of 100% connectivity, virtual teams, the gig economy and mushrooming start-ups, traditional organisations (by which I mean anything that predated e-commerce) may have looked at new-age structures like flatarchies, holacracy or humanocracy with bemusement.  Yet today in software circles, the concept of self-organising teams is common, while just a few months ago 100% remote working was treated with scepticism.

What does this have to do with organisation charts?

The reason ‘innovative’ companies experiment with different types of structures is that they, for the most part, are trying to reduce the time it takes to sense, interpret and act.  Organisation structure is a key element in ownership of a problem, how decisions get made, how people get rewarded, in how risk is managed, and in how businesses communicate internally.

If structure supports behaviour, then flatter structures are more likely to support entrepreneurial culture.  This is because flatter structures effectively shorten feedback loops with the side effect of empowering teams to act, rather than pass messages up a hierarchical chain.

To borrow from Morgan’s ‘brain’ and ‘organism’ operating metaphors, feedback loops are like neural pathways in the body.  The shorter they are, the faster messages can move, and the more perceptive and responsive you can be.  As evolution has taught us, the ability to move quickly when it counts is a competitive advantage!

If structure supports behaviour, then flatter structures are more likely to support entrepreneurial culture.  This is because flatter structures effectively shorten feedback loops with the side effect of empowering teams to act, rather than pass messages up a hierarchical chain.

It’s why Elon Musk’s steer at Tesla is “anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company.”

It’s also why Gary Hamel, visiting professor of Strategic and International Management at London Business School, and the world’s most influential business thinker (according to the Wall Street Journal) says things like “management is the least efficient activity in your organisation”.

His research suggests that the average ratio of “bureaucrats to support staff is about 1 to 4.7”, and to paraphrase his wider discourse: if we found a way to make middle managers more productive, “it would raise economic output in OECD countries by around $9 trillion.”  That’s a big number.

Re-engineering your organisation structure to shorten feedback loops, remove middle management and empower teams may be a seismic change.  Going from traditional hierarchy to a Zappos-like holacracy overnight – where there are no assigned roles and employees have the flexibility to take on various tasks and move between teams freely – is not to be embarked on without due caution.

However, there are plenty of ways to nudge an organisation in this direction.  A simple but powerful hack that is easy to implement, and costs you nothing, is to flip your organisation chart.

Very simply, when describing team structures, invert the usual top-down hierarchy to show managers or leaders as supporting teams, rather than the other way around.

It’s a small change with a big message: you, the team, are the business; you are supported, and what you do is valued.

3. Add ‘experiment’ to role descriptions

Successful entrepreneurs know how to experiment.  So should your teams.  The trouble is that fear of failure, or looking foolish, inhibits many personality types from going beyond what they know they can safely do.  For all the talk of failing fast being okay, in many organisations the culture doesn’t sufficiently reinforce the message.

So here’s a small change that can create psychological safety: add ‘experiment’ to a job description.

In a world of constant change you could argue that everything becomes an experiment.  But by actually calling this out, and asking people to think about their work as a set of experiments, you can drive beneficial side effects.

An experiment implies the outcome is not certain.  This allows for an alternative outcome to be seen as insight rather than failure.

An experiment also implies measurement.  This bakes in feedback loops and the notion of continuous learning as how work gets done.  Experiment also means, or at least it should mean, a level of controlled environment where risk is accepted and designed for.

An experiment implies the outcome is not certain.  This allows for an alternative outcome to be seen as insight rather than failure.

To take it one step further, set experiment objectives for your teams.  Run a monthly or weekly experiment.  State a hypothesis, define an execution and measurement method, and discuss the results as a group.  Start small and do it regularly.

How many job descriptions ask people to experiment as part of their day jobs?  As a C-suite executive, how could you experiment more in your job, irrespective of your role?  How would you set up your experiment and what would you test?  And what message would this send to the people around you?

Maybe it’s time the C-suite all became CXOs – chief experiment officers.

Operational agility Organisational design Strategy Working practices

Discover more in

Organisational design