What managers should learn from entrepreneurs!Book/Article Review|
In the book Corporate Effectuation – What managers should learn from entrepreneurs! by Thomas Blekman, Mr. Blekman goes through the process of explaining that the leading way of management theory which focuses on prediction and control limits our ability to create successful business ventures. He posits that entrepreneurs can learn to think and act effectually, that is using the logic that entrepreneurs use in solving problems in highly uncertain market environments. Effectuation is considered to be the set of decision making principles expert entrepreneurs are observed to employ in situations of uncertainty. The alternative to effectuation is causation which uses the tools of causal reasoning by beginning with a specific goal and a given set of means to reach it. Mr. Blekman suggests that effectuation should be used rather than causal reasoning by starting with only a set of means which in the process of deploying, natural goals emerge. Effectuation is based primarily on 5 guiding principles which are core to the effectual cycle as a new venture develops. 1. Bird in Hand Principle – Start with your means. Don’t wait for the perfect opportunity. Start taking action, based on what you have readily available: who you are, what you know, and who you know. 2. Affordable Loss Principle – Set affordable loss. Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside. 3. Crazy-Quilt Principle – Form partnerships with people and organizations willing to make a real commitment to jointly creating the future. Don’t worry so much about competitive analyses and strategic planning. 4. Lemonade Principle – Leverage contingencies. Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals. 5. Pilot in the plane...