THINK LIKE AN ENTREPRENEUR
Entrepreneurs are not risk-takers; they are just good at reducing risk, says Charles Kiefer, , President, Innovation Associates
When Charles Kiefer and Leonard Schlesinger wanted to bring out their new book on how to function effectively when faced with uncertainty, they realised that the best way to do it was to do exactly what they advocate: Just Start.
Schlesinger, president, Babson College
and Kiefer, president, Innovation Associates had been exploring theories on how
entrepreneurs think and were keen on publishing what they had learnt. “We
decided the best way to get more information out there was to teach it and
started holding monthly seminars. We put our own twist on ideas and a robust
model emerged, built and tested on 100 entrepreneurs and entrepreneur families
that attended it,” says Kiefer.
They then got veteran financial journalist Paul Brown to
come in and help write the book, but when it came to finding a publisher, they
realised that the whole process could take a couple of years. “We didn’t want
to wait so long, and between us, we had the means to self-publish the book and
so we did just that, in a way, acting upon what the book was all
about,” he says.
about,” he says.
Once it was out, Brown took a copy of the book Action Trumps
Everything to a few publishers, and Harvard Business Publishing snapped it up
on the condition it be fleshed out a bit more.
And that’s the story of how Just Start: Take Action, Embrace
Uncertainty, Create the Future, a book that aims to teach people how to think
like entrepreneurs came about.
Kiefer, a serial entrepreneur of sorts, having started three companies in the past, talks about how he was never comfortable with the perception that entrepreneurs are risk takers. “I never thought of myself as a risk-taker, and turns out, most entrepreneurs are not. Studies show that in fact they tend to be risk averse. They are just good at reducing risk,” says Kiefer.
According to the authors, the problem, in part lies with our education system which has shaped how we think. It works on the assumption that we live in a predictable world and we are taught how to think in a situation where we know what the future holds, but the reality of course, is far from it. “We have learnt to think our way into the future and plan ahead, but none of it helps when faced with the unknown. Processes break down and no amount of thinking and planning will help,” says Kiefer.
This is where knowing how an entrepreneur thinks helps. Fundamentally, an entrepreneur is dealing with the unknown, and still taking decisions, which often enough, work in his favour. And right now more than ever, people need to know how to move ahead when the future is uncertain.
The process itself sounds straightforward: look at what information you have, decide what is an acceptable amount that you are willing to risk in trying out something, involve other people and see what happens. “This is the logic for navigating any situation in life successfully,” says Kiefer, adding that it is important to try and involve other people at this stage because what might be unknown to you, might be known to others and will eliminate the whole aspect of the unknown from the equation.
He stresses the importance of simply doing something. “Getting started is probably the hardest thing for people to do. Status quo is comforting and it’s not easy for people to start moving or get into action if not called for,” says Kiefer. It’s important to remember that till you don’t act, nothing happens. Once you do, reality changes.
If you want something and have the means to achieve it, the next step is setting an acceptably low cost threshold for yourself and acting upon it. If you don’t do it, it’s either because you don’t care enough about it, or don’t have the means to do it. In which case focus on finding the means, or if the next step is too big, think about how it can be broken down into a smaller more manageable step. It’s what they call the ‘Act-Learn-Build’ formula.
Where this book differs from most others is that it introduces the concept of desire. “It’s an additional dimension to the whole equation and that’s something they don’t teach you in b-school,” says Kiefer. But desire is at the root of wanting to do something, and needs to be seriously. Often, you may not be motivated to do something even if you have the means simply because you don’t want it badly enough.
To make this kind of thinking work in a large organisation, Kiefer once again comes back to the d-word. “Act like entrepreneurs in a large organisation only if
you care about it personally. If you don’t, there is no reason to go into the unknown. My current work is focussed on helping organisations learn this kind of thinking and it hasn’t been a happy marriage so far — the way they function tends to be inconsistent with this sort of thinking,” he says. The trick, if you do, lies in making it the situation acceptably low cost for you, your boss and the organisation. Build evidence that it works at a low level and get other people involved.
Finally, he warns against getting to carried away and using this method irrespective of the situation. We operate across the entire spectrum of situations in life which range from totally predictable to completely unpredictable. “It’s not that predictive thinking is bad. When you can, predict your way. But remember that trying to employ tools of predictability in an unpredictable situation is nonsense,” he cautions.
Kiefer, a serial entrepreneur of sorts, having started three companies in the past, talks about how he was never comfortable with the perception that entrepreneurs are risk takers. “I never thought of myself as a risk-taker, and turns out, most entrepreneurs are not. Studies show that in fact they tend to be risk averse. They are just good at reducing risk,” says Kiefer.
According to the authors, the problem, in part lies with our education system which has shaped how we think. It works on the assumption that we live in a predictable world and we are taught how to think in a situation where we know what the future holds, but the reality of course, is far from it. “We have learnt to think our way into the future and plan ahead, but none of it helps when faced with the unknown. Processes break down and no amount of thinking and planning will help,” says Kiefer.
This is where knowing how an entrepreneur thinks helps. Fundamentally, an entrepreneur is dealing with the unknown, and still taking decisions, which often enough, work in his favour. And right now more than ever, people need to know how to move ahead when the future is uncertain.
The process itself sounds straightforward: look at what information you have, decide what is an acceptable amount that you are willing to risk in trying out something, involve other people and see what happens. “This is the logic for navigating any situation in life successfully,” says Kiefer, adding that it is important to try and involve other people at this stage because what might be unknown to you, might be known to others and will eliminate the whole aspect of the unknown from the equation.
He stresses the importance of simply doing something. “Getting started is probably the hardest thing for people to do. Status quo is comforting and it’s not easy for people to start moving or get into action if not called for,” says Kiefer. It’s important to remember that till you don’t act, nothing happens. Once you do, reality changes.
If you want something and have the means to achieve it, the next step is setting an acceptably low cost threshold for yourself and acting upon it. If you don’t do it, it’s either because you don’t care enough about it, or don’t have the means to do it. In which case focus on finding the means, or if the next step is too big, think about how it can be broken down into a smaller more manageable step. It’s what they call the ‘Act-Learn-Build’ formula.
Where this book differs from most others is that it introduces the concept of desire. “It’s an additional dimension to the whole equation and that’s something they don’t teach you in b-school,” says Kiefer. But desire is at the root of wanting to do something, and needs to be seriously. Often, you may not be motivated to do something even if you have the means simply because you don’t want it badly enough.
To make this kind of thinking work in a large organisation, Kiefer once again comes back to the d-word. “Act like entrepreneurs in a large organisation only if
you care about it personally. If you don’t, there is no reason to go into the unknown. My current work is focussed on helping organisations learn this kind of thinking and it hasn’t been a happy marriage so far — the way they function tends to be inconsistent with this sort of thinking,” he says. The trick, if you do, lies in making it the situation acceptably low cost for you, your boss and the organisation. Build evidence that it works at a low level and get other people involved.
Finally, he warns against getting to carried away and using this method irrespective of the situation. We operate across the entire spectrum of situations in life which range from totally predictable to completely unpredictable. “It’s not that predictive thinking is bad. When you can, predict your way. But remember that trying to employ tools of predictability in an unpredictable situation is nonsense,” he cautions.
THINK LIKE AN ENTREPRENEUR
More than how they behave, it’s how entrepreneurs think that sets them apart. Here’s what they do right:
• Their actions are rooted in personal desire
• They act quickly with the means at hand
• Each step taken is within their personal acceptable loss
• They bring others along
• They learn and build on what they find
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