Tuesday, February 22, 2011

Entrepreneurs break corporate thinking patterns

Pioneer entrepreneurThanks to the magic of Twitter, I learn lots from different sources (though I wonder if doing so is actually a distraction from actually getting stuff done? That's another debate on another day...)

Today I came across a great quote in The Economist blog based on an article in Inc: "Saras Sarasvathy concluded that master entrepreneurs rely on what she calls effectual reasoning. Brilliant improvisers, the entrepreneurs don't start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies. By contrast, corporate executives—those in the study group were also enormously successful in their chosen field—use causal reasoning. They set a goal and diligently seek the best ways to achieve it. Early indications suggest the rookie company founders are spread all across the effectual-to-causal scale. But those who grew up around family businesses will more likely swing effectual, while those with MBAs display a causal bent."

I liked the comment that "Those who are happy building a business from nothing, and those who are happy to take a place in someone else's, are as different as night and day. People who demand freedom and flexibility are not at all like those who crave structure and security. That's why entrepreneurs have to hire MBA suits to run their successful businesses, and go start something new."

As I explained to some clients last week, I tend to ask a couple of profound but idiot-level questions on a regular basis: "So what?" and "What if?" Both questions lie on the 'effectual' rather than 'causal' end of the spectrum; and they're both uncomfortable for those who like the same-old routines.

But as the pace of information flow increases with globalized technology connections; and implications from previously disconnected fields of research converge on other disciplines to create new possibilities; society increasingly needs people who are prepared to pioneer.