Category Archives: Entrepreneurship

Savvy Saturday July 1st, 2017

The function of education is to teach one to think intensively and to think critically. Intelligence plus character – that is the goal of true education.

Martin Luther King, Jr.

Good Money, Bad Money

The basic idea of good money and bad money is that the type of money a manager accepts carries specific expectations that must be met. These expectations heavily influence the types of markets and channels that a venture can and cannot target. The very process of securing funding forces many potentially disruptive ideas to get shaped instead as sustaining innovations that target large and obvious markets. Thus, the funding received can send great ideas on a march towards failure.

As emergent ideas are being nurtured during nascent years, money must be patient for growth but impatient for profits.

When winning strategies become clear and deliberate ideas need to be carried out then money should be impatient for growth but patient for profit.

  • Clayton Christensen, Disruptive Strategy, HBX
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¿Llegó el fin de la ventaja competitiva?

Existen artículos y libros que hablan del “fin de la ventaja competitiva”. En ellos se explica que la empresa del futuro se basa tanto en activos tangibles como en activos intangibles, conecta –en vez de dividir– intereses y destaca por el alineamiento de valores en vez de la competencia entre intereses, empresas y mercados.

Puede sonar idealista dentro de una sociedad y un mundo de negocios que se vuelve más competitivo cada día, pero a raíz de este movimiento, en la administración de empresas hay una idea muy sencilla y comprobada: un enfoque equilibrado es la clave para que una empresa tenga éxito en el corto, mediano y largo plazo.

Si nos enfocamos sólo en ganancias, no invertimos en proyectos innovadores. Si seguimos sólo lo que hace la competencia, no tenemos apertura hacia ideas nuevas e innovaciones que crean mercados (como explica Clayton Christensen en su libro The Innovator’s Dilemma). Steve Jobs, durante sus años creando productos para su empresa Apple, decía que no le importaba lo que quería el mercado, porque el mercado no sabía lo que quería.

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Photo: Creative Commons

La idea fundamental del “fin de la ventaja competitiva” es que no nos encerramos en lo que hace la competencia ni en generar retornos. Las organizaciones tienen que redefinir el éxito; por ejemplo, la nueva ventaja competitiva puede ser la conexión de la empresa con la sociedad. Empresas que son conectadas con sus stakeholders y crean productos y servicios que tengan relevancia en las vidas de ellos (ejemplo: Netflix, Uber, etc.) son mucho más exitosas que las empresas que niegan los cambios en los deseos y comportamiento de sus clientes. La conexión entre una empresa y sus seguidores hace la diferencia siempre y cuando la empresa tenga contemplada esta apertura a la innovación y conexiones inesperadas.

¿Cómo lograr este equilibrio entre proyectos innovadores que no generan ganancias todavía y los servicios o productos que son codiciados en el mercado? Existen tres áreas estratégicas donde una empresa del futuro “vive” este equilibrio:

  1. Visión organizacional: La visión de la organización está con un propósito duradero y cautivador aprobado por el directorio y desarrollado en conjunto con todos los stakeholders.
  2. Plan de mitigación de riesgo: Se identifican riesgos y su mitigación en todos los proyectos de la empresa, incluyendo proyectos que contemplan un cambio al statu quo.
  3. Plan de innovación: Más que una palabra de moda, la innovación tiene que ver con la inversión en proyectos innovadores y arriesgar fondos en proyectos que son interfuncionales y que pueden demorar años antes de alcanzar la rentabilidad.

Una reevaluación de la definición del éxito a través de la visión organizacional y los planes de inversión (incluyendo mitigación de riesgo y de inversión en innovación/investigación y desarrollo) dice mucho de qué tipo de empresa queremos ser y si estamos aprovechando la innovación y la conexión de intereses. La empresa del futuro, entonces, necesita un liderazgo que tenga una visión amplia del éxito y de la prosperidad basada no sólo en la ventaja competitiva.

 

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This blog post was originally published in September 2015 by Forbes Mexico as a featured business article.

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Managers as Myriad Actors

One of the fundamental questions raised during the Global Peter Drucker Forum in Vienna two years’ ago was what our actions will be, as managers, when facing the Great Transformation; in other words, when facing transformational changes that lie in the future for companies, governments and communities alike, what actions will we take today? Will we be one of what Richard Straub, President of the Drucker Society Europe, calls the “myriad actors” who shape the future and impact others or will we abstain from courageous and decisive action?

Peter Drucker talked about the role of managers as “the central resource, the generic distinctive, the constitutive organ of society…” and that managers’ actions are essentially a “public concern” because our survival as a society is “dependent on the performance, the competence, the earnestness and the values of their managers.” (Drucker: The Ecological Vision)

The conversation in Vienna re-examined management’s responsibility to society and humanity. One of the things that drew me to the work of Drucker over 15 years’ ago was his focus on human-centric organizations. And yet, today, we still see organizations more focused on short term profits for shareholders rather than a balance of long and short term value creation for all stakeholders including employees, community and society in general.

Are we doing enough to keep that balance? Many of the speakers did not think seem to think so. They cited studies showing that only 13% of employees around the world are engaged in their jobs (Gallup’s “State of The Global Workplace” report) and that 63% of 1000 corporate board members and C-suite executives surveyed by Mckinsey claim that pressure to generate strong short –term results has increased over the past five years. Clearly, we have a lot of work to do – to shape the future towards value creation for all stakeholders and unleashing the incredible creative and human potential of the people who work with us.

How might we do this? By being “myriad actors”; by looking for ways to shape the future, “see around corners” (as Forum speaker Nilofer Merchant said) and impact others in positive ways. Some organizations, for example, choose to connect leading edge technology and a commitment to improving the human condition (see HopeLab recipient of the Drucker Award for Non Profit Innovation). Others focus on improving employee engagement levels (see Telus, and Dan Pontefract’s work).

I don’t think management can be taught only in a management program; I think it’s a combination of art and edifice – and perhaps this is what Drucker was referring to when he defined management in The New Realities, as a liberal art: “’liberal’ because it deals with the fundamentals of knowledge, self-knowledge, wisdom, and leadership; ‘art’ because it is practice and application.”

We might not know exactly how the future will turn out or how it will shape our industry or impact our livelihoods but we can certainly act – in a myriad of ways – to ensure that we keep humans at the center of decision making within our organizations.

As Richard Straub states in “The Great Transformation” (EFMD Global Focus 2014), “Management is a real world practice of dealing with people and organizations. Managers can make all the difference in the world with their knowledge, their creativity, their emotions and their values.” Managers are myriad actors.

Esther M Clark

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A version of this blog post was published in 2014; two weeks following the Drucker Forum in Vienna.

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Savvy Saturday February 25, 2017

“people who create, craft and love their art tend to focus on these seemingly bad ideas nurturing them into something brilliant. The innovators or the troublemakers who question the status quo may end up making something so remarkable that it creates a movement, a tribe, a following …and major business.”

 

From Esther Clark’s article “Seemingly Bad Ideas” published April 2016.

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An end is a new beginning

“What feels like the end is often the beginning” or “one door closes, another door opens” are useful phrases to think about when a project meets its natural, or unnatural, conclusion.

With international projects, these phrases are particularly relevant. Often times we are met by closed doors on the path to success. It does not mean that the project is done but that it might need to be re-envisioned or changes in someway.

Life is dynamic. Business is always changing. So should our projects. A closed door or “end” is just an invitation to a new beginning.

-EMC

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Growth Mindset: Moving Towards Drucker’s Entrepreneurial Society

Entrepreneurship in the Spanish language is most commonly translated as “emprendimiento” coming from the verb “emprender” which means to ignite or start something. For many generations, entrepreneurs in Latin America have started their own businesses for d4e051b46efa7280a957f01bfb5aeecf1.jpgiverse reasons including, as the management thinker Peter Drucker pointed out, a response to a social problem disguised as a business opportunity. A glimpse at the “Rey del Banano” (King of the Banana) rags-to-riches story in Ecuador supports Drucker’s claim; born into poverty, Luis Noboa Naranjo launched the successful Bonita Banana Company after piecing together profits made from sales of newspapers and household items. Noboa later established the Noboa business group; at one time, his business venture was credited for generating 5% of the Ecuador´s Gross Domestic Product.

Nevertheless, an entrepreneurial venture or entrepreneurial economy does not an entrepreneurial society make. It requires something more: not just “igniting” entrepreneurial fires but having the mindset to ensure that the entrepreneurial flame will not die. An entrepreneurial society requires a “growth mindset” – an idea developed over a decade ago by Stanford University psychologist Carol Dweck to explain achievement and success. Dweck compares and contrasts “fixed mindsets” and “growth mindsets”; she concludes that if we focus on learning and improvement as a consistent goal, environment, and the country we are born in, economic realities, as well as adversity or failure, can become powerful impetuses to ensure we grow and overcome pre-conceived limitations to achieving success.

Harkening to the 2016 Olympics currently underway in Rio de Janeiro, an athlete with a “growth mindset” pushes through in order to grow as an individual, an athlete and a citizen representing a nation. They see their failures as a call to further action and continuous training; in other words as a “not yet” rather than a “not ever.” There are clear parallels in athletic training to Drucker’s own words describing an entrepreneurial society where “innovation and entrepreneurship are normal, steady, and continuous.”

For an entrepreneurial society to prosper, members need growth mindsets to consistently keep the entrepreneurial flame alive and support those willing to push the limits of an “employee” society in order to find solutions to the world’s problems. Peter Drucker saw entrepreneurship and entrepreneurial culture as the lifeblood of society (Innovation and Entrepreneurship: 1985). He heralded a new era that would see a shift from an employee society towards an entrepreneurial society. In Latin America, where I live and work, “emprendedores” are igniting entrepreneurial fires with creativity, innovation and problem solving skills; yet the region – like many other major trading areas in the world – continues to call for a growth mindset from members of society that would lead us through economic and political instability and clear past the “same-old” power dynamics.

Global discussions around “entrepreneurial society” must be inclusive with ideas from developing as well as developed countries, public and private counterparts, local and international companies, thinkers and managers, students and teachers, entrepreneurs and intrapreneurs, CEOs and investors. If an entrepreneurial society is to flourish, we need a “mindset” of constant learning and growth supported by connections across real and psychological boundaries. In every corner of the globe, adopting a growth mindset together with learnings from larger discussions of entrepreneurship and transformation, will help us move to a society of creators, co-creators and organizations that respond ethically, empathetically and effectively to the societies we serve.

-EMC

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