Self-Understanding for Opportunity Creation

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Chapter 2: Practicing Entrepreneurship

Notable Quote

“You may have wondered why so many things seem to be harder and take longer to accomplish than you would like—and why both things seem to be increasing. We don’t have the answer in every case, but here is an explanation that probably covers the majority of situations: the way we have been taught to solve problems was designed for a different world. To deal with uncertainty today, we need a different approach.”

Leonard A. Schlesinger, Charles F. Kiefer, and Paul B. Brown, authors

Neck, Entrepreneurship. © SAGE Publications, 2018.

2.1

Compare and contrast the prediction and creation approaches to entrepreneurship.

2.2

Create a portfolio of five skills essential to building a mindset for the practice of entrepreneurship.

Neck, Entrepreneurship. © SAGE Publications, 2018.

Learning Objectives

2.3

Distinguish between entrepreneurship as a method and the process of entrepreneurship.

2.4

Illustrate the key components of the practice of entrepreneurship.

Neck, Entrepreneurship. © SAGE Publications, 2018.

Learning Objectives

2.5

Assess the role of deliberate practice in achieving mastery.

Neck, Entrepreneurship. © SAGE Publications, 2018.

Learning Objectives

2.1 Two Main Perspectives on Entrepreneurship

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Prediction Approach

Views entrepreneurship as a linear process where steps are followed and outcomes would be predictable.

Works best in times of certainty

Two Main Perspectives on Entrepreneurship

Prediction works best in times of certainty and when there is access to existing information and data upon which to base decisions. Prediction is the dominant logic of large, established organizations, where goals are predetermined, issues are transparent, and information is reliable and accessible. Under these circumstances, it is relatively straightforward to analyze a situation, define problems and opportunities, and diagnose and find solutions. Big organizations can use sophisticated planning tools to analyze past and present data in order to predict any shifts in the business landscape. Yet, this process is by no means foolproof, as demonstrated by many well-planned initiatives backed by large companies that do not end up succeeding.

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Creation Approach

Views entrepreneurship as a method that requires practice

Building a future through trial and error

Theory of effectuation: the future is unpredictable yet controllable.

Two Main Perspectives on Entrepreneurship

The creation approach is employed in times of uncertainty. For example, imagine that a couple of friends show up unexpectedly at your door one evening. Everybody is hungry, so you go through your kitchen cupboards to see what ingredients you can throw together to prepare a satisfactory meal. This is a simple example of creation thinking—creating something without a concrete set of instructions.

Table 2.1: Prediction and Creation

Credit: Sarasvathy, S. D. 2008. Eff ectuation: Elements of Entrepreneurial Expertise. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing; Schlesinger, L., Kiefer, C., and Brown, P. 2012. Just Start: Take Action, Embrace Uncertainty, Create the Future. Cambridge, MA: Harvard Business School Press. http://www.e-elgar.com/

Neck, Entrepreneurship. © SAGE Publications, 2018.

Two Main Perspectives on Entrepreneurship

Figure 2.1: The Creation Approach in Action

Neck, Entrepreneurship. © SAGE Publications, 2018.

Two Main Perspectives on Entrepreneurship

What strengths and weaknesses do you see in the creation view of entrepreneurship? Give some examples that would apply to real life.

Neck, Entrepreneurship. © SAGE Publications, 2018.

2.2 The Five Skills Most Important to the Practice of Entrepreneurship

The Five Skills

Play

Experimentation

Empathy

Creativity

Reflection

The Five Skills Most Important to the Practice of Entrepreneurship

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Skill of Play

Frees the imagination

Opens up our minds to opportunities

Helps us become more innovative

The Five Skills Most Important to the Practice of Entrepreneurship

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Skill of Empathy

Understanding the emotion, circumstances, intentions, thoughts, and needs of others.

Allows you to connect with potential stakeholders.

Can help identify unmet needs

The Five Skills Most Important to the Practice of Entrepreneurship

Neck, H. Entrepreneurship Requires Practice: Part 1—The Five Practices. Forbes, September 9, 2014. Accessed October 4, 2014. www.forbes.com/sites/babson/2014/09/09/entrepreneurship-requires-practice-part-1-the-five-practices

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Skill of Creativity

Requires openness to the world

Entrepreneurs create opportunities instead of looking for them

Taking action under conditions of uncertainty

The Five Skills Most Important to the Practice of Entrepreneurship

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Skill of Experimentation

Acting in order to learn

Collect real-world information

Test new concepts

Asking questions

Validating assumptions

Based on action not research

The Five Skills Most Important to the Practice of Entrepreneurship

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Skill of Reflection

Helps critically analyze our feelings and knowledge

Provides new perspectives

Evaluate outcomes

Draw conclusions

The Five Skills Most Important to the Practice of Entrepreneurship

In spite of the benefits of reflection, and the substantial amount of research that supports its importance, we don’t seem to practice it very much at all. When asked to reflect, we often don’t really know how. Without intentional and focused reflection we simply simulate writing in a diary or journal, which is interesting practice, but it doesn’t help us really learn from our actions.

Neck, Entrepreneurship. © SAGE Publications, 2018.

Ways to Practice Reflection

Narrative reflection

Emotional reflection

Perceptive reflection

Analytical reflection

Evaluative reflection

Critical reflection

The Five Skills Most Important to the Practice of Entrepreneurship

Neck, H. M., Greene, P. G. & Brush, C. (2014). Teaching Entrepreneurship: A Practice-Based Approach. Northhampton, MA: Edward Elgar Publishing; Brockbank, A., and McGill, I. 2007. Facilitating Reflective Learning in Higher Education, 2nd edn. New York: Open University Press.

Figure 2.2: The Five Most Important Skills to the Practice of Entrepreneurship

Source: Neck, H. M., Greene, P. G., & Brush, C. (2014). Teaching entrepreneurship: A practice-based approach. Northampton, MA: Edward Elgar.

Neck, Entrepreneurship. © SAGE Publications, 2018.

Do desirable qualities in an employee differ from desirable qualities in an entrepreneur? If so, how? Explain your answer and give examples.

2.3 Entrepreneurship Is More A Method Than a Process

Neck, Entrepreneurship. © SAGE Publications, 2018.

Processes and Methods

The process approach involves planning and prediction.

The method approach involves trial and error, requiring iterative learning, practicing, and reflecting

Entrepreneurship Is More A Method Than a Process

Entrepreneurship is certainly not linear or predictable; it is ill-defined, unstructured, and complex. In fact, some statistics shows that 8 out of 10 entrepreneurs who start businesses in the US fail within the first 18 months; others show that most failures occur in the first two years of business.

Wagner, E. T. Five Reasons 8 out of 10 Businesses Fail. Forbes, September 12, 2013. Accessed October 4, 2014. www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/,

Campbell, A. Business Failure Rates Highest in First Two Years. Small Business Trends, July 7. 2005. Accessed October 4, 2014. http://smallbiztrends.com/2005/07/business-failure-rates-highest-in.html

Table 2.2: The Traditional Steps of an Entrepreneurship Process

Neck, Entrepreneurship. © SAGE Publications, 2018.

Entrepreneurship Is More A Method Than a Process

Table 2.3: Assumptions Underlying The Practice of Entrepreneurship

Source: Neck, H. M., & Greene, P. G. (2011). Entrepreneurship education: Known worlds and new frontiers. Journal of Small Business Management, 49, 55–70. Credit: Neck, H.M,., and Greene, P.G. 2011. Entrepreneurship education: Known worlds and new frontiers. Journal of Small Business Management, 49(1), 55–70. Reprinted with permission from John Wiley & Sons

Neck, Entrepreneurship. © SAGE Publications, 2018.

Entrepreneurship Is More A Method Than a Process

Table 2.4: Method Versus Process

Neck, Entrepreneurship. © SAGE Publications, 2018.

Entrepreneurship Is More A Method Than a Process

Credit: Neck, H. M., Greene, P. G. & Brush, C. (2014). Teaching Entrepreneurship: A Practice-Based Approach. Northhampton, MA: Edward Elgar Publishing. http://www.e-elgar.com/

2.4 The Practice of Entrepreneurship: An Introduction

Neck, Entrepreneurship. © SAGE Publications, 2018.

The Practice of Entrepreneurship

Emphasize early action over planning

Do what you can; try what you can’t

Try early

Fail sooner

Experiment with many new ideas simultaneously

The Practice of Entrepreneurship: An Introduction

Give an example of how an entrepreneur has solved a problem. Discuss how failure and reflection could have led to the solution. What would you have done in such circumstances?

Neck, Entrepreneurship. © SAGE Publications, 2018.

Eight Components of the Practice of Entrepreneurship

Reflect on your desired impact on the world.

Start with means at hand.

Describe affordable loss.

Calculate the idea today.

The Practice of Entrepreneurship: An Introduction

As you continue with the practice of entrepreneurship, you’ll find that your affordable loss changes (usually increases) with each action. Why? Your idea receives greater validation, you have a solid and growing knowledge base, more people have joined your team, resource stocks increase, and your overall confidence in your ability to act grows. Through the practice you will manage to deal with extreme uncertainty, control it, and use it to help you create what others cannot.

Eight Components of the Practice of Entrepreneurship

Take small action.

Network and enroll others.

Build on what you learn.

Reflect and be honest with yourself.

The Practice of Entrepreneurship: An Introduction

Figure 2.3: The Practice of Entrepreneurship

Using the Practice to Achieve Ongoing Success: Tips from Baekgaard and Miller

Concentrate on what you do best

Don’t be satisfied with the status quo—innovate and practice continuous improvement

Choose the right people to work with: vendors, bankers, and employees

The Practice of Entrepreneurship: An Introduction

Santinelli, A., & Luecke, R. Vera Bradley (A). Babson Case Study #656-C-10, June 11, 2010.

Using the Practice to Achieve Ongoing Success: Tips from Baekgaard and Miller

Networking is important; it’s important when people like you and you like them

Don’t be afraid to take risks

Take one day at a time

Follow your passion and have fun!

The Practice of Entrepreneurship: An Introduction

Source: Baron, R. A., & Henry, R. A. 2010. How entrepreneurs acquire the capacity to excel: Insights from research on expert performance. Strategic Entrepreneurship Journal, 4: 49-65.

2.5 The Concept of Deliberate Practice

Deliberate Practice

A method of carrying out carefully focused efforts to improve current performance.

The Concept of Deliberate Practice

Table 2.5: Components of Deliberate Practice

The Concept of Deliberate Practice

Credit: Baron, R. A., & Henry, R. A. 2010. How entrepreneurs acquire the capacity to excel: Insights from research on expert performance. Strategic Entrepreneurship Journal, 4: 49–65. Reprinted with permission from John Wiley & Sons

Why Deliberate Practice?

It helps people “learn how to learn.”

It enhances perception, pattern recognition, and analytical skills.

No need to feel daunted—you can begin with transferable skills you already have!

The Concept of Deliberate Practice

The 3-Hour Challenge

MINDSHIFT: The 3-Hour Challenge

You may or may not have given a lot of thought to your entrepreneurial plans and goals. Either way, this activity will challenge you to clarify what plans and goals you have, and why.

You can commit to doing a lot of things for only three hours, so give this mindshift challenge a try. The three hours do not have to be spent in one continuous period. Doing it all at a stretch is probably not practical, so it is fine to spread out the time in one-hour increments, but don’t go past three days.

MINDSHIFT: The 3-Hour Challenge

Hour #1: Write down your impact statement. Keep in mind that this is something that drives your curiosity, motivation to engage, and enthusiasm. Your impact statement is not an idea; it’s a statement that expresses your desire of the type of impact you want to make as an entrepreneur.

Take a full hour to write down your impact statement. Give it deep thought and really ask yourself: What excites me? Write it as clearly, sincerely, and completely as you can.

MINDSHIFT: The 3-Hour Challenge

Hour #2: Share your impact statement with your classmates or others in your life, and try to find someone who shares a similar vision. Your goal is to find just one other person with a similar vision; but if you find more, that’s great too!

MINDSHIFT: The 3-Hour Challenge

Hour #3: Once you find your person, schedule a one-hour meeting. Meet someplace unusual, not in the same coffee shop or restaurant where you always go. Share where your desired impact is coming from, and identify three potential business ideas that the two of you could pursue together to fulfill your desired impact.

What assumptions and beliefs did you have before starting the 3-Hour Challenge?

MINDSHIFT: CRITICAL THINKING

In what ways did the 3-Hour Challenge confirm your existing assumptions and beliefs? In what ways did it change them?

MINDSHIFT: CRITICAL THINKING

What did you learn about yourself that was unexpected or surprising?

MINDSHIFT: CRITICAL THINKING