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 diverse 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.
Strategy + Business published an article about Adidas reconnecting with its past in order to inspire its future. It reminded me of a discussion we had this week while we were “ideating” for the future of one of our organization’s business units; I mentioned the unit’s “legacy” and how this presents challenges and opportunities for the organization going forward.
In the cited article, the authors talk about how Apple, Adidas, Lego, Burberry and others came to a point where each company:
…realized that it had a distinctive history rich with memories, experiences, and signature processes that could be used to design the future — not through a slavish adherence to tradition, but through thinking differently about strategy, innovation, and products.
People and organizations all go through moments when they fail. Sometimes organizations never recover and slowly become irrelevant to their stakeholders. Case in point: Netflix vs. Blockbuster.Embed from Getty Images
Last year at the Peter Drucker Global Forum I heard Nilofer Merchant talk about “seeing around corners” in order to understand what we should expect as leaders of organizations. For those companies who have a legacy, a history, a track-record, a story, a “tribe” – sometimes it is a matter of looking at “signature” products/services/processes/experiences in a new way. Successful businesses (past, present and future) connect with stakeholders in a unique way: bringing out the best and brightest of the brand, its clients and the overall organization.
Even the best laid plans have a way of becoming sidetracked by reality. The best analysis and risk mitigation measures can’t predict or control the future no matter how good the team, the project framework or the tools utilized. There’s an uncertainty about life that makes it gorgeously exciting.
When I took the last bus to the town of Lican Ray in Chile during a hiatus from studying at the University of British Columbia (Canada), I chose to get sidetracked, to break away from the norm, and, in the words of the Robert Frost to take “the path less travelled”. But can we apply that same thirst for adventure, quest for knowledge, interest in the unknown to our organizations today? Can we “plan” for the unexpected – not only in terms of risk management but also in terms of embracing the benefits of clashes of ideologies, of frames of reference and of ideas?
By laying the groundwork for innovation and growth to occur as a result – and not just in spite – of changes to the status quo, organizations can be better equipped to be part of the future. One way of doing this is by listening – to customers, competitors, analysts, stakeholders – effectively. Understanding, in the words of Simon Sinek, the “why” behind the product or service and what need, desire or aspiration it fills or seeks to fill.
Another way is by stripping away ego in order to become, once again, like hungry entrepreneurs – vying for the opportunity to show a solution to a problem that no one knew they had. Some organizations promote “intrapreneurship” or recruit talent that proves to be “entrepreneurial”. Others purchase entrepreneurial companies or startups – as much for strategic positioning in their industry as for the technology and talent they acquire through the purchase. Still others create innovation centers or tap into startup hubs to try to replicate the entrepreneurial energy and drive to succeed even before “success” is palpable.
A third way of laying the groundwork to leverage change is by being the change ourselves; looking at what has always been done and doing (strategically) something new. A recent example of this is Elon Musk’s June 11 blog post announcing that all of Tesla’s electric car patents have been removed “in the spirit of the open source movement” and “for the advancement of electric vehicle technology”.
I think there’s a balance between planning for the future and embracing the unplanned opportunities that present themselves; opportunities to learn, collaborate, and change. And it’s a focus on opportunity – coupled with talent and belief in a shared vision – that makes organizations able to survive, and to thrive on, changes to the status quo. Planning will always have its place; but in a world full of complexity and wonder, so will change agency (being agents of change).
Richard Branson said that “opportunities are like buses, there’s always another one coming” but I am glad that I caught that last bus to Lican Ray because taking the road less travelled sometimes makes “all the difference.”
NOTE: This piece was originally published in June 2014 on LinkedIn “Pulse”.
What do you think? Is it possible to build an organizational culture that thrives on change? How do you leverage the opportunities that come from change in your organization?
One of the most valuable lessons I have learned in the last eight years is that the valuation of a company is based on the story that is being told about its future.
Our sense of reality – our idea of what has actually taken place – is filtered through our experiences. Most of you will agree that two people can observe the same event and come out with different accounts of what happened based on a personal bias. The same holds true for an investor or partner in a business; their experience informs their decision making. Their experience with a company in the same industry, or with the same management structure, or with a similar channel strategy, or “what happened” 10 years ago, convinces them that their past experience will transfer to the new project or business.
On one hand, it’s humanity’s way of coping with new things. We look to the past in order to inform future decisions. When performing a valuation of a company, most investors take a number of factors into consideration in order to balance bias and risk. Nevertheless, we always take the future back to the present or project the past to the present in order to know how much a business, idea or project is worth in today’s world.
What do we pay today for a dream? If an entrepreneurial idea does not fit our past experiences – whether we are a seasoned investor or an amateur – how do we value the company?
Our story is essential in convincing amateur or professional investors and partners. Yet, even with an amazing story, bias still plays a critical part in valuation and decision making. What happens after we tell a story that leaves an investor wanting more? The professional investor might be thinking “how much will I get when we go public or in round two” rather than “this is going to be interesting” (a trademark of an amateur investor according to Seth Godin’s presentation in “Nearly Impossible”).
We are always told to look to the future and we tell our children to do the same. Nevertheless, many times we base investment – and even life – decisions on the past. What is the price of your dream?
Suffering, patience, self-negation, are part of the life of an entrepreneur and often the price we pay for our dream. Money is not always the objective of our venture but it certainly is what it comes down to when we are talking about investment. Sad but true. Simple but not inclusive. Cents over sacrifice.
Net Present Value. Future cash flows. Debt and working capital. Sweat and sacrifice. What do we pay today for a dream? Sometimes the craziest dreams run by risky entrepreneurs are the ones that win. How do we make sure that the best idea wins? There really is no formula for success – however convincing your story or however poor your track record. Sometimes the best ideas look like bad ideas and sometimes disruption occurs undetected until it has slowly and fundamentally transformed an industry.
One thing is certain however. We look for value and relevance. If your story shows your investor that your idea is valuable and is relevant in the lives of people, you may just have a way of selling your dream and getting the much needed capital to make your venture grow, prosper and be valuable to you, your investor and the people you serve.
“The future is already here — it’s just not very evenly distributed.”
— William Gibson
“Los innovadores fijan su mirada hacia el futuro y la posibilidad de que mejores modelos existan.”
“Innovators fix their eye on the future and the possiblity that better models exist.”
Source: Esther Clark, “Modelos opuestos como fuente de innovación”, Insights Magazine, Edición 7, 2014.