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Think like an entrepreneur

Saras Sarasvathy, a professor at Darden School (University of West Virginia), undertook some research to see if entrepreneurs thought, acted and decided differently. Her conclusion was that this is the case. At its most basic level, she says that rather than set a goal and work out how to get there, entrepreneurs start with the means at their disposal, collaborate with others and go on a journey to see where they end up. Her work has attracted much attention and is taught in many entrepreneurial courses the world over. The process is portrayed below (you may need to click on the picture for a clear view):

effectuationI have read her research papers and various other materials, but the best explanation of her process I have come across is displayed in this video from the University of Gallen:

The 10 myths of entrepreneurship

 

So, through trial and error, together with discussion with stakeholders and customers, and a clear understanding of the means at your disposal, you develop a new product or business even if your original goals need to shift substantially in the process.

At Genesis we have a view on Saras thinking – although it may go a little against the crowd at the moment. Although I am not certain how academically robust was her research, intuitively there are some great ideas embedded in the theory. Base your business on your own means (including competences), spend more time experimenting and market testing (than in-office analysis), share your ideas and get inputs, … these are all good. They also dovetail nicely with other entrepreneurial thinking such as that of Alex Osterwalder (Business Model Generation) and Steve Blank (The Start-Up Owners Manual). These concepts are particularly useful when dealing with “fuzzy” markets where you have really new products or are developing a new market or market niche.

Where do we think this could be dangerous? Taken to its extreme, we believe the process could lead to laziness and sloppy thinking if it is used totally outside causal thinking. We accept that a new start-up is not the same as a microcosm of a large enterprise, but there are some excellent analytical tools and strategic thinking that can play an important role in the entrepreneurial process. From the humble SWOT through Porters competitive strategy and on to Christensen’s disruptive technology – all could guide the process (depending on the venture) and could also help to reduce risks of ending up in the wrong place and/or with the wrong product.

Furthermore, one of the things that we believe is a characteristic of great entrepreneurs is to persevere and continue far beyond the point when other more “sensible” people have thrown in the towel. That attitude does not sit well alongside the idea that goals can be changed whenever things seem to be going against them.

 

Our conclusion, Saras has begun an interesting “movement” and there are many important principles that should be used in the “0 to 60mph” phase of the start-up. But do not throw the baby out with the bathwater – recognize that causal thinking, modelling and other scientific business principals can enhance the effectuation process.

We are about to launch a new company: Mashauri Limited aimed at helping entrepreneurs through the process from start-up to stable business where we have cobbled together a mixture of the types of thinking discussed above. We have produced a process that we believe will really enhance the entrepreneurial journey and greatly increase the chances of success. If you are an entrepreneur in the early stages of start-up and would be interested in trialling the product, contact me at sgifford@genesis-esp.com to discuss it.

 

 

 

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Flexible strategy in action – adapting the business model

Agile strategy
Adapting the business model to create flexibility 

Pop-up stores.

There has been much talk for the last decade about having an agile strategy or being a flexible company. This is seen to be even more important in crisis situations – such as much of the world is currently facing. However, although there is a great deal of information about the “why”, there is less about the HOW and far less about real case studies of such.. So when we came across this article about pop-up shops (Inc. mahgazine) we thought we should publicise it as an example of how this can work in practice.

The article discusses how a New York City beauty chain store launches pop-up shops (temporary shops) to capitalise on the Halloween season – with significant success. This may sound like a tactical or short-term move – but in reality it is part of their overall strategy and is carefully planned.

For us, there are 2 points of particular interest:

  • They use a model that seems to be more similar to a prototyping model than more traditional strategic models. They try, learn and refine based on their new knowledge.
  • It is built into their overall strategy. For instance, if a particular pop-up store is successful in attracting young females they may convert the temporary store into a permanent one as the location obviously works for their target market.

 

We recommend you read the short article (click on the link) and while doing so, consider whether or not there may be analagous things you might be doing to to generate new revenue streams – especially if you are suffering in the current crisis. Are there parts of your business model that may not be as “fixed” as you believe? (eg Do retail stores have to be permanent fixtures? Must you own manufacturing facilities or warehouses?)

 

Look out for the latest in our series The 7 Habits of Highly Effective Decision Makers: Habit 3 Using Visualisation. In this document, you will find ideas about using visualisation to stimulate creativity and innovation – which could be useful in thinking about your agile strategy (Habit 3 to be published tomorrow 11 October 2011)

 

If you would like to discuss how you might go about deciding whether you should make your strategy more agile or how you should go about it, drop Simon a line at sgifford@genesis-esp.com.

 

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HBR classic readings on strategy – supporting your strategic decisions

Key strategy readings – strategic decisions, business models, 5 forces, ….

Maybe you are a CIO trying to get to grips with strategy and how you should be influencing your own organisation’s strategic thinking. Perhaps you are a young, ambitious engineer with their first general management role. Possibly you are a CEO facing challenging times who needs to take time out to seriously reflect about the direction of their business. Or you could even be a seasoned strategy consultant who wants to recall the basics (and that is not a bad idea in this age of fast change and complexity).

Whatever category you fit into, skim through these Harvard Business Review Classics and stimulate your thinking about your business. Each article has a summary of the concept, the article itself and some suggested further reading. Below the image of the contents is a click-able link that takes you to a pdf with the set of articles. (Note clicking on the contents themselves only gives you a larger picture of the image).

The HBR Strategy Classics

 

At the moment, we at Genesis are finding ourselves in a number of conversations about business models – are they still valid? do we need to tweak our model? are we becoming outdated? can we use new tools and technologies to reinvent ourselves?

We would be delighted to have a conversation with you about your organisation and help you to DECIDE if, and how, you should be reviewing your business model – by using our own set of tools together with our expert Associates from a range of industries and disciplines.

Drop me a line at sgifford@genesis-esp.com and lets start a dialogue.

 

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Business models – some amazing resources

Business models – rock your world

You all know that the next one of the 7 habits series is due out soon and you all know it is about the power of visualisation in decision making. Well, for something to tantalise your imagination while waiting … think about the power of visualisation when it comes to developing  business models.

That may be defining, reviewing or refining your own. Or it may be a paradigm smashing, industry-disrupting model that is going to make Mark Zuckerberg say “WTF” (that may be rude, but those would be his exact words).

Well here are two neat resources to get you thinking:

A slideshare presentation that describes the top 10 business models of 2010 with an interesting way of portraying it:
Top 10 Business Models

A web-site discussing a book and a concept called Business Model Generation. It is obviously a promotion of the book but has plenty of interesting material that is useful in its own right including a 72 page preview
Business Model Generation
(And a quick acknowledgement to Xenia Viladas from XVDMC for directing me to Business Model Generation).

If you would like to discuss how we can help you make a decision on your business model (existing or new), drop me an email at sgifford@genesis-esp.com or give me a call.

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Intuition – more than trusting your gut

Intuition – more than trusting your gut.

Here is a link to a useful article written by Modesto Maidique (visiting professor at Harvard Business School) who talks about intuition and knowledge.

The core theme of the article is that intuition may be more than just gut. His examples show great “intutive decisions” often are accompanied by great knowledge of the subject matter as well. Additional examples show spectacular failure when this has been missing.

There is, however, a third ingredient and that is deep introspection as highlighted in the quote below.

 If you are going to understand the biases, emotions, and offsets of your decision-making compass which may effectually trump your domain knowledge and result in poor judgments, you must learn to “observe all men, but yourself most.”

Intuition is not just trusting gut by Modesto Maidique

If you would like to discuss how you could improve the decision making capacity and capability of your own organisation, please contact Simon Gifford at sgifford@genesis-esp.com.

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Value, values and ethical decisions

Value, values and ethical decision-making.

Below is attached a short commentary on an interesting article recently published by strategy+business that discusses whether or not we really do take ethics, social responsibility or the environment into account when making our purchases.

The commentary also asks some key controversial questions about the efficacy of socially responsible programmes – which we hope may stimulate some debate around issues such as women in business, affirmative action and launching environmentally-friendly products.

We continue to use innovatve techniques to spread our work wider than immediate clients. So….. you may click on the link below and download the article by “paying with a tweet” which creates a little buzz around the article by sending out a tweet (if you have a twitter account) or tells your friends about via your Facebook page. It is a small, discrete notice and takes 2 easy, risk-free steps to get there.

Pay with a tweet: download the “Value versus value article commentary”

If you are uncomfortable with the technology, simply go to the next link below that allows you to download the article without  any announcement.
Value vs values article commentary

Finally, here is a link to the original article itself.
values vs value original article

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The way we (used to) do things around here

The way we (used to) do things around here.
Reframing behaviour to make change happen

I recently came across this fascinating Booz & Co. article that discusses the use of neuroscience in making changes happen – at organisational and personal levels. We all have experienced times when we have tried to make personal changes and failed (New Years Resolutions as one example) or tried to make organisational changes and for some reason the changes do not happen or at least do not stick.

This article goes some way to explain why this happens, or does not happen. Although the use of neuroscience in assisting with organisational change is still relatively in its infancy, there are some interesting ideas put forward that can help us think about making organisational change stick.

I am certain that in addition to the above, this also has significant relevance in considering how we manage the behavioural pitfalls that await us when taking decisions. Much work has been done in identifying these challenges (e.g. anchoring and seeking confirmatory evidence), but far less done in what we do about these things. The “meta-thinking” (thinking about what we are thinking about) discussed in the article is one way of doing this.

Below is a link to a summary of the article and a second link to the article itself.

We at Genesis would be happy to have a discussion with you as to how these principals and ideas may be put into practice in your organisation (or your personal life) when taking strategic decisions – or in the implementation of such.

Reframing behaviour – Summary of “the way we (used to) do things” article

Article: The way we (used to) do things around here

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Challenges faced when taking strategic decisions: latest research

“Challenges faced when taking strategic decisions”.
Executive summary of global survey

“A critical factor in the success – and often survival – of any organisation lies in its ability to make effective strategic decisions. This skill is of increasing significance in today’s world, where the nature of these decisions is becoming more complex – as currently seen in the turmoil being experienced by the global economy.”

Below is a link to the Executive Summary of the results of our global survey into this topic. We hope you find the results both interesting and useful.

A copy of the full report will also be available on request.

Genesis Decision Survey Executive Summary December 2010

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The strategic risk most often missed by Boards and Executives

The strategic risk most often overlooked by Boards and Executives


I recently came across an article written by Deloitte Consulting entitled: ” Confronting assumptions to find risk and opportunity”. The slightly ponderous heading and somewhat academic style of writing however, did not manage to hide a number of excellent thoughts and ideas.

The attached document summarises those ideas and builds upon them to suggest a tool to reduce the likelihood of succumbing to that risk.

Strategic risk most often overlooked by Boards and Executives

 

Original article “confronting assumptions to find risk and opportunity”.

 

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Stress test your strategy

What critical decisions should you be taking to keep your strategy relevant in the economic crisis?

Executive summary of an article by Robert Simons, published in November 2010 edition of the Harvard Business Review.

Economic turbulence can quickly expose the weaknesses in a business strategy. To refine and hone it to adapt to the new circumstances requires us to make some tough strategic decisions. Robert Simons in his book “seven strategy questions: a simple approach to better execution” puts forward seven questions that we should be asking when undertaking a stress-test of our strategy.

Stress test your strategy

La prueba de esfuerzo de la estrategia