Bleeding Entrepreneurial Talent: When Big Companies Drive Out the Pioneers
Stephen Parkins
Systematic Innovation & International Expansion ?? Renewable Energy Investments???? I help the ambitious grow into industry leaders | 3x Founder | Former Trader
Brace yourself for some cognitive dissonance.
“We believe in hiring and retaining the most talented professionals” is a boilerplate slogan you might associate with just about any large corporation.
And yet (according to their frenemies at McKinsey) 82% of companies “don’t believe they recruit highly talented people. For those that do, only 7% think they can keep it.”
In other words, there’s no hope. At least not for the vast majority of corporations.?
There’s one (recurring) event in which I always have mixed emotions.
It’s when I see a talented, creative professional quit after one too many bureaucratic disappointments, and they leave their (mostly decent) corporate employer to go join a snazzy startup across the street.
On the one hand: Good for you! Can’t wait to see the impact you’ll make over there.
But on the other hand…
?? Why does this keep happening?
?? Is it inevitable?
?? Are large corporations doomed to keep on losing their most creative people?
The very people who will save them from mediocrity / revitalise their culture / discover their next generation of profitable business models? [insert long-term strategic objective here]
The Corporate Churn Challenge
It’s hopeless to think that any big company can continue to innovate and grow if it’s unable to retain the creators, the builders, the tinkerers and the risk-takers.
Without these innovators and change-makers among its ranks, the company condemns itself to —at best— keeping the status quo alive.
More realistically, it can expect a slow decline into irrelevance.
In large corporations, the greatest entrepreneurial talents, once they’ve run into a few too many rigid hierarchies and snail-paced decision-making processes, tend to walk out the door.
For all their cushy perks, corporate environments typically lack the agility and freedom that innovators thrive on. Leading to frustration.
Flat, regressive compensation packages also drive entrepreneurs elsewhere.
The causes of entrepreneurial Talent Drain - and how to fix it
1. Corporate structures
Entrepreneurial talents flourish in environments where flexibility, open-mindedness and experimentation are given the priority they deserve.
When stuffy corporations force people to send decisions up and down the management pole, this suffocates both creativity and speed.?
Companies need to put more trust in the smart people they employ.
Decision-making needs to move past old-school HiPPO structures (where the Highest-Paid Person’s Opinion prevails).
By adopting more flexible structures and delegating decision-making power (particularly over innovation portfolios) our companies support a culture of innovation in which quick decision-making and agility bear some similarity to those in a well-run startup or VC/PE fund.
Just last week on the Culturedge Podcast,
Sabyasachi Sengupta told us about the issue of entrepreneurial professionals feeling “stuck” and how he helps them become “unstuck”.
Check out how Saby brings “method to the madness" ??
2. Autonomy
For entrepreneurially-minded colleagues, autonomy is not just a benefit — they need it in order to thrive.
The freedom to explore, experiment, make decisions, screw up, and try again, is crucial for their creative process.
When given such autonomy, they feel empowered to take ownership of their projects.
It’s then absolutely possible to keep them engaged and to strengthen their drive to innovate within the corporate framework.
Directly linked to their autonomy is their need for psychological safety . This should be sacred.
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In organisations where ambitious individuals aren’t given a safe environment in which to realise their potential, there’s a real danger of them descending into what Nick Himowicz calls “bullshit behaviours” — as he described in our podcast episode a couple of weeks ago.
3. Compensation
Let’s also not pass over the taboo subject of compensation:
Traditional reward structures simply don’t align with the risk-reward balance that motivates these individuals.
The lack of upside drives them towards more dynamic settings, like founding or joining a startup.
It’s not that entrepreneurs just want more money (as welcome as that might be).
More importantly, their inner sense of justice expects to see a neater symmetry between risk and reward.
In other words, they want skin in the game — along with the associated upside and downside.
“Yeah but this can never work at our company”, you might be thinking.
It’s too easy for companies to hide behind HR policies and say it’s not possible to offer such types of compensation.
Organisations who have the ability and the motivation:
…well, I’m confident they don’t lack the smarts to set up what I would call a “symmetrical” compensation package for their most entrepreneurial innovators.
We explored this very topic a few months ago (in “Peanuts for Profit ”). But in case it was TL and you DR, companies who want to incentivise their innovators to stick around for the long haul need to:
?? Introduce a clear bonus structure, based on metrics that are tied directly to both inputs and outputs of the company’s innovation portfolio.
??Offer stock options or shares of the company, aligning the intrapreneur’s personal success with the long-term prosperity of the company
Conclusion
I think the wake-up call that many companies need —urgently— is to recognise that intrapreneurs and innovators are not just employees; they are the leading indicators of creativity and progress.?
They hold the key to opening up new markets, rejuvenating stagnant cultures, and demonstrating future-focused leadership.
As leaders in the corporate world, it's our responsibility to create environments where these bright minds are able to thrive.
This is a cultural evolution —not necessarily an overnight transformation— that requires breaking the shackles of industrial-era hierarchies, enabling true autonomy, and creating reward systems that resonate with a more symmetrical risk-reward mindset.
(If you yourself are feeling “stuck” in a corporate dead end, or your team could do with some coaching around “bullshit behaviours” — consider reaching out to Sabyasachi Sengupta or Nick Himowicz .)
Let's not watch our most innovative thinkers and doers walk away.
When we stop bleeding entrepreneurial talent, we don't just retain competent individuals; we secure ourselves a chance to continue playing in the big leagues for years to come.
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Happy reading and listening over lunch,
Stephen
Innovation Silverback │ Crafting innovation strategies for Europe's current and future market leaders.
10 个月To your point, the going is getting tougher lately for these structures -> https://www.icopilots.com/alphabet-is-disenvesting-from-x/
Business Model Coach → I help SaaS startup founders achieve business-model-fit
10 个月Three important points for companies who want to take innovation seriously. Thank you for sharing and for including me in the conversation Stephen.