An Entrepreneurial Mindset

All leaders emphasise the importance of being entrepreneurial. But what does entrepreneurship imply?

Entrepreneurship is not about starting a new business or about taking undue risks or about mobilising capital. It is all about a new mindset, that is sharply focused on improving the current state of affairs. It is about chasing opportunities, without being unduly worried about current resource constraints.

The famous French economist, John Say mentioned that an entrepreneur shifts resources from an area of lower yield or productivity, into a higher one.

In his classic, “Innovation and Entrepreneurship” Peter Drucker mentions the fact that an entrepreneur need not be a capitalist ,investor or employer. In his authoritative style, Drucker points out that entrepreneurship is a type of behavior rather than a personality trait. Anyone who enjoys taking decisions can be an entrepreneur. Entrepreneurs are people who don’t get unfazed by uncertainty. They are people comfortable with change. Indeed, entrepreneurs look at change as an opportunity waiting to be tapped. Drucker adds that entrepreneurship is not all that risky as it is made out to be. Entrepreneurs fail because they violate some basic principles or because they are not trained in the required methodology.

Harvard Business School professor, Robert Simons, in his recent book,” Levers of Organization
Design ” mentions that an entrepreneur’s span of responsibility exceeds the resources he controls. This entrepreneurial gap actually puts pressure on the entrepreneur to innovate in various ways. The entrepreneur has to learn to work with limited resources, get the support of key people, quickly build a prototype to make a business case for more resources and so on. He recommends that to promote entrepreneurship and innovation, people must be given less resources than they actually need to get the job done.

It is quite clear that entrepreneurship and innovation are closely related. An entrepreneur has to be necessarily innovative. At the most basic level, the innovation may be to introduce a process improvement and at a more advanced level, it could be a new product concept. Finally at the highest level, it could be a new way of doing business. Vijay Govindarajan calls it strategic innovation, Gary Hamel calls it business concept innovation, Clayton Christensen refers to it as disruptive innovation , Chan Kim calls it Blue Ocean Strategy and so on. Whatever the terminology used, at its highest level, entrepreneurship is all about changing the rules of the game.

Three questions can help managers develop an entrepreneurial mindset.
Who are the customers?
What are they looking for?
How do we provide value to them in a way better than what is happening now?
These are profound questions which tend to look deceptively general. Constantly addressing them is the first step towards becoming an entrepreneur.