The top 6 secrets of entrepreneurs
Through their years of experience, skillful entrepreneurs develop strategies and tactics for success. And the good news is we can all get ahead in the workplace by adopting them.
People tend to think of top entrepreneurs as a breed apart, somehow. Marching to their own drum. But are they so different, the Elon Musks, the Jeff Bezoses, the Richard Bransons? And what is it that makes them so successful?
The shelves of bookshops – and, in a pleasing irony, Amazon’s website – are groaning with volumes that speculate about how these innovators think and work, and what we can learn from them.
Amy Wilkinson decided to do more than just speculate. Over five years, from 2010, Wilkinson, then a Senior Fellow at Harvard, conducted rigorous interviews with 200 business leaders, as well as the founders of LinkedIn, Chipotle, eBay, Under Armour, Spanx, Airbnb, PayPal, JetBlue, Gilt Groupe and Dropbox, in an attempt to discover their secrets, and then used scientific methodology to analyze the results.
In her landmark book, The Creator’s Code: The Six Essential Skills of Extraordinary Entrepreneurs, published in 2015, Wilkinson revealed that successful entrepreneurs do indeed have basic skills that we can all learn and practice – and it turns out they are more relevant than ever in the era of COVID-19.
“With COVID, you’re forced into navigating turbulence like an entrepreneur does, even if you’re in a traditional company,” says Wilkinson, who now teaches at Stanford University and runs Ingenuity, a San Francisco-based global innovation company that advises executives, entrepreneurs and investors.
The six essential skills
Find the gap: Entrepreneurs look for gaps and problems and then fill or solve them. They spot opportunities that others don’t see. “One way to do that is to be a sunbird,” Wilkinson says. “You take an idea from one place, pick it up, fly it over and reapply it somewhere else. For example, there’s a sporting goods manufacturing company that used to make protective equipment for hockey players. Now it makes face shields for healthcare workers.”
Drive for daylight: Think about the future – the long term as well as short term. “Short term, you have to make sure you’re looking after your customers now, and your employees, who are probably working from home, dealing with kids at home, and so on,” she says. “But we also ask our clients: ‘What do you want to have achieved when you look back five years from now?’ That’s important for employees at all levels to be thinking about, to guide today’s actions.”
Number of business leaders Amy Wilkinson studied for her landmark book
Number of skills identified by Amy Wilkenson that we can learn from entrepreneurs
Fly the OODA loop: Observe, Orient, Decide and Act. That means assess situations, make decisions and act quickly. Entrepreneurs are nimble, and we should be, too. “I’ve heard a lot of CEOs and managers at all levels say they’ve made 10 years’ worth of decisions within the past year,” says Wilkinson. “In the past, everybody thought large industries couldn’t move fast, but they’ve shown that they can.”
Network minds: Instead of thinking you already have a small team that knows the answer, look for brain power from all sides in order to solve a problem. Ask your business partners how you can better collaborate.
Fail wisely: There is a perception that top entrepreneurs are successful all the time, from the beginning. The reality is that they factor in failure but, crucially, they manage risk and fail small. “Entrepreneurs are constantly testing and learning, but being smart about experiments is essential,” says Wilkinson. “That means, if I give you $100, don’t place one $100 bet, place 10 $10 bets.”
Gift Small Goods: Right now, this could mean the company helping out a partner who is stuck or employees scheduling meetings to help facilitate those who are juggling family and work responsibilities. Being helpful is good for everyone’s mental health and, in the long term, often pays dividends.
Opportunities within challenges
Having cracked the secrets of entrepreneurs, Wilkinson has spent the past three years working with and researching more traditional, Fortune 500-style companies, and has found that these same skills can be applied by all kinds of managers and employees.
“Whether you’re in a huge business or a small business, if you can think like an entrepreneur, you can really thrive,” she says. “The interesting thing is how many opportunities come to light during a challenge, so traditional businesses become more entrepreneurial and new businesses also emerge.”
Wilkinson isn’t the only one to have done a deep dive into the minds of innovators. Saras D. Sarasvathy, Associate Professor at the Darden Graduate School of Business Administration at the University of Virginia, studied 27 of them closely in an attempt to determine the “characteristics, habits and behaviors of the species entrepreneur.”
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Concept of Effectuation
Sarasvathy, too, discovered that there were similarities in the mental processes of all those she met and interviewed. She came up with the concept of Effectuation, which has five principles:
Bird in hand: Expert entrepreneurs don’t hang around waiting for the perfect opportunity. Start taking action, based on what you have readily available.
Affordable loss: Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside.
Crazy quilts: Form partnerships with people and organizations willing to make a real commitment to jointly creating the future – product, firm, market – with you.
Lemonade: This is the “when life gives you lemons, make lemonade” theory. In this context it means embracing the surprises that arise in uncertain situations, and staying flexible rather than tethered to existing goals.
Pilot in the Plane: Not everything can be shaped or controlled, especially now, but effectuation encourages you, as the pilot of your venture, to focus on the things that are, at least to a certain degree, within your control.
Thomas Blekman, Dean of the Global School for Entrepreneurship in Amsterdam, has adapted the Effectuation principles for the corporate sector.
“It’s actually an approach to problem solving,” Blekman says. “With Bird in Hand you ask yourself, ‘What am I trying to achieve?’ And then, ‘What means do I have to do it?’ Then you use Affordable Loss to take small steps and figure out what works and what doesn’t. And if the solution lies outside your available means, then you co-create, which is using Crazy Quilt.
“I see more and more people now working together to solve issues. And there is an increased emphasis on agile working and scrum methodology and so on, and the Effectuation principles really combine well with those.
“If you use predictive approaches like waterfall methods or project management, just assuming that you know everything up front, then you’re playing the wrong game,” Blekman says.
“We’re becoming more and more aware that, because of the dynamics of the market, we cannot predict the future. We need more customer insight, we need to be closer to the market, more agile, more dynamic. And working with available means and working with a network really connects well with these agile approaches.”
Blekman says that to be a successful entrepreneur – or “intrapreneur,” a manager within a company who promotes innovative product development and marketing – the important thing is to adjust your mindset.
“From a managerial point of view, it’s essential that you don’t presume you know everything,” Blekman explains. “It’s not a fixed situation – we are in a continual state of flow. Also, innovation is mixed up with invention. In reality, most of the things that are successfully adopted in the market are connected to things we already know, which again is Bird in Hand – starting with what you have.
“At the school we also teach the people who want to become intrapreneurs that there is always risk, but if you can manage the downside – the Affordable Loss principle – you can take steps towards the future.
“Entrepreneurs are seen as lone wolves, especially those working in existing organizations,” Blekman continues. “But you can’t be a lone wolf because you need allies in order to leverage the means of the organization. So Crazy Quilting is essential, also, for intrapreneurs.”
Finally, Wilkinson points to another skill top innovators try to hone.
“Something else that is really important is not getting worn out yourself – and entrepreneurs talk about this all the time, because the toll on mental health can be great. Are you sleeping enough? Are you eating healthily? Do you take a day off if you really need it?”
These days, for entrepreneurs, as for all of us, the ability to take care of yourself and your employees may be the most vital talent of all. — Cathy Dillon
Published: June 2021
Image: Danae Diaz for DHL Delivered