How to revive Europe’s spirit of enterprise? European executives show the way

Date

05 Mar 2012

Sections

Euro & Finance

- Business executives’ personality traits are similar across Europe

- Polish executives are more keen on innovation than their European colleagues

A diverse workforce and the decisive allocation of business resources hold the key to reviving Europe’s spirit of enterprise, according to a major new survey by ACCA (the Association of Chartered Certified Accountants), Forbes Insights and Ipsos Observer.

The survey studied the personalities and experiences of 1,245 executives across Europe – focusing on France, Germany, Italy, Poland, Switzerland and the United Kingdom. The resulting report, Nurturing Europe’s Spirit of Enterprise, provides a glimpse into the process of enterprise and innovation in businesses big and small, while also giving a profile of the people that make it possible.

Who are the innovators?

At the heart of the study is a survey - not unlike a psychometric test - of executives’ attitudes and behaviours. Based on their answers, each respondent was allocated to one of five groups with different levels and types of entrepreneurial and innovative potential:

- The Movers and Shakers (22%) have ambition, drive and a bias for action, but they have little patience for teamwork. All other things being equal, they are best at coming up with innovations – but they have trouble getting the buy-in to see their plans through.

- The Experimenters (16%) are perfectionists and workaholics who see a world of endless possibilities. Because of this they are good at coming up with innovations though not necessarily good at seeing them through to implementation.

- The Star Pupils (24%) are great at learning from others and negotiating their way through hierarchies. They are about as good at championing innovative ideas as the Movers and Shakers and probably more so than the Experimenters, plus their positive attitude towards collaboration means they don’t have trouble getting their way.

- The Hangers-On (23%) believe in process but lack motivation and conviction; they understand risk but are uncomfortable in unstructured environments. Their focus on process, however, is not without its benefits. Although they are no less innovative than others, they are probably better than most at seeing innovations through to the end.

- The Controllers (15%) are careful to talk the talk but don’t walk the walk. They lack motivation and are insular, uncomfortable with risk and unstructured tasks.  Because of this they are much less successful at championing innovation.

What works?

The study found superficial differences between the attitudes of executives across the countries researched.

Executives in Poland are much more intent on innovation than their peers elsewhere in Europe – a result that speaks to this country’s potential. But once the combination of personality, organisational structures and resources, as well as business support, is taken into account, businesses and executives across Europe are very much equally capable.

Manos Schizas, Senior Policy Adviser at ACCA said: “The results demonstrate how crucial diversity is to the process of innovation – there is no one innovative or entrepreneurial personality. Rather, different people – even some of the more cautious and rigid types – can bring something important to the table.

“We need finance functions in Europe to be able to attract the right mix of people. This study confirms that they can, but when it comes to CFOs some very innovative personality types are under-represented; we need much more research to find out the reason for this, but the lack of a coaching and mentoring culture in finance is one likely suspect.”

In the current environment, it is perhaps not surprising that poor access to finance emerged as the biggest obstacle to innovation. But importantly, it was not the inability to raise finance externally that most frustrated enterprising executives but the difficulty of securing funds for innovation internally, in their organisations’ budgets. Serendipity on a shoestring will only take businesses so far.

Organisational resources in general are a big issue, but the advantage of being part of a large, resource-rich organisation cuts both ways. Medium-sized businesses, with revenues between $5-100million may have the advantage when it comes to implementing innovations – small businesses lack the resources while large ones can get tied up in their own processes and bureaucracy. In fact, corporate management is at a distinct disadvantage when it comes to implementing innovations. The functions that are best at achieving this have narrow, concrete mandates and pursue innovations with directly measurable results.

The study confirmed that the finance department is seen as a pivotal business resource – with a good understanding of the needs of entrepreneurial business and the appropriate resources to serve them.

What can governments do?

The study suggests that generous government funding might be part of the problem, not the solution. After controlling other factors, where the more risk-tolerant business support agencies offering grants and other funding were perceived to be, the probability was lower that executives in a business would generate and champion innovative ideas. Non-financial support from the government, on the other hand, was positively correlated to the successful implementation of innovations, and when the agencies providing this understand the needs of entrepreneurial firms well, they could help executives conceive of and champion innovations. Government agencies in France and Italy were seen as best in these regards, although they were also the most active in providing financial support.

Manos Schizas concluded: “Often regulations also stand in the way of innovation; the study found that, as an obstacle to innovation, they rank second only to the lack of finance. Of all the countries with large samples, this problem was cited most often in Poland and Switzerland, while regulations in France and the UK were seen as least problematic.

“Often the help innovative businesses need has nothing to do with money; many will need help protecting intellectual property, accessing foreign markets. Governments can help a lot, but their most politically expedient options may not be the best.”

- Ends -

For more information, please contact:

Helen Thompson

ACCA Newsroom

+44 (0)20 7059 5989

+44 (0)7963 496144

helen.thompson@accaglobal.com

Note to editors

1.The Forbes Insights study, Nurturing Europe’s Spirit of Enterprise, is part of ACCA’s Research and Insights programme. A copy of the report can be found on ACCA’s website here or on Forbes’ website here.

2. You can find out more about ACCA’s Research & Insights programme here

3. ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability.

4. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and their delivery to meet the diverse needs of trainee professionals and their employers. We champion the needs of small and medium sized business (SMEs) and emerging economies, and promote the value of sustainable business. We support our 147,000 members and 424,000 students in 170 countries, helping them to develop successful careers in accounting and business, with the skills needed by employers. www.accaglobal.com