How to gain a competitive edge is (or should be) the concern of many organisations. A new study looking at one factor, entrepreneurship training, wanted to test whether this will actually make a difference to the organisations level of competitive advantage.
- Entrepreneurship training
- Entrepreneurial culture
- Human resources development
- Developing sustainable competitive advantage as a core HR responsibility
Other than in boom sectors such as green energy and e-commerce, the old Establishment of the UK economy seems to be struggling in terms of growth. Gains may be marginal at best and strong growth something dimly remembered from the days before the global financial crisis of 2007/8.
In order to get marginal gains in a sector that isn’t enjoying the good times, organisations need to find that edge to get ahead. A recent piece of research strongly suggests that in order to make those gains, a novel approach may enable competitive advantage to be regained and managed. Human resources development teams should teach corporate entrepreneurship to the staff of the organisation, and this will breed entrepreneurial behaviour that will encourage creativity, innovation and proactive capability.
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An entrepreneurial culture will hark back to the organisation’s roots where it was started out by people who were responsive to change, flexible, creative and driven in their responses to that change. The people who initially set up the company or organisation made change happen in order for the organisation to develop and grow. They had to adapt to the situations they found themselves in and pivot fast to gain a competitive advantage.
Entrepreneurship is usually only really associated with fast moving start-ups and enterprises rather than slow moving corporate giants. However even giants must innovate or die – just look at the British Home Stores chain that had a presence on major high streets around the UK for over fifty years, yet has gone into liquidation because it failed to keep up with its rivals. Woolworths was the last major company of that stature on the high street to fail, and that had been around since the 1800s and still exists in other countries to this day.
The paper, which has just been published, looked at three commercial banks and states that for large companies “The competitive and entrepreneurial values are related to market orientations … as one of the strategies required for adjusting to variations in the global economy. The modern-day knowledge-based economy requires cultural dimensions that are flexible, relative to adjusting to the variations in the business environments.”
The researchers argue that Human Resources functions are not just for hiring, performance monitoring and firing. They should be core to a business’s outlook and actively contribute to the organisation’s progress, through learning and development of the staff and their mind-sets. While hiring a person who is a good fit for the job, they must also develop them for the post they are in through continuous personal development. For many people in the organisation this should include corporate entrepreneurship and this means entrepreneurship training for key staff.
The researchers found that, “The creative and innovative values are communicated through continuous learning and development programmes in line with the business needs and strategies.”
In driving entrepreneurship into the organisation through entrepreneurship training so human resources development teams can bring about sustainable competitive advantage. In the knowledge based economy, a company will succeed or fail because of the people it has. As discussed above, this is also not just bringing in the right people but in training them to be the kind of people the company needs to be competitive. The paper found, “human capital can be seen as a unique source of sustainable competitive advantage since efforts toward sustainability largely depend on the effective utilisation of human resources, leading to returns on sales, market shares, customer retention, efficiency and productivity.”
Whilst this was focused on the banking sector, there is a lot to be learned by other organisations outside the financial sector. Marginal gains in these sectors could make all the difference in terms of competitiveness and that added edge could make the difference between survival and failure.
Is your organisation developing what has been termed as intrepreneurship?
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