As I’m researching companies, I always look to assess which business leaders are most likely to be innovative and which businesses encourage innovation—keys to the long-term success and health of any company. So I went straight to someone who literally wrote the book on entrepreneurship, Professor Andrew Corbett, the Chair of the Entrepreneurship Division at Babson College, to gain some insight into what qualities make for successful innovation at companies, large and small. 

With a school that has entrepreneurship down to a science, you’d think that its staff and faculty would be able to determine who has what it takes as an entrepreneur upon first meeting them or even just reviewing their application. But Professor Corbett was quick to dispel that notion—in his estimation, entrepreneurs are made, not born. There is no single set of traits that makes someone excel at entrepreneurship, but rather a series of actions. And one of those important actions is, perhaps counterintuitively, repeated failure—and learning from it.  

Professor Corbett and I agree that some of the most successful entrepreneurs are the ones who fail often but keep trying, and take the time to assess and adjust after each misstep. It’s advice I would give to any business owner, and my own children: “‘small-f’ failure,” taking a bet on a particular aspect of your business or product that doesn’t work out, welcoming feedback, making changes, and trying again. With that in mind, investors should also proactively look for a series of successful failures in the business’ history. That’s an intangible asset integral to the long-term success of any business, the market, and our economy.

It’s also a signal of a healthy appetite for taking risks, which isn’t just important for individuals and solo entrepreneurs. It’s just as critical, though possibly harder to implement, for large businesses. We’ve both seen how one’s risk-taking appetite changes over time, and predictably gets smaller when you feel you have more to lose. But in an environment where new, smaller companies are disrupting the old way of doing things, established companies are realizing that they have to innovate to stay in business. 

As Professor Corbett says, everyone can be entrepreneurial, even if they themselves are not entrepreneurs; and it’s on businesses to create the roles and autonomy for entrepreneurial thinking. He shared the story of Akio Toyoda, grandson of the car company’s founder, who came to Babson for a master’s degree. One wouldn’t think a third-generation leader of a multibillion-dollar business would need much more training, but Akio’s own business philosophy said it best: Always think like an entrepreneur. He knew that, even though Toyota may sell cars in over 170 countries around the world, they still needed to think like a startup to succeed in a competitive and changing industry. 

 In the present day, Professor Corbett noted that companies lead on innovation when they make room in their businesses for discovery, incubation, and acceleration. They know that it might take a long time for these investments to pay off, and that it will involve a good deal of risk and failure, but it is how they create long-term value for themselves and their shareholders. He calls for businesses to create a dedicated group of individuals whose job is innovation and let them innovate. And while they’re making space, Professor Corbett and his colleagues will keep encouraging entrepreneurial thinking in the next generation. 

Listen to our full conversation: Andrew Corbett: Identifying Great Entrepreneurs 

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