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So you want to act like a start-up?

More and more, established businesses say they want to act like a start-up, by improving their entrepreneurial spirit, enhancing risk-taking and putting ping pong tables in conference rooms.

Too bad they usually don't follow through on their plans.

A new study shows that more than half of U.S. employees say they have tried pursuing an entrepreneurial idea at their organization. But the research also found that only one in five say management delivers the crucial support, and just 12 percent believe that their company accepts failure in the quest for innovation.


Zak Kendal | Cultura | Getty Images

In fact, failure is a significant component of innovation, and deciding who takes on the risk is the fundamental question that senior executives should answer to drive innovation that will excite the marketplace.

Currently, most established businesses have it backward. Individual employees often take on the risk for promoting ideas — which can have negative consequences if the idea doesn't pan out. The enterprise, which actually has the resources to absorb the risk, tends to push it to employees.

The result: Executives usually report that their employees don't create enough new ideas to help the organization grow.

The solution: In part, senior managers need to allow the business to take on more of the risk for innovation as they nurture and enable an entrepreneurial culture.

We're not talking about allowing entrepreneurial behavior to run wild, or that an overflow of new ideas will lead to innovation. Ideas in the abstract are unprofitable. Many times, innovation relies more on monetizing the ideas than simply having them.

That's why executives should develop a push/pull cycle to bring out the best from their employees.

On the push side:

Confront risk and determine who will take it on. Managers should step back and determine how much risk is acceptable for the desired results. Then, they need to allow the enterprise to take on the risk, instead of letting it to fall squarely on employee shoulders.

Develop "fast risk." The best, cheapest sort of risk is part of a process that moves quickly to the "keep-or-kill" decision, in which management decides whether to proceed. Many times, working with customers as ideas are developed is the best way to get instant feedback and pave the way for fast decision-making.

Demonstrate that the company rewards smart risks, for employees and managers. All employees — including management — should believe in the rewards for innovation, especially the people who stoke the innovation pipeline with good ideas.

On the pull side:

Offer clear incentives, including appropriate rewards for idea generation, not just successful implementation. But be clear: The goal of the incentives is to encourage development of profitable ideas within a distinct time frame.

Develop a robust process to put an end to ideas or even products and services that are no longer useful. Without regular culling of the offerings and products, the system can become clogged.

Foster an internal ecosystem of competition and support, reinforcing competition and recognition for innovation.

Ping pong tables are fun. But a more useful gift to your employees — and one that could come back in numerous returns for you — is to give them the chance to be an entrepreneur in plain sight.

— By Matt Riley

Matt Reilly is managing director for Management Consulting in North America at Accenture, a global management-consulting, technology-services and outsourcing company. Follow Accenture on Twitter @accenture.

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