The new entrepreneur

GUEST COLUMN

Chairman, RPG Group.

The globalisation of markets and competition, the rapid maturation of the information age, the expansion of the service-based economy, the impact of deregulation and privatisation and the explosion of the knowledge revolution are the forces driving companies to fundamentally rethink their business models and radically transform their organisational capabilities.

The implications for organisations and management are profound. Intellectual capital has challenged the top slot occupied by financial capital as the foremost resource for business. Entrepreneurship is at the core of this intellectual capital.

What is an entrepreneur? Is he one who capitalises on opportunities? Is he one who thinks beyond boundaries and challenges the frontiers permitting new possibilities to emerge? Is he one who is a risk-taker? He is all of these and more! Shining examples of entrepreneurs in India are Jamshedji Tata and G.D. Birla. Among present-age entrepreneurs, we have Dhirubhai Ambani who has created a truly world class organisation.

He has totally changed the rules of the corporate game. He created world-sized plants when the thinking was `small and beautiful'. He tapped the capital market and was, in fact, the creator of the equity cult. In the nineties we have Subhash Chandra, who created a strong media empire - Zee. We also have Naresh Goyal, who through good customer service created a great domestic airline.

What was common in all these entrepreneurs? The first thing is that they challenged the status quo. They cut loose and thought out of the box. They had a long-term vision. They were first generation businessmen; they thought big; they were very focused on their end game. They worked hard. They had a passion for their business and, more than that, they had a strong will to succeed.

There was widespread belief in India that the entrepreneurial responsibility for creating new opportunities lies with top management, a belief born out of an earlier era when both government licences and bank finance had indeed to be arranged at the highest level. This resulted in a lack of entrepreneurial spark and individual initiative in the front lines of several companies.

Over the last few years, however, the top business groups in India have increasingly recognised that need for rebuilding initiative in the operating units of their companies and for breeding what they call "the internal entrepreneur". Organisations are moving to flexible structures, often organising teams for a limited time and with clear performance objectives.

Companies that seek performance and growth should give entrepreneurial activity plenty of space and also connect them from the outset to resources, knowledge and goals. It calls for a full range of organisational and leadership interventions: structure, human resources policies and corporate culture.

NEED FOR SPEED

For the new entrepreneur speed is essential. He has less time for analysis. He has to continuously adjust himself according to the changing circumstances. In the new age, what is important is not only the ability to do extraordinary things but it is also important that he does ordinary things extraordinarily well.

For the new entrepreneur, the ability to garner financial resources isn't that important. What is essential is the big idea and its execution. If he has a good concept, money will automatically follow.

Most of the newer opportunities are in the service and technology areas, which require less capital. You can always attract venture capital in these sectors and, moreover, you do not need government patronage. That is why you will hear of new successful entrepreneurs being people like Bill Gates, Michael Dell, and Jerry Yang, all of them young, with new value propositions for the customer - self-made people who are willing to work hard. A talented entrepreneur one may be, but there is no substitute for hard work, discipline and long hours. I recall a friend walking up to the leading Indian singer Lata Mangeshkar, to whom he said, "I would give my life to sing like you".

The nightingale of India replied, "I did". An improved understanding of the role of the New Entrepreneur would hopefully allow us to open our minds to those recesses of management that are not yet adequately explored.

(The article has been excerpted from a speech delivered at the IMD CEO RoundTable in Mumbai on March 18, 2002 It was published in the April 2002 issue of Indian Management)