After freelancing during his studies, Claas Kauenhowen already knew that the corporate world wasn’t for him: “I felt limited from the second I walked in by the fact that every idea was being put down simply for the sake of not changing anything, not improving anything, but keeping things stable.” This hasn’t however, prevented him from becoming an expert in how corporates think. As an entrepreneur-turned-coach, Claas now guides people toward changing their companies for the better: helping them to develop a vision with an entrepreneurial mindset and employee empowerment at its core. We sat down with Claas to talk about what corporations stand to learn from startups, and what corporate executives can learn from entrepreneurs.
You might be asking yourself, “So, what exactly is a corporate mindset?” Claas offers this definition: “It’s basically the outlook of a person who focuses on his or her job and department and limits themselves to that, creating an internal network.” For Claas, corporations are complex networks enmeshed in power struggles that not only foster an ‘informal alliance’ attitude among employees, but can lead to a sense of apathy in workers who don’t feel a sense of belonging within the organization.
An entrepreneurial mindset, on the other hand, is characterized by a sense of possibility. “An entrepreneur works from his heart,” says Claas. “They have a vision; they seek to change something. Entrepreneurs are risk-takers, innovators, changemakers. As an entrepreneur, you’re standing in the line of fire every day.” Claas explains that entrepreneurs are also inventive problem-solvers, excellent multitaskers, and are driven by a ‘survival instinct’ that allows them to thrive. This attitude is most commonly found in the startup community, where risk-taking and invention are just another day at the office. Because resources are limited, employees at startups are empowered to take charge of projects, leading to exciting new innovations and a motivated staff emboldened to take charge. Additionally, a startup is constantly validating their product, testing new approaches, whereas corporates who may have been on the market for decades struggle to identify if their product still has value or a possible evolution.
Startups also have to allow room for mistakes, whereas corporations frown on errors: “In corporations, you don’t want to make mistakes for fear of consequences. And if you do make mistakes, they aren’t used as a collective teaching moment for the company,” says Claas. “And entrepreneurs and startups grow day by day from making mistakes. That’s how they validate what they’re doing. How can you be innovative when you can’t make mistakes?”
But surely corporations have some advantages? Of course, Claas concedes, they have market experience, experience working with budgets; they know the rules. Additionally, he concludes, employees in corporations face extreme pressure: “In corporations goals are set by the department heads or management, and if the team doesn’t meet them, there are consequences.” This drive to maintain their market share at all costs, however, is coupled with a growing awareness that industries are evolving fast, and that it’s time they catch up. The innovation in the startup community has got lots of companies reevaluating their processes, especially in a fast-changing world where competition is high. Some corporations have taken to buying startups who threaten to destroy their business models, while others are seeking them out to gain new insights. “Corporates know that their industries are changing, that their market lead isn’t as safe as it once was, and they have the sense that these trends are more than just a tech booms. I think the biggest challenge for them is to open up to that. Not only do they need to improve, but there needs to be a radical shift in culture, a true transformation. Often, internal initiatives are started but not followed through on.”
This isn’t to suggest that corporations downsize and start behaving exactly like startups. What Claas is hinting at is rather a shift in company culture that allows room for an entrepreneurial spirit to thrive: “Ideally this would start with the board of directors in the corporation. Focusing only on the technology found in the startup world is a mistake. The transformation of the corporation itself is the key. That companies see that startups are tapping into something is great, but they should also take what they’ve learned in the startup world (having a driving vision, the collective spirit of the employees) and apply it to their companies. Start-ups are unique in that they make use of the full spectrum of employees’ talents. Corporations should focus on that.”
What this approach would likely reveal is that corporations already have a staff full of entrepreneurs eager to propel the company towards innovation. “Everyone working in a corporation has or could have an entrepreneurial mindset. The question is, does the company provide the context for the employees to allow themselves to express it. Usually in a corporation there is a control mechanism in place — maybe goals, maybe how reports are done, there is a certain structure that is limiting them. It’s a catch 22 with companies, they want innovation, but they don’t offer the fertile ground for it.”
“The leading players in a corporation have to initiate and fully support an entrepreneurial spirit in the corporation itself. This means relinquishing control, it means allowing more freedom, letting go of structures and not necessarily initiating new ones but finding new ways of cooperating within the corporation itself, fostering a more dynamic way of working.” Claas is convinced that, in addition to an improvement in morale, this approach would inevitably lead to increased revenue. “Profit doesn’t come from pressure. Profit comes from opportunity and possibility. This is why you want entrepreneurs in your company.”
“I see this as an invitation for the corporate world to really open up to the possibilities,” Claas says. He envisions a corporate environment transformed by the people working in it, who are empowered to express their ideas and take ownership of their projects. This, according to Claas, is the real key to a thriving organization: “Imagine your corporation as a place where every one of your employees is using all their talents and working directly from their hearts. Then, as long as you are doing something excellent and the market is there, you will have success. It’s inevitable.”
Thanks, Claas, for that inspiring chat! Claas works with Innential to helps companies bring innovation to their teams. To find out more, visit innential.com today!