Can someone do my Week 3 discussion 1 in BUS 637 Entrepreneur/Intrapreneur!?

The_Greenhouse_Approach_Cultivating_Intrapreneursh..._----_CHAPTER_FIVE_-_First_Principles_Thinking_.pdf

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C H A P T E R F I V E

F i r s t P r i nc ip l e s Th ink i ng

We get through life by reasoning by analogy, which es- sentially means copying what other people do with slight variations. With first principles you boil things down to the most fundamental truths … and then reason up from there.

— Elon Musk A S K E P T I C I S S O M E O N E who questions whether or not it is possible to know something with absolute certainty. Seventeenth-century French scientist and philosopher René Descartes was such a skeptic that there was a form of skepticism named after him: Cartesian skepticism.

When Descartes came to the realization that many things he once believed wholeheartedly to be true could not be proven to be so beyond doubt, he was greatly distraught. He wondered, what do I know and how do I really know that I know it? All knowledge was a flimsy house of cards that rested on foundations of air!

He decided the only way to be sure he was not committed to false beliefs was to disbelieve absolutely everything until he could prove it to be true.

Descartes used the analogy of a basket of apples. If there was even one rotten apple in the basket, it could spoil all the apples. Assumptions were like the bad apple.

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Anand, Chitra. The Greenhouse Approach : Cultivating Intrapreneurship in Companies and Organizations, Dundurn Press, 2019. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/ashford-ebooks/detail.action?docID=5329791. Created from ashford-ebooks on 2024-07-12 00:41:53.

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Intrapreneurs go to the heart of a problem when trying to determine truths. Th ey never make assumptions, knowing that assumptions are simply that, and that facts and data are always what will prove to be the gateway to the most accurate decisions and outcomes.

When I worked at TELUS, I was involved in a very special project called “Upopolis” — a private social network developed for Canadian children in hospitals to help normalize their lives. Upopolis would facil- itate communication between children and their teachers, their friends, and their family members at home. A wonderful initiative, but when the project hit my desk, it was in only one hospital in Canada. Th e project had been passed around from person to person, and nobody wanted to work on it. Upopolis was deemed problematic, and it had lain dormant for months.

I was told the whole platform needed to be “redone.” It was built on poor technology, it was “unusable,” and hospitals had “lost interest.”

I took the project over and started to peel back the layers. I went back to the very beginning, did some research, started asking questions. I found out who the engineers on the project were, and I spoke to them about what was wrong with the technology. Th ere were fi fty outstanding software issues it turned out, so I began making phone calls and speaking with people. I built up a small, dedicated team. We went through every single problem one by one. Some were problems that had already been solved, and some were legitimate problems that we assigned engineers to fi x.

Th e main issue with Upopolis was that the project had lost focus. Many things that were deemed to be wrong with it were not, in fact, problems. People had just come to believe that they were. Th ey had made assumptions.

Within a couple of months, we had solved all fi fty issues. We then had a solid platform we could continue to deploy throughout hospitals in Canada.

We approached it from a very simple mindset. We went back to the beginning. What do you like about Upopolis? What could be better? What more could we do so that kids will use it? From there, we built a project plan and decided how we were going to tackle it.

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We had to stabilize the platform, create some interest, develop a de- ployment plan, and come up with an enhancement plan. We broke the plan into tasks with assigned responsibilities and dates so that we knew who was accountable for what. Slowly but surely, the plan was executed.

Our next task was to create interest. We reached out to hospitals. We made phone calls, set up meetings, and introduced administration to our new platform. Within a year and a half we were deployed in eighty percent of children’s hospitals in Canada, including SickKids — one of the largest children’s hospitals in North America. Th e project was a success; in fact, we were awarded the ITAC Corporate Heroes Award. Upopolis, once a program that was assumed to be irrelevant, had become a core pillar of TELUS’s corporate social responsibility initiatives.

People made a number of assumptions about Upopolis that were sim- ply not true.

Asking the right questions and going back to fundamental issues al- lowed us to set this project on the right path. I believe that this method, when practised with diligence, can set companies on the right trajectory to make better-informed decisions.

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A fundamental fl aw in many companies is that when making important decisions we assume we are dealing with facts. Often, we’re not. We’re mak- ing assumptions. Once an assumption enters the common currency of a company’s culture it is very diffi cult to root out as counterfeit. It looks and feels just like a fact.

In a world of high assumption-to-knowledge ratios, it is all too com- mon and too easy to fall down giant rabbit holes into a world of fantasy. Hard work is needed to replace fantasy with reality. When that happens, truths are revealed.

Here are some common assumptions I’ve heard over the years:

• Th ere is not a market for it. • It is too complicated. • It will never be approved.

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• Th at will be too time-consuming. • Th at will be too expensive to create. • You cannot scale it. • Th at idea has already been done.

An assumption-based culture discourages proactive and creative ap- proaches to performance. Assumptions are like lies. Once they have been uttered it’s hard to take them back. Even worse, assumptions gather mo- mentum; this is especially true when they justify the negative — like poor performance or lacklustre sales. It probably comes as no surprise that the companies that defend rule-based policies and procedures the most aggres- sively are the ones that are most dependent on assumptions. When there is much to lose, there is much to defend.

B E L I E F S A N D A S S U M P T I O N S

Our assumptions are the result of ideas and beliefs we’ve inherited over our lifetime. Our assumptions become so ingrained in us that we don’t question them. True or not, we accept and believe these things to be true.

As humans we naturally and regularly use our beliefs and assumptions to navigate our world. We must do so to make sense of where we are, what we’re about, and what is happening around us. We make assumptions when we don’t fully understand situations. We naturally tend to fi ll in bits of miss- ing information by making up our own story … to make sense of things.

Th e problem is that most of the time, our assumptions — the stories we tell ourselves — are simply inaccurate.

I can’t help but wonder how many great innovations were stopped in their tracks due to assumptions.

F I R S T P R I N C I P L E S T H I N K I N G

As we defi ned it earlier, a fi rst principle is a brute fact that cannot be re- duced any further. Th ink of it as a brick as opposed to a wall composed of bricks. First principles thinking involves analyzing a complicated problem and breaking it down to its basic issues. You can then work to solve these basic issues, which will in turn solve your initial problem. Th is is just as

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Descartes described with his apple basket analogy. Th is strategy exposes fundamental truths and encourages original solutions.

When Elon Musk was told that electric cars were too expensive for the average person to buy, he went Cartesian, and instead of accepting the knowledge of the crowd, applied fi rst principles thinking. He explained his process in an interview with Digg founder and GV, formerly Google Ventures, partner Kevin Rose: “Somebody could — and people do — say battery packs are really expensive and that’s just the way they always will be because that’s the way they have been in the past.”

Can you see the fl aw in that reasoning? How will we ever create things that never existed before if we base our innovations on old assumptions or preconceived ideas?

In that interview, Musk said, “If you applied that reasoning to anything new then you would never be able to get to that new thing. You can’t say, ‘Oh, nobody wants a car because horses are great and we’re used to them, and there’s grass all over the place, so people will never buy cars.’ And people did say that. For batteries, they would say, ‘Oh, historically, it has cost $600 per kilowatt hour, and so it’s not going to get much better than that in the future.’”

Musk explained that when he applied fi rst principles thinking to this issue he started to strip down the problems. He asked, “What are the bat- teries made of? What is the value of the components?” By doing that he broke things down and discovered that if he bought the diff erent compo- nents separately, batteries would cost only $80 per kilowatt hour.

When you break a complex problem down to its basic components, examine each and every one individually to see if earlier conclusions about them are, in fact, true, rather than based on assumption, you’re applying fi rst principles thinking. And fi rst principles thinking will always help you fi nd more effi cient and creative ways of doing things.

C L E A R B A N C

Clearbanc is a FinTech (fi nancial technology) company co-founded by Andrew D’Souza, Michele Romanow, and Charlie Feng. Broadly speaking, FinTech is an emerging industry where technology is applied in the fi nan- cial services industry. Th is technology is used to help companies manage

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the fi nancial aspects of their business, including new software, applications, processes, and business models. FinTech, in essence, is modernizing tradi- tional fi nancial services methods. Clearbanc provides funding to entrepre- neurs in the sharing economy (Uber, Airbnb). Funds are provided in the form of an advance, not a loan. Unlike big banks, which make lending de- cisions based on assumptions, Clearbanc uses a special revenue forecasting engine that analyzes real data, like the business’s history, its user reviews, and actual earnings. Th ere’s no credit check involved. Clearbanc’s model involves using fi rst principles thinking, peeling back the layers and deter- mining whether an entrepreneur is a solid investment or not.

I had the opportunity to sit down with one of Clearbanc’s co-founders, Michele Romanow, who is also a Canadian venture capitalist, tech entrepre- neur, and CBC Dragon. Romanow is on the list of 100 Most Powerful Women in Canada, recognized by the Women Executives Network, and was named as one of the Forbes Top 20 Most Disruptive “Millennials on a Mission.”

“If someone asks you if you went to the gym this morning,” she said, when we sat down for an interview, “you may say, ‘No, I slept in, but I really wanted to work out,’ but that’s not true. You didn’t really want to go, you wanted to sleep in, otherwise you would have worked out.”

Romanow explained that we answer that way because we think we should want to exercise. Th is is the same reason that we answer survey questions the way we think the survey wants us to answer. We feel like we’re being watched, so we think we need to answer the way the surveyor wants us to respond. She believes we only behave authentically when we’re not being watched.

For Romanow, one of the main sources of innovation blockage in large companies is the lack of freedom given to people to dig to the roots of problems. Employees are in constant fi refi ghting mode — obsessed with short-term targets and deliverables. As a result, people don’t know how to be innovative. Th ey make assumptions rather than ask questions, be- cause doing so makes them feel like they are being effi cient and produc- tive. Nobody is peeling back the layers to get to the truth of an issue. Th is process is time-consuming. But what if the truth is down one more layer?

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Humans are terrible predictors of success, and this is why assumptions are not eff ective in business. Who would have believed people would rent out space in their primary homes to strangers? People may rent their secondary residences, but there was an assumption that nobody would rent their pri- mary homes. But that was an assumption. Look at Airbnb.

You need to stop making assumptions and start applying fi rst princi- ples thinking instead. Here’s how you can start to do this in your company.

1. Ask the why. Romanow says that we must always ask why. Why this? Why is it done this way? Grind your way through solving problems. Ask your why four times in a row. You must go back and keep asking until you’re at the core of the problem and the nut is cracked. “We make assumptions because it is easy and not enough people are asking questions. It feels like we are being effi cient when we make assump- tions, but it often makes us revisit work.

2. Apply the process of iteration. You must allow your employees to iterate, to drill down, and to work through problems. You can’t base important decisions on assumptions — assumptions that something is too expensive or too diffi cult or too time-consuming. Remove all of the doubts and base your decisions on facts.

3. Focus more on execution. Apply fi ve to ten percent of your think- ing to strategy and the rest toward execution. We need to allow our teams to ask big questions, test, learn, and execute. When we spend too much time thinking against or around ideas instead of into ideas — fi nding out where they lead — we get stuck. We need to realize that to succeed it is crucial to only spend a small percentage of the time allotted to solving a problem on strategy; the rest of the time should be spent getting things done. Th is is where the facts will start to reveal truths on how to make work move.

First principles thinking will revolutionize the way you solve problems and the way you do business. If you stop basing your decisions on assump- tions, and instead boil ideas down to facts, imagine the innovation that will be possible. Remember, it is impossible to create something that has never existed before if we rely on assumptions and existing ideas.

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Now that we’ve explored the concepts of rules, consensus, curiosity, and assumptions, it is time for us to move on to the next part of Th e Greenhouse Approach, where I will take you through the seven guiding principles I be- lieve will future-proof your company.

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