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SHOBERT: Who's your in-house entrepreneur?

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Benjamin A. ShobertComing to terms with the economic events of the last two years has not been easy. For most businesses, the good news is, in 2009 they found a new center of gravity where they can profitably manage their business. This is no small accomplishment, considering how many head-count reductions and how much idled capacity it took.

But with this stabilization comes a dawning realization, a looming question: where to go now? Many of us share a fear that the next decade will be characterized by a stagnant domestic economy. Sometime between year end and now, your senior managers may have gotten together and begun wrestling with this very realization.

Times like this are ripe for pioneering activities. Now that your business knows it can operate profitably even in a down economy—no small thing—the next question is what you need to be doing to grow.

But businesses wrestle with having this conversation internally, in large part because the administrative skill sets that were so critical to growing profitably and satisfying the needs of existing customers are typically not well-suited to this new challenge. The foraging and exploration by companies who find entirely new markets, develop new technologies, and get serious about selling into international markets often require new competencies.

During the dot-com 1990s, it was common for startups to have what they called an “entrepreneur in residence,” a resource for the team whose role was to find entirely new homes for their technology. What was once a luxury may now be a necessity, and it begs the question: Who’s your in-house entrepreneur? Many businesses have clearly defined roles staffed with personnel that may seem to bleed over into this, people who manage R&D, product managers and the like. But what business needs is to go back to our roots, to draw upon dormant entrepreneurial energy.

To do this we need to find and empower individuals whose job is to wander and wonder, to explore and strategize. Such a message might seem most sensible for high-technology industries, but this sort of in-house entrepreneurship can be practiced by the most traditional of industries.

Here’s the thing: Without realizing it, or without being able to describe it as having an “in-house entrepreneur,” companies in emerging economies like Brazil, China and India practice this every day. Many are run by founders, so thinking like an entrepreneur comes easily. They do not mind the chaos that tends to characterize their cities, or the fractured distribution channels across their country: They have an innate ability to adapt and overcome these. But many also rub shoulders with large social problems. Their response is to see these as business opportunities, problems that can be solved with the right combination of innovation and engineering.

Over the last several years, in particular as our own economy has slowed, it has become increasingly common to hear people express concerns over jobs lost and factories shipped overseas. While these are all important questions, perhaps they overlook a more significant concern: Have we exported our entrepreneurial capacity? Have we become so focused on product-line extensions and incremental features and benefits that we have forgotten how to engage in pure missionary activity?

If we have, maybe now is a good time to revisit this and ask, “Who’s my in-house entrepreneur?”•

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Shobert is managing director of Teleos Inc., a local firm specializing in taking products and technologies to market.

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    Benjamin, this is a good article, and surprisingly it places you in good company. Peter Drucker voiced the same ideas sometime ago with respect to entrepreneurism being part of the growth pattern of successful companies. Where he took it a bit further was to stipulate that if entrepreneurism was to find a safe place in companies as it has in Proctor&Gamble, Johnson&Johnson, and 3M, it requires setting it up as a separate operation that it not under the control of a person who is also charged with managing the company's existing business. The reasons for not so doing were common sense: the manager's focus would be on preserving business that produces revenue, not on developing a future business that currently only absorbs resources.

    I have often felt that what is needed is a separate branch of the management consulting industry that assists companies in setting up entrepreneurial environments within established businesses and shows them how to think, act, and work like entrepreneurs. Setting the right priorities for companies that want to innovate and not just to extend their existing products is hard for the management of most established, mature companies because they have long forgotten or worse, never had the experience of being part of a start-up that has succeeded.

    Most of my work has been assisting companies to see the whole solution to management problems and not just providing them with technical solutions to tiny pieces of the whole problematic puzzle. It has resulted in enormous cost savings and greater productivity for those that have agreed to do it. For those that have turned down such offers, they have largely muddled along, never achieving the efficiency and dynamism that they could have had if they would have been willing to face problems honestly and systemically.

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