3 Benefits of Hiring an 'Entrepreneur-in-Residence'
For most companies, having a CEO who's forced to constantly divide his or her attention is a surefire way to kill the business. Companies need to focus on successful growth, not developing new projects.
This is why so many big companies, likeGoogle Ventures, Target and Dell, and venture capital funds like Accel Partners and Battery Ventures, are investing in entrepreneurs-in-residence. Harvard Business School and MIT have EIRs in place, as well, and colleges and universities have even started offering educational programming in entrepreneurship.
Hiring an EIR may sound counterintuitive to other entrepreneurs, but this move can help a small business or startup leverage its core competencies, allowing the CEO to focus on big-picture issues while a trusted “intrapreneur” works on new initiatives.
In my own case, as part of my efforts to create a successful marketing agency, I put everything into building my core business. But, as I found, reaching a certain level of success can be a Catch-22 at times, because a lot of opportunities presented themselves which I couldn't possibly seize on, on my own.
If you find yourself in a similar position, a symbiotic solution is to invest in an EIR as an internal partner. An EIR can give your company a strategic edge by jumping into exciting new ventures while honing his or her own leadership abilities. What about benefits for the companies involved? Here are several.
1. Intrapreneurship facilitates strategic growth.
In today’s business landscape, entrepreneurship has become a hot commodity. While the concept of the “intrapreneur” has been around for decades, with businesses of all sizes now hiring EIRs, intrapreneurship (entrepreneurship within a larger organization) is riding the crest of a sea change in how businesses scale and expand their offerings.
This new breed of worker is represented by the most forward-thinking minds. That's why businesses that want to harness their potential for building special projects from the ground up should cultivate an “intrapreneurship mentality” within their organizations.
EIRs make sense for any company looking to develop new goods or services.
2. EIRs don’t mirror -- they complement.
CEOs should select EIRs whose talents play off their own. For example, I handle celebrity relationships with our brand, so I didn’t need someone to connect us to more celebrities; rather, I needed an operator who could spin up manufacturing and fulfillment to enhance my own core competencies.
Other entrepreneurs and startup leaders can look for EIRs to give them a boost in three key ways:
1. Managing portfolio business. Entrepreneurs-in-residence can lead spinoff brands and equity deals, freeing up the CEO while the business gains new market shares and audiences.
When my company decided it made sense to use our staff’s diverse expertise to expand our offerings, we hired an EIR to manage our equity deals and launch new internal brands and celebrity products. Because I could devote only about 5 percent of my time to my company’s 12 equity deals, they couldn't be organized until our EIR started, initiated weekly meetings with portfolio companies and organized summaries of those business.
EIRs also help founders avoid the pitfalls inherent to becoming “parallel entrepreneurs,” or starting companies concurrently. As HubSpot co-founder and CTO Dharmesh Shah learned the hard way, running two startups essentially sets one up to fail because a CEO can’t devote himself or herself to two all-consuming projects. However, EIRs can lift some burdens so that both ventures succeed.
2. Developing key partnership strategies. CEOs should include EIRs in meetings that concern venture capital, influencers and agencies This way, the entrepreneurs-in-residence can connect the dots about portfolio businesses and hit the ground running with spinoff brands.
For instance, when a celebrity wanted our assistance in starting a business, our EIR offered to develop the partnership. His experience as an entrepreneur and his ability to capitalize on connections provided counsel and knowledge that benefited the deal. EIRs must be given all the resources they need to succeed with portfolio companies.
In another situation, I had a particular project that required opening up specific resources. So, I involved my EIR by introducing him to my network of connections -- PR execs, agents and relationship managers -- to ensure he had at his disposal all the communication tools he needed.
3. Streamlining nitty-gritty operations. EIRs must be given enough autonomy to delve into the nuts and bolts of meeting clients’ needs. Google’s EIR Jewel Burks, for example, assists small businesses by optimizing their web efforts and giving advice to their teams. EIRs must dig in and work at this granular level, providing the specific services customers demand.
In another instance, one of our portfolio companies had fulfillment issues. So, our EIR helped the client’s team overhaul its entire process. He now sits down with the CEO every week to answer questions and solve operational problems.
EIRs can also pull in team members and bring them up to speed on projects as needed. This will allow companies to capitalize on the strengths and expertise of their staffs to solve specific issues without everyone needing to be on board from the outset.
Not only do small businesses with EIRs benefit from having dedicated intrapraneurs develop unique initiatives, but they can keep their best people engaged long-term.
Meanwhile, entrepreneurs-in-residence complement their CEOs’ strengths, leverage their companies’ strategic advantages and boost their brands’ output. With both sides seeing such incredible reciprocal benefits, it’s a win-win.