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Why Corporations Won’t Hire An Entrepreneur

EntrepreneurOne morning last week while reading articles on LinkedIn Today one article in particular jumped out at me. The article titled “Entrepreneurs need not apply: Companies shun the self employed” and I thought to myself “you’ve got to be kidding“.  So I opened the article and was amazed at what I read or maybe I shouldn’t have been.

The article statesEntrepreneurs and freelancers attract fewer interview invitations than comparable candidates who have spent the last few years working for someone else, according to research which will be presented to the Academy of Management annual conference in August. In the UK, the self-employed received almost two-thirds fewer interview requests than people with similar professional experience who worked only at employers.“The stigma against the self-employed may indicate that hiring managers just don’t see them as a good fit in their corporate culture. Traits that work for start-ups—risk-taking, taking charge and adopting “unusual points of view”—don’t necessarily work well in corporate careers, the paper noted.”

That’s ironic because company executives and human resources say they are looking for self starters, innovative hires, a certain entrepreneurial spirited people equipped with a 21st century mindset.  Just maybe corporations need entrepreneurs more than entrepreneurs need corporations.

The Opposing Forces of Two Mental Models

Corporations have become factories of mental models created over decades of controlling how and what people think through the influence of power and money. The attitudes have created cultures of “we are in control and we pay you to follow the rules we make“.

These mental models were designed to build organizations where compliance and productivity of human labor determined profitability.  Subsequently organizations were built around a hierarchy of control similar to the military where the strategy was to beat the enemy.  This mental model is dependent on compliance.  Compliance through control of resources via influence of power and money has proven to be limiting and costly.

The mental model of an entrepreneur is opposite of the old models followed by many corporations. The best definition of the entrepreneurs mental model was conceived 37 years ago by HBS professor Howard Stevenson in his  book Breakthrough Entrepreneurship which states Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.”

While corporations say they want to recruit people who have similar attributes as entrepreneurs the fact is those very people will typically disrupt the old school corporate cultures. A disruptor will either create support for the necessary change or quietly be dismissed and labeled as a trouble maker.  The reason the two will never get along is because of the opposing mental models.

The real issue is which mental model works best in the 21st Century? The markets will decide and so far the entrepreneurs seem to be winning.

Corps. vs

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  • ca aninda ghosh 08/21/2013, 8:22 am

    Mediocars are favorites with many corporates & people with endeavor & lots of zeals & enterprising skills are not favored by corporates as many & aplenty. In fact, in India PSUs still hold a lot many of geniuses going by sheer no. Enterprises not run by promoters do not fear so much about the geniuses . A brainstormer is an eye shore & a genius leaving a good enterprise fails to land up in a Better enterprise , in many cases . So many talents are getting wasted & it is a national wastage of resources . There is hardly any serious competency bank service / central mgt of competency analysis in India . All HR agencies are doing lip services & window services.

  • Rory Colfer 08/15/2013, 7:50 am

    To those considering being an entrepreneur don’t let this very good article put you off. Being an entrepreneur is like being a parent – wonderful, occasionally horrible, full of hard work, initially very damaging to your cash flow, and not easy to explain to someone who is not one. You try very hard to succeed at both.

    And if you don’t want to take the plunge then the entrepreneurial traits shown above are surely worth developing in any case.

  • Ben de Haldevang 08/14/2013, 1:44 am

    Organisations these days talk about incremental innovation and disruptive innovation. The evidence would suggest that whilst large corporations say that they are interested in disruptive innovation, they cannot really cope with it as it does not fit into the structure of control required. It’s an interesting legacy of mergers and acquisitions that companies end up with entrepreneurs in their ranks for a short while at least and profess the wish to retain them for longer but fail to do so…a very large technology company did a study not long ago where they found that the entrepreneurs they had acquired were rated consistently in the bottom 10% of performers amongst their employees! Their solution….to house them in a separate building! To keep them in or to keep others out? Who knows….

  • Per-Eric Ejstes 08/12/2013, 7:58 pm

    Really interesting and thoughtful article which gives a very good insight to where external resources might have some challenges in getting through with the services. Really looking forward to next article. :-)

  • Robin Williams 08/08/2013, 7:22 am

    I guess after going through the post many users’ views and perspective might have changed regarding entrepreneur and corporation and the relation between them. I found it really interesting and knowledgeable. Great work guys.

  • Steven 07/27/2013, 1:36 am

    Yes, you are right. Many corporations believe that they have sound knowledge of business management and marketing. Here One thing they don’t know is that the big organization grows because of the best people not because of management activities. The entrepreneur is the person who design the long term success path for an organization and archived them in any circumstances.

  • Danile Curley 07/22/2013, 8:38 am

    Hi Jay,
    Thank you for your article – I struggle every time I apply for an internal consultancy position – should I use my business e-mail or my personal for the very reason you’ve identified. I have both work “in-side” organizations and provided consulting services from the “out-side”. When hired as a turn-around management consultant the term is defined and my creative mind is hired to make both the leadership and the systems of that organization into something more effective, efficient and often to instill a “learning organization” process approach to meeting their mission. When hired internally my experience is that your still seen as an outsider, short-term and suspect – to paraphrase a debate while inside as I advocated for systems change – “you only want this change to enhance your resume”. Following the leader, maintaining the status quo and not changing things “too” much is a consistent message.

    Finding a message that works, an approach that doesn’t threaten and building change over time through new leadership development is often a hard sell to many management staff in place now – even while they might mime all the creative jargon of the day.


  • Jeniffer Cooper 07/19/2013, 12:09 am

    I totally agree with your points! There is always a mental block between a corporate way of thinking and an entrepreneur thinking. The two can never have the same approach.