According to these authors, not much, at least not single-handedly:
Nor is there much a CEO could do to offset the effects of a deep recession, he adds, other than respect the study’s unhappy conclusion: Barring surprises, deep recessions are likely to be followed by torturously slow recoveries. “If we’ve had a very bad initial shock, [that can lead to] a long recession.”
A counsel of, if not despair, little comfort.
As I’m constitutionally incapable of taking that for a final answer, let me offer another bit of Wharton learning with the somewhat more promising title, “How to Solve the Jobs Dilemma: Attract and Retain More Entrepreneurs.”
Loyal readers will immediately recognize that if I’m proposing that lawyers suddenly embrace their inner entrepreneur, I’ve written with conviction that there is no such thing: “Entrepreneurial?” Really? My point was that individuals working in the safe and sheltered confines of a profitable and successful ongoing business, whose income-not to mention their homes and 401(k)’s-doesn’t turn on the success of the venture they’re proposing, cannot seriously be called “entrepreneurs.”
No, I’m trying to suggest something a bit different.
The Wharton article I cited talks about employees (think: lawyers) within the firm who are thinking about other ways of doing things. People, that is, who have ideas. And if your lawyers constitute an idea-free wasteland, you have other problems.
Studies show that entrepreneurs within companies are significantly more likely to be on the lookout for new growth opportunities than managers, making them more likely to recognize opportunities. If growth and innovation are an important part of your corporate strategy, you want to attract and retain these employees with entrepreneurial mindsets.
If you are to have any hope of encouraging these aspirations and capturing some part of the value within your own firm, the first decision you have to make is not to judge their proposals on the traditional management metrics, which our Wharton friends summarize as whether the skunkworks:
- Makes measurable financial gains
- Makes the company more cost efficient
- Improves the company’s status as an industry leader.
But industry-shaping ideas rarely show signs of being able to meet these measures early on. Innovative plans are usually ripe with option-value. They are moves that “buy” you an option to potentially do something valuable in the future, but whose value cannot be accurately predicted in their early stages.
One trick that successful large-company entrepreneurs use is to focus their business cases on elements of an idea that address immediate threats. [emphasis supplied]
You need to recognize that new ventures always begin in a phase of uncertainty, when the effort put in far exceeds the results coming out. Give it room to breathe: See how it’s doing first on market adoption, only then on revenue, and only finally, after time, on profits.
Ask yourself these things:
- Is the “growth” environment flat? (Check)
- Are we unwilling to commit to conventional growth/investment initiatives so long as nobody else is doing so? (95% odds of “check.”)
- Are we facing threats that didn’t exist before? (If you don’t answer “check” here, you may as well stop reading right now.)
- Is it possible people at the front lines, interacting with clients and markets all day long, might have given some creative thought to these realities? (I certainly hope so, for you and your firm’s sake.)
Then your course is straightforward:
- Support them; let them know their ideas matter to you.
- Give them sufficient freedom to pursue their ideas, even while not abandoning everyday business exigencies.
- Don’t commit infanticide by imposing the wrong (mature-business) metrics.
I told you I can’t take a counsel of paralysis as the end of the story.
Neither, I pray, should you.