The Purposeful Entrepreneur
Me sharing some views on teams and management, the original of this article is here : http://www.innovationmanagement.se/2011/03/15/the-purposeful-entrepreneur/
What makes an entrepreneur’s decision making different from an executive’s and can the two ever meet? We asked investor and start-up champion Tony Fish to explore entrepreneur vs. executive innovator as he prepares to launch a novel new digital collaborative incubator in London. We asked Tony to describe the entrepreneurial decision process and how it relates to executive decision making.
My decision processes tend to be biased towards serendipity (connection) over business plan, purpose over profit, and team over individual. A corporate executive, driven by the vision of his company CEO, is led from the top. Theirs is a world of structure, policies and push; there is a need for plans and approval, controls and processes. This core thrives on stability, sameness and routine.
My entrepreneurs’ world is driven by edge people who are outside of the core, thriving on energy from creativity, instability, disruption, change, and who share an idealistic outlook and purpose and who understand the new world of ‘pull’.
In the start-up world there are less facts, there are more risks, there are more unknowns and that makes decision making different and lends itself to the need to base many judgements on personal bias. My bias tends to lean towards the team. Which is why the mantra by all investors “Team Team Team” is so sound. I have three insights on teams.
- Team is more than one – team has no “I” in it – rather dull I know, but I have to say it so often that it is still current
- Team is more than skills – I can find a very skilled monkey. The attributes I value in a team are continual learning, adaptability, iteration, acceptance, openness, transparency, honesty and directness. I put these team characteristics above having the best skills. A phrase I am known to use is “you need to throw away your childish ways (best skill, I, hide, lie, closed, mine, hidden) before you will come up with an innovative businesses rather than just a bright idea”
- Team is more than trust, it needs method and approach. This is the one that separates the “grown ups from the children” and is the one that corporate people just do not get. Edge people (creative and innovative people) will not work within a corporate structure because their personal methods and approaches are not process driven, as they will only work for this case, at this time with these constraints.
So on innovation, the reality is ideas are always in abundance. Execution is everything. Execution is what matters. Execution is people (teams) and very few people (teams) can really execute or know what it means. There is a fine line between taking risks to build a company and taking risks that destroy a company and the fine balance lies in the team’s ability to execute.
Corporate citizens suffer as they tend to start with ‘NO’ and why not and then justify that position because once a decision is made it is hard work to change it. Whereas execution people start with yes, now how do I do it and is the risk acceptable and manageable. Execution teams will also change their minds as they need to.
I believe that my success in innovation without pain is born out of me discovering how I work (method/ approach) and finding people with a similar method/approach. To me that is more of the essence of success than searching for the next bright idea.
I am aware that some corporations are taking VCs on to their boards in an attempt to generate more edge thinking or to bring a different focus to decision making. Do I think this is a good thing or necessary? Absolutely not! Some corporations are good at stable, process, routine and don’t need the massively disruptive nature of someone who is always at the edge of reason.
The corporates who are serious about innovation will have a totally different board and governance structure as one person sitting on the sides will not change the status quo. The changes for an innovative corporate will be dramatic as there will no strategic alliances, joint ventures, partnerships or CFO. Branding, financial controls, sales and operations will be run by one person with single responsibility not a team who will fight.
The innovative corporate CEO will focus on purpose, innovation, R&D, marketing and strategy. The CEO will move from the ivory tower to sitting in the lab with the top team.
This is wholly different from the a traditional corporate CEO who owns vision, strategy and is leading strategic alliances, joint ventures and partnerships. All of these normal corporate activities are avoided as they are diversionary and only seek to encourage delay and time wasting. Along with banning all diversionary corporate ego activities there is the matter of the CFO. All too often a CFO will serve two key purposes: best structure and saying no then asking why.
Innovation, like marketing, are the nightmare of a top CFO who wants stability, cost controls, understanding and justification for the future commitment of resources and delivery to stakeholders. Therefore have a great accountant, if not several, but along with dumping corporate activities, drop the CFO. With the CEO focussed on purpose, innovation, R&D, marketing and strategy they will now find a right hand person to oversee branding, financial controls, sales and operations for all traditional (core) business. With operations run by one person, with single responsibility not a team, there is no political fight and focus can be on where it needs to be – creating the new!
So what I am working on? I wish we had another word for incubator but it is OK as long as we can evolve the concept further than your current 2001 definition. We have an evolution of the original incubator concepts. Out has gone group legal, sales, marketing and finance offered as a core service to start-ups – that’s the way it used to be. Out has gone selection and single funds. In has come collaboration and co-operation and that’s where we as edge thinkers specialise.
The concept we are bringing to market is based on previous learning. Our new building and its incubator space will be open – in the sense of no walls. (And opens 16th May 2011....)
It will be open desk, but not hot desk as there will be a quiet work area and a noisy play area allowing companies to chop and change based as what they need. It will have a venture pavilion for any interested VC or angel to start to build relationship, everyone is welcome. The community will eventually decide on how long companies can stay. The community will help in selection if space becomes sparse.
The big difference between this collaborative incubator and a single enterprise one is focus. We don’t know who will meet whom and with whom we will jointly create something in any digital space or when it will occur. A corporate incubator or collaboration space needs targets, output, measures and will focus on a problem they think they have rather than on one that creates value. That’s a big difference.
To round up, the question I pose to any board faced with “what do we do for an innovation strategy?” is “Why” as I would want to explore if someone on the board has a problem with what the company is doing, what would innovation achieve, can we buy something, why now, who’s asking or telling?
Innovation is not about having a bit of fun on the side – it is a way of life and to become innovative the board probably has to resign!