FishMost organizations see themselves as they would like to be not necessarily how they are. When it comes to corporate entrepreneurship – an organizations perception is often far from reality.

Organizations from over 27 countries have taken the Entrepreneurial Audit – Self Assessment to find out if their organizations are entrepreneurial or just think they are. The reality is that only 40% of these organizations were entrepreneurial.

A majority of organizations (63%) felt they had a distinct and compelling growth strategy but the resources, funding and metrics needed to support that strategy were not in place. Only 37% of organizations provided the resources and funds for new growth projects. While less than half of the organizations aligned their strategy with the metrics needed to drive business growth.

Strategy and metrics are like bookends. They set the boundaries for what is expected. If they are out of alignment they are open to interpretation and can create roadblocks.

Most organizations continue to use traditional financial metrics to measure success. Few organizations “measure long-term, less precise and therefore more conceptual goals, with less understood organizational roles and responsibilities for achieving them,” according to the article Measuring the Performance of Corporate Innovation Initiatives.

Not surprisingly only 60% of organizations stated they were happy with the return they were getting on their innovation investments. The reality is that misaligned metrics are impacting growth.

The data from the entrepreneurial audit also revealed a number of constraints that impacted the level of entrepreneurship in an organization. Foremost among them was the fact that a half of the organizations did not have a culture that promoted entrepreneurship, learning and growth.

  • Only 35% of organizations encourage entrepreneurial behavior.
  • Only 42% give employees extra time to pursue short and longer term ideas.
  • Only 44% provide the decision making latitude, freedom and authority to test new ideas.
  • Only 44% say their managers are willing to take bold actions to achieve objectives.
  • Only 47% clearly define employee roles, set expectations and align performance metrics.

All of these are key ingredients that support entrepreneurial thinking and action. According to Wolcott and Lippitz authors of Grow from Within, “The most often mentioned elements shaping innovation in companies were the constraints and gaps derived from factors internal to the company.” These constraints can impact the development of corporate entrepreneurship.

The good news is that a majority of organizations stated they understood the obstacles and hidden barriers that were impeding their growth. Seventy percent of the organizations reported that they knew what steps they needed to take to increase their success rate. Sixty-five percent stated that they had the right skills and capabilities to develop new growth businesses.

Most interesting was the fact that there was a clear distinction between perception and reality at the strategic, operational and individual level. The perception at the top is that there is a distinct growth strategy with clear objectives that support entrepreneurship. The reality at the operational level is that even with clear objectives, managers are reluctant to take risks and make bold and wide ranging decisions. At the individual level the reality is that employees are not given the tools and decision making authority they need to develop and test their ideas.

Perception and reality are at odds when it comes to corporate entrepreneurship.

Being entrepreneurial takes more than strategic alignment it requires having the right people, processes and culture to support it. The Entrepreneurial Audit – Self Assessment provides a quick snapshot of an organizations entrepreneurial orientation. It is grounded in research that has shown that organizations that score high on these measures are more entrepreneurial and out perform their peers.

Is corporate entrepreneurship a perception or a reality in your organization? Take the Entrepreneurial Audit – Self Assessment and see for yourself. It’s Free.

Periodically we will update these results and share with you the changing face of corporate entrepreneurship around the world.

Thanks to all the organizations that have participated so far.

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