BUILDING THE ADAPTIVE FIRM
It is important for entrepreneurs to establish a business that remains flexible beyond startup.
An adaptive firm increases opportunity for its employees, initiates change, and instills a desire to be
innovative. Entrepreneurs can build an adaptive firm in several ways. 13 The following are not
inflexible rules, but they do enhance a venture's chance of remaining adaptive and innovative both
through and beyond the growth stage. 14
Share the Entrepreneur's Vision
The entrepreneur's vision must be permeated throughout the organization in order for employees to
understand the company's direction and share in the responsibility for its growth. The entrepreneur
can communicate the vision directly to the employees through meetings, conversations, or seminars. It
also can be shared through symbolic events or activities such as social gatherings, recognition events,
and displays. Whatever the format, having shared vision allows the venture's personnel to catch the
dream and become an integral part of creating the future. 15
Increase the Perception of Opportunity
This can be accomplished with careful job design. The work should have defined objectives for which
people will be responsible. Each level of the hierarchy should be kept informed of its role in
producing the final output of the product or service. This often is known as "staying close to the
customer." 16 Another way to increase the perception of opportunity is through a careful coordination
and integration of the functional areas. This allows employees in different functional areas to work
together as a cohesive whole.
Institutionalize Change as the Venture's Goal
This entails a preference for innovation and change rather than preservation of the status quo. If
opportunity is to be perceived, the environment of the enterprise must not only encourage it but also
establish it as a goal. Within this context, a desire for opportunity can exist if resources are made
available and departmental barriers are reduced.
Instill the Desire to Be Innovative
The desire of personnel to pursue opportunity must be carefully nurtured. Words alone will not create
the innovative climate. 17 Specific steps such as the following should be taken:
REWARD SYSTEM explicit forms of recognition should be given to individuals who pursue
innovative opportunities. For example, bonuses, awards, salary advances, and promotions should be
tied directly to the innovative attempts of personnel.
AN ENVIRONMENT THAT ALLOWS FOR FAILURE The fear of failure must be minimized by
the general recognition that often many attempts are needed before a success is achieved. This does
not imply that failure is sought or desired. However, learning from failure, as opposed to expecting
punishment for it, is promoted. When this type of environment exists, people become willing to
accept the challenge of change and innovation.
FLEXIBLE OPERATIONS Flexibility creates the possibility of change taking place and having a
positive effect. If a venture remains too rigidly tied to plans or strategies, it will not be responsive to
new technologies, customer changes, or environmental shifts. Innovation will not take place because
it will not "fit in."
THE DEVELOPMENT OF VENTURE TEAMS In order for the environment to foster in-
novation, venture teams and team performance goals need to be established. These must be not just
work groups but visionary, committed teams that have the authority to create new directions, set new
standards, and challenge the status quo. 18
