In a dynamic world, companies recognize the imperative of being entrepreneurial, of exploring opportunities outside their comfort zones. But it is not long before this new energy runs against the core organizational forces of reliability and accountability. Entrepreneurial activity needs to deliver foreseeable results, for how else could it be justified?
As I explored in an earlier post, the messy, chaotic nature of entrepreneurial efforts sit uncomfortably within corporate structure: mistakes are a normal part of the process, it is impossible to know whether efforts are effective or efficient; it all looks like a huge expense rather than an investment. Mysteriously, the closer one looks and oversees, the more problematic entrepreneurship seems. To link to another previous idea, control is not the answer.
But stepping off and letting go is counter-intuitive and not conducive to a good-night’s sleep. The challenge is front and central at the Strategy & Innovation Forum I am currently attending. Three ideas resonated with me from the shared stories of how people deal with this challenge within organizations. The first is that when we let go and keep our distance, we have to replace the void in between with trust. Trust can mean many things, but in this setting I see it as being about giving credence to the knowledge we cannot verbalize (our intuition) and not dwelling on the unknown (for the more we dwell, the more we fear it).
Lest the above induces a sense of being stuck in quicksand, the second idea is one of scaffolding, of basic discipline that we can hold on to. It is about setting boundaries, within which we can trust people to deliver: creating a sandpit in which there is play is free and unscripted, but a sense of purpose is clear. The boundaries evolve to facilitate productive behaviors and prevent destructive ones.
The third one is about not taking purpose for granted. It needs to arise from an exploration of how the original problem that sets the process off is embedded in a broader, holistic system. Rather than loose sight of what we are trying to do in the first place – a natural consequences of embarking on a linear, sequential, one-way process – we need to continuously revisit this question in the light of our broader understanding of the context. This is process of active perception – zooming and re-framing – through which we peel off layer after layer … under we get to a core that frees and inspires people to unleash their creativity and, at the same time, keeps them anchored.
Great piece in the FT (below) on the mis-use of mathematics in finance. The target of criticism are those who over-fit past data to profess a successful trading strategy for the future.
It is not a long shot to extend this to explanations of entrepreneurial performance. To a large degree, we tend to look for patterns in past performance data, but are these really useful as guides for the future?
Because we know what actually happened, we can always find an explanation for it. But since what happened cannot be assessed probabilistically among its many alternative paths (which did not happen and which cannot be really enumerated) there is no weight to our explanation in guiding us towards an open ended future.
Financial Times, When use of pseudo-maths adds up to fraud
I have a growing interest in understanding the process through which entrepreneurial opportunities unfold from mere ideas. And it is becoming increasingly clear to me that the logic of process is fundamentally different from the logic of cause and effect, which over the years has become my default mode of thinking. In an unfolding process, current actions and events have meaning only when seen against some eventual outcome, whether success or failure; in the moment the seem uncertain, ambiguous or trivial.
In opening this new frontier, I am currently reading The Innovation Journey by Andrew Van de Ven and colleagues, a summary of the Minnesota Innovation Research Program and one of the rare accounts of innovation processes as they unfold. In their reflection on the program, they make the point that entrepreneurs and managers can control only the odds of innovation success and not its actual realization. To make a point about the existence of control bias, they give the example of Franz Klammer, the 1976 Winter Olympic Champion in Men’s downhill skiing, as told in an 1982 book by Bill McKelvey. Klammer won by skiing “out of control” as this video I found of the event readily attests. Staying “in control” would have guaranteed a loss, while being “out of control” at least offered the possibility of winning.
Where am I going with this? What comes to mind is that a business plan, if taken too seriously, is essentially about being in control of pursuing “the” opportunity that it features. The above logic would suggest that not letting go would almost ensure failure. Thus, the best use of a business plan would be as a learning tool, whereby it follows rather than leads. It keeps me free to explore diverging paths with the glimmer of hope that there might be something big around the corner.
But of course, these are just odds. If I succeed, I will likely write a book about it and people might see prophecy in my taking every path along the way. If I do not succeed … well, I simply join the vast majority who never get to write books. And all those paths would not look shiny at all.