You are here Achieving Longevity Through Entrepreneurial Thinking

Businesses fail. They fail fast and they fail often. Research indicates that over 50 per cent of new firms fail within five years, and 75 per cent are gone in ten years.  So what is different about the firms that survive?  The answer is that they are the firms that are successful in recreating themselves, in continuing to engage entrepreneurial thinking on an equal footing with strategy.

Due to a shortage of resources, customers, networks, credibility, track record, etc., early stage businesses are forced to be entrepreneurial and innovative in their approach.  But as companies grow and become more stable, they tend to lose their entrepreneurial roots, particularly as they gain access to resources, credibility, customers, and so on. They become staid in their thinking. 

Ironically, established firms are the ones that are best positioned to be entrepreneurial – to exploit new ideas – because they have the resources to do so.  Therefore, for established firms to survive – to achieve longevity – they must bust the chains of staid-thinking.  They must be purposeful in relearning how to act like entrepreneurs, encouraging people to find ideas that can lead to new opportunities. 

So where do great ideas come from?  For me, one of the most troubling aspects of creativity and opportunity seeking is that there are so many who believe that there are only certain creative people and then there are the rest of us.  Poppycock.  In fairness, there are certainly some people who are more creative than the norm, but if we want firms to develop and exploit entrepreneurial opportunities, the first step is recognizing that opportunities are not the exclusive domain of a few creative people.  Opportunities come from everyday people, and it is up to management to use proven systems and processes to support opportunity development.

Imagine being a municipal transportation planner in a room of municipal managers.  The politicians are looking for someone’s head because their constituents are complaining of poorly sequenced traffic lights.  The councilor recounts the phone call received from a constituent: “I will not wait through another red light at Home Road when there is absolutely no traffic going through on the crossroad that has the green light.  Why do you only hire idiots as engineers and planners – can’t they sequence the lights so I won’t have to be inconvenienced?  I want someone’s head and I want the lights fixed once and for all.”

Back in the boardroom, frustration sets in.  The politician is concerned about losing votes.  The planner says that people should be encouraged to take public transit in order to save the environment.  The engineer says that if further studies are completed he could more accurately estimate traffic loadings and install timers to shift the sequencing every hour, or for that matter every ten minutes. The budget officer says she can allocate the money, but that would cause a deficit, which means that there would need an increase in taxes, at which point the politician barks out, “no bloody way, I am not losing my job because of tax increases!”

In the silence of frustration, an aide says, “wouldn’t it be great if the traffic could tell the lights to turn green?”  Everyone laughs.

But then the engineer says, “I never thought of the problem that way.  We could look into ways to build advanced indicators that recognize when vehicles are coming up to the intersection.”  Presto, like magic the seeds of an opportunity are born.  This discussion could then lead to the development of electronic indicators placed into pavement, which in fact is what is now commonly used.

While just a fictitious story, I am hoping that you can see the potential of putting together a group of people who would not normally consider themselves to be “creative,” but who nevertheless struggle with a problem until a shift comes about that presents the problem in a new light, and introduces the potential for a new opportunity. A critical shifting point in this dialogue is reframing the problem as an automated customized solution for each unique circumstance versus a standardized solution that is driven by pre-assumed sequencing.

Sadly, even inter-disciplinary meetings and discussions such as this do not occur in all organizations. What does it take to be a truly entrepreneurial organization?

I propose a motivational framework for entrepreneurial thinking that engages (1) opportunity identification, (2) a supportive entrepreneurial organizational culture, and (3) an ability to fulfill entrepreneurial initiatives. These three elements match the flow for a specific entrepreneurial action (which starts with an opportunity/idea, is nurtured within a supportive entrepreneurial culture, and implemented through an entrepreneurial process).  From a long-term perspective, corporations need to first establish and nurture an entrepreneurial culture, be open to opportunities when they come, and finally develop those opportunities to be enacted in the marketplace.

About the Author

Jim Dewald is the author of ACHIEVING LONGEVITY:  How Great Firms Prosper Through Entrepreneurial Thinking.  He is the dean of the University of Calgary’s Haskayne School of Business and an associate professor in strategy and entrepreneurship. Prior to entering academe, he was active in the Calgary business community as the CEO of two major real estate development companies and a leading local engineering consulting practice, and president of a tech-based international real estate brokerage company.