9 - Strategic Entrepreneurship
The origin of the word "entrepreneur" comes from the entertainment industry: it was a person who would organize a commercial performance: hire the talent, arrange the venue, and promote the event. For lack of a better term, this title was borrowed to indicate a person who starts a new business or launches a new product line - though the connotations of entrepreneurship as frenzied, short-term, and temporary activities remain.
"Entrepreneurship" is generally perceived as being a creative and strategic process - but it is entirely possible to launch a new product without being particularly creative or strategic (merely copying the competition by making minor changes). As such, this chapter will take a closer look at the entrepreneurship to better understand the concept and its various manifestations.
The Inventor and the Entreprenuer
A creative idea has the potential to be built into a successful business endeavor, but this does not occur automatically, and it takes a great deal of work. Recall the instances in which one firm or individual had a great idea but failed to capitalize on it effectively, only to be surpassed by another firm that did not originate the idea, but was able to deliver it to the market.
It's suggested that this is the reason that the inventors of great products are often practical men who are not academics. Academic scientists discover things, then move on to discover other things, rather than investing the effort in finding a practical application for their discoveries (not to mention finding a way to mass produce, distribute, and market them).
This constantly chafes the academic types, who feel that their discovery merits a great deal of attention and credit, and a goodly share of the income derived from all the additional work that must be done to deliver the value of their discoveries to consumers.
Two lists are presented - one list of great inventors and another with great entrepreneurs - and the authors suggest that most readers would probably be more able to recognize the entrepreneur than the inventor. (EN: which is presumptuous and not very scientific, but likely correct - people remember the brands they encounter in their daily lives better than names that they noticed once in a history book or news story)
But to give the inventors their due: while the creative act of the inventor delivers nothing to the market, it is nonetheless necessary for the entrepreneur to have something to deliver to the market.
The Five Angles of Strategic Entrepreneurship
In addition to the consternation of the academic community, entrepreneurs are often kept at arm's length by the "business" community, who feel that entrepreneurs are flighty and fanciful "idea men' who lack the discipline to manage the ongoing operations of a business. The acrimony is entirely mutual, in that entrepreneurs regard business managers who are dull types who are good at routine tasks, but lack creative vision. Unfortunately, this contention creates a schism that prevent them from effectively collaborating.
In 1977, Frederick Webster published an article that described various categories of entrepreneur (the independent, cantillion, industry-maker, administrator, and small-business owner), and schematized them as phases in a process, suggesting that some activities were abandoned as a business progressed from one stage to the next. The limitation to this perspective is that it results in the assumption that a business, once built, has no further need to change or evolve.
As such, the authors consider these five aspects to be "angles" rather than roles or phases, which are applicable to any form of innovation.
Recognition
Recognition corresponds to the moment that a person who has been observing or studying something comes to the realization that there is a connection that has potential. It can occur the instant something is learned, but it often happens "on the fringes" of deliberate thought, when the mind wanders and finds unexpected connections.
Development
Once an idea bubbles up, it then becomes necessary to follow through and apply a more deliberate process of thought to develop the idea into a plan - to flesh out the idea, and develop it in breadth and depth. Essentially, this is placing the idea into the context of the existing world to determine where it is relevant, and where potential exists for it to be applied to generate positive outcomes.
Evaluation
After fleshing out the idea, there is a point at which a decision must be made to pursue it further or abandon it to shift energy to other ideas. The potential of the idea is established, but the practical requirements of acting upon it are assessed. Can it be done at all? Do the benefits outweigh the cost?
Effective strategists "seem to have good instincts" when it comes to evaluating ideas, and they also draw upon a network of people to provide feedback and assist in assessing the idea. There are critics who can spin up a basic idea and make it more elaborate and loftier, others who help to pare it down and ensure it remains grounded in the real world.
In the corporate environment, it is important to consider the return that an idea can produce, in terms of increasing revenue or decreasing costs, against the possible cost of implementation. The profitability of the idea must also be applicable at the appropriate scale or volume.
Finally, the idea should be evaluated by stakeholders: a person who had the idea might think it's brilliant, but unless the people who participate in its execution agree, it will not succeed.
Elaboration
The elaboration of an idea involves working out the details to implement it. This step can be likened to planning out the architectural diagram of a building that makes sure it is structurally sound and plans out the fine details, down to the number of nails it will take to build it, making adjustments as necessary along the way.
Many ideas founder in the elaboration stage, when the enthusiasm of discovery has worn off and all that remains is the very tedious work of making it a reality. In other instances, elaborating upon an idea requires the input of experts.
Elaboration is the beginning of the transition from inspiration from implementation - the detailed plan undergoes a more formal validation procedure in order to gain authorization and funding to be put into action.
(EN: Ultimately, the amount of elaboration necessary depends upon the level of detail it requires to appease those who authorize expenses. Depending on the culture of the organization and the amount that implementation will cost, not much elaboration will be necessary and a manager can get a significant sum to spend on a plan that is half-baked and loosely defined.)
Implementation
Ultimately, the goal of any creative strategy process is to effect a change by putting a plan into action. The change must be "sold" to the organization, those whose participation is necessary must be trained and encouraged, and the early progress of the plan must be monitored.
During the early stages of implementation, there will need to be flexibility to make tactical adjustments to address unforeseen circumstances - but eventually, the "new idea" becomes and established routine and part of the normal operations of the business.
From Cycle to Interconnected Star
The five "angles" have been described in a chronological fashion, which may lead to the notion that they represent five tasks that are done in a process and must be handed from one specialist to another in production-line fashion. That can be done, but is not necessarily so - the skills needed to do each of the five steps are likely evident in all people, though they tend to be strong in some areas and weak in others
Many entrepreneurs stay engaged throughout the entire cycle - such that a single person may have had a bright idea, developed it into a workable business plan, got expert input to confirm and refine the plan, built it as a business, and stayed on to run it. In much the same way, many small business owners begin with the idea for a business and then build and operate it. Whether this results in a one-man business or a global corporation, the fundamentals are the same.
It is also necessary to consider the entire process rather than focusing on the individual angles - entrepreneurship is a "dynamic, interconnected network" in which there are connections and interactions among the different phases or nodes: the best results are achieved by ensuring that the system works as a whole (which is strategic), rather than focusing myopically on one specific part (which is operational).
The Strategic Entrepreneur as "Diligent Dilettante"
Successful entrepreneurship requires managing a paradox, between being tightly focused on reality (diligent) while still being able to be unfettered enough to explore imaginary possibilities (dilettante). For some, they are too rooted in the mundane to go on a flight of fancy at all, so they are unable to discover or innovate. For others, they are too flighty to come back to ground level, so they have no problem coming up with impractical ideas, or even if they are practical, they lack the discipline to carry through.
In practice, the entrepreneur must make a switch from exploring limitless possibilities to dealing with the granular facts of mundane reality. It's not as simple as a hand off, as the ability to imagine and envision is needed throughout the process, albeit in decreasing amounts, as more of the work requires more diligence in ensuring the idea is sound and practicable. Getting the right balance of diligence and imagination at the varying stages is a delicate but critical matter.
(EN: My sense is that the author is attempting to avoid a black-or-white fallacy, suggesting people are completely mundane or completely imaginative, but tends to fall back into the mode of personifying the mental tendencies, drifting back toward polarization.)