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Q. If there is such a thing as a good problem to have in business, it is the issue Dunnhumby faces maintaining its entrepreneurial edge as the company's growth rockets ahead. It is an all too common problem, according to David Molian, co-director of Credo, Cranfield Management School's centre for small business growth and development.
A. If there is such a thing as a good problem to have in business, it is the issue Dunnhumby faces maintaining its entrepreneurial edge as the company's growth rockets ahead.
It is an all too common problem, according to David Molian, co-director of Credo, Cranfield Management School's centre for small business growth and development.
"Inevitably businesses become more process-driven and more formal. But all these changes undermine their entrepreneurial DNA," he says.
Good internal communications are vital if a business is to retain its intimacy and therefore its entrepreneurial spark, Mr Molian explains. "People need to feel part of a shared body."
The Virgin Group has been good at this, enabling different business units to cross-fertilise ideas, according to Mr Molian.
Good business owners also constantly remind the people in the organisation of the values of the company and why they are important, Mr Molian says.
"Probably once a month they should be spending a week just visiting all the different parts of the business and giving that message."
Business founders should remember that they are the role models for the business, Mr Molian says.
"The strongest way to create a certain kind of culture is through leading by example.
"It does not have to be one person doing this, but they need to be restating a number of the company values."
Size is also important. Mike Southon, a serial entrepreneur and co-author of The Beermat Entrepreneur, a simple guide to creating strong start-ups, believes that companies ideally should be broken down into "small tribes" of 20 to 25 people.
"If business units grow to more than 150 people you have had it," Mr Southon adds.
"The clever CEO keeps units down to small sizes and tries to make sense of the whole thing."
The enemies of enterprise in a large organisation are the middle management, Mr Southon notes.
Once these people gain a foothold it can be hard to recreate the entrepreneurial spark, according to Mr Southon. But he adds that it can be done if the company head can prove to the workforce that their ideas can be turned into action.
Mr Southon suggests running a workshop where the managing director asks employees to challenge anything about the way the business operates.
The suggestions are then judged on the spot, awarding bronze for those that cannot work, silver if the idea is good but needs a little tweaking and gold if it can be put into action immediately. The key is then to act on the golden suggestions.
"Here is where it gets interesting," Mr Southon says. "Is the business able to permit the person to do it and will the person take the leadership on and do it themselves?
"If they do, suddenly there is a bond between the employee and the business."
Article by Jonathan Moules
First published in the Financial Times: 18th November 2005