A friend of mine posted a Facebook entry saying his 30,000+ person company is encouraging people to be entrepreneurial. I replied with a remark that I couldn’t imagine a less likely place to find entrepreneurial behavior.

Much to my surprise, he was surprised that I was surprised. But that’s not surprising. It turns out that at his consulting company, they are encouraged to come up with ideas for new products and find new customers. That fits his definition of “entrepreneurial.”

It didn’t fit mine, and I took this as an opportunity to try to define why I had my reaction. Here’s my thinking about what constitutes “entrepreneurial.” Please chime in.

I think we have different definitions of “entrepreneurial.” I hear a lot of corporations use the word “entrepreneurial” as a synonym for “we’re letting you think for yourself and propose creative solutions.” While I applaud that impulse, in my mind, it should be a standard mode of engagement in business and not considered anything to be given a special name.

For me, what you’ve described is being given license to propose new product lines. It fits my definition of “new business development,” and it may or may not be entrepreneurial.

In my definition of entrepreneurship, entrepreneurs (a) are free to change their business offerings, (b) have control over their business model, (c) must raise their own resources and enjoy a corresponding participation in the upside, (d) create an organization, organization structure, and its attendant policies and procedures.

Furthermore, often, entrepreneurs operate in unknowable or cutting-edge spaces. They are introducing new products without the knowledge of whether markets exist.

In essence, an entrepreneur’s product is an organization and business model.

If you can go out to Staples and propose a joint venture where you provide flat-rate actuarial consulting to any insurance company that buys more than $1000 worth of office supplies, with you (personally) pocketing 10% of the revenues, that would be entrepreneurial, in my mind.

If you had the ability to acquire smaller consultancies and attempt a “roll-up,” (without needing corporate approval) that would be entrepreneurial.

If you were to discover that restaurant consulting were more lucrative than actuarial consulting and decide to reposition your job to target restaurants based on your theories/dreams/data about the business model, that would be entrepreneurial.

If your business model is limited (e.g. hourly charging with X% overhead charged back to the parent company), if your ability to raise funds and build an organization is limited (e.g. hiring six people with completely different policies, procedures, dress codes, health plan, etc.), and if your upside is limited (e.g. you can’t create a multinational division and then take home the bulk of the profit as your own bonus), then I would consider you to be in a creative business development capacity, but not entrepreneurial.

Similarly, some people consider franchise owners as entrepreneurial. While they take a risk and share in the upside, I would call them “small business people” and not “entrepreneurs.” They generally don’t have control over their processes, capital structure, organizational structure, or brand/marketing/etc. so while they certainly do start a business with their own funds, they’re sufficiently constrained that they’re essentially employees who shoulder the risk and receive a bonus based on profits.

I don’t think there’s any one agreed-upon definition of entrepreneurship, but in the entrepreneurship circles where I travel, resource scarcity and control over structure, process, and business model are key elements separating entrepreneurial environments from corporate environments.

Can a corporation be “entrepreneurial?”…

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