Transformational Entrepreneurship

This year, the Leuphana Transformational Entrepreneurship Days will take place for the first time hosted by Leuphana University Lüneburg. A three-day online conference that deals with a new approach from the field of entrepreneurship research. But what exactly does Transformational Entrepreneurship stand for? Here is a brief introduction.

Zero hunger and no poverty, clean water, environmental action, gender equality – these are just a few of the goals formulated by the UN as Sustainable Development Goals. They are part of the so-called “Grand Challenges” that societies must address in the 21^st century (George et. al., 2016, p.1881). These “Grand Challenges” show that it needs large-scale and far-reaching change. On the one hand, these changes need political actions to occur. On the other hand, various actors in society initiate change as well. One group of these actors are entrepreneurs, who provide important impulses for change in society.

Entrepreneurship is not a new idea. Various countries, universities and business schools started in all earnest implementing entrepreneurial programmes since the mid-1980s. Due to this increased importance devoted to entrepreneurship and its role in socio-economic development, a plethora of entrepreneurial support programmes and structures were created and implemented globally. Despite this plethora of activities, the socio-economic environments in many countries have not improved to address critical problems such as rising unemployment and skewed distribution of wealth. It is acknowledged that the world is changing and faces various challenges such as Covid-19. These challenges will probably not become less in future. Therefore, entrepreneurship should change to address these changes and challenges. Novel approaches are required – transformation is required through entrepreneurship which gave rise to the concept of transformational entrepreneurship. (Gideon Maas, Interview)

Entrepreneurship research reflects upon the question how it can help these entrepreneurs to create change for society in a more effective way. It has been recognised that a new system needs to be created that promotes social transformation on a holistic level (Maas & Jones, 2019, p.2). Such a system is to be realised, with the concept of transformational entrepreneurship. Transformational entrepreneurship describes a holistic, systemic approach in which entrepreneurial action helps to respond to socio-economic challenges (Maas & Jones, 2019, p.4). In this context, the individual actors should not be examined on their own, but as an interconnected system (Maas & Jones, 2019, p.5). Transformational entrepreneurship thus does not ask the question: How can we support a single local enterprise? But rather: How can we create a system that drives socio-economic development through entrepreneurship at an international level?

Creating socio-economic impact

The ultimate goal of Transformational Entrepreneurship is to create a positive impact through entrepreneurial activities. Both societal and economic impact are to be promoted equally (Maas & Jones, 2019, p. 5). Marmer contrasts the extremes of a strongly profit-oriented company and a company that primarily focuses on societal impact (Marmer, 2012). However, societal impact and economic growth should not exclude each other, but should be combined in the concept of Transformational Entrepreneurship (Maas & Jones, 2019, p.11). In practice, this can be a challenging endeavour.

Within a complex environment a “one solution fits all” scenario is not possible. One needs to accept that there are probably more questions than answers but then again, should we not spend more time on identifying the right questions and then find deep solutions for them? Questions can be “how to create specific compelling entrepreneurial narrative for regions” followed by “what type of entrepreneurial eco-systems will support the implementation of such a narrative”. The more a narrative is used the more one can expect behaviours to turn towards achieving that narrative, which again leads to more focused attention which is required to create a positive socio-economic environment. This should be backed up by questioning policies and how it should support the entrepreneurial eco-system. Lastly, questions about the innovative capability and capacity of regions need to be investigated. How can more radical innovation be promoted? One should move away from a dominant operational approach about the “what, how and when” to a more explorative approach focusing on process questions such as “why not” or/and “what if”. Such innovation will go beyond incremental innovation and focus on transforming relationships and interactions between industry competitors, people’s behaviours and lifestyles. (Gideon Maas, Interview)

According to Roth and DiBella, there are five components that need to be considered, in order to create such systemic change (Roth & DiBella, 2015). First, it has to be clear what kind of system you examine and how it is structured (1 - “enterprise awareness”). Furthermore, innovations that offer solutions to the “Grand Challenges” of our time must be promoted in this system (2 - “innovation”). This should be done through a top-down as well as a bottom-up approach in order to introduce transformation in a balanced way (3 - “balancing push and pull factors of change”). However, entrepreneurial growth should be kept in sight in order to preserve economic wealth (4 - “seeking growth”). Therefore, it is important to think of entrepreneurial change together with entrepreneurial growth. Finally, it is important to establish leadership position (in the sense of “transformational leadership”) that integrate the approach of transformation in the different entrepreneurial levels (5 - “seeking leadership”). (Maas & Jones, 2019, p.8)

Time for change

Transformational entrepreneurship is an approach to entrepreneurship research that aims to promote socio-economic transformations on a systemic level through entrepreneurial activities in order to address the “Grand Challenges” of our time. In other words, it is about building new businesses and transforming existing businesses in such a way that they can sustainably create the much-needed changes in our society. But how does one do that? What are the much-needed changes in our society? How can entrepreneurs be supported to create change? The Leuphana Transformational Entrepreneurship Days want to discuss these timely questions. Because: It is time for change.

This introduction was written by our student assistant Vivien Bode and is complemented with quotes from Gideon Maas, excerpt from an interview in writing. Gideon is the director of the International Centre for Transformational Entrepreneurship at Coventry University. We are grateful for the permission to share their work and insights.

• George, G., Howard-Grenville, J., Joshi, A., Tihanyi, L. (2016) Understanding and tackling societal grand challenges through management research. Academy of Management Journal. 59, (6), 1880-1895. Research Collection Lee Kong Chian School Of Business.
• Maas, G., & Jones, P. (2019). Transformational Entrepreneurship Practices. Palgrave Pivot.
• Marmer, M. (2012). Transformational Entrepreneurship: Where Technology Meets Societal Impact. Harvard Business Review. Last access 02.08.2021 at https://hbr.org/2012/04/transformational-entrepreneurs.
• Roth, G. L., & DiBella, A. J. (2015). Systemic Change Management – The Five Capabilities for Improving Enterprises. New York: Palgrave Macmillan.