Tuesday, February 25, 2014
What's an Entrepreneurial Orientation? Nuggets from Research and Experience
Since the GFC (Global Financial Crisis) of 2008, around the world, optimism in business has not swayed to sparks of excitement or any exuberance of self-deception. The danger in this situation is the default neglect of patterns that may merit risk-taking. The joke as it were is on us again. We now defend passive behaviors in the guise of safety. There are a wide variety of start-ups that merit our attention. I have had the fortune to mingle with a variety of small and medium sized enterprise who have in them the distant drum frequencies of a distinctly vibrant future, on the edge of sustainable enterprise design considerations and employees wiser from the delight of authentic service.
I am naming just a few to buttress readers' sense of reality. Consider Rajeev Pathak, for example, ex-Wipro. He rushes from village road to city squares between schools of a myriad kind. Consider Vipul Redey, my junior from school – same space, different approach, after kicking his job at CISCO. Or consider Vinay Joshi in Pune, who is pure play computing and analytics. All in all, am reminded of days, when I wished to formally research the transition phase when entrepreneurs in the quest for growth managed the ‘professionalization’ of their ventures. While that became a difficult dream then, I am now fortunate to observe the process from up close. Here are some glimpses from the journey for leaders, entrepreneurs, and professionals who may wish to reflect on the dynamics of that transition.
1. Paradoxes Galore : Entrepreneurial journeys are full of surprising paradoxes. Laymen may find these difficult expectations of themselves. Let us look at some of them.
a. Weak-Tie Strong-Network : Entrepreneurs network relentlessly. In-person interactions with people who have complementary capabilities and interests are a general interaction pattern for entrepreneurs. The paradox is that they ‘use’ relationships for an ‘end’ in mind, so their focus is not on the depth of the relationship, but of the ‘value’ in the interaction. Whether they embellish the relationship with affection, authenticity or warmth is secondary to what they wish to accomplish in the near to immediate term. You may find it surprising how they land up to a second interaction long after the first as if there were no break in time!
b. Autonomy : Interdependence Polarity : Sociologically speaking, entrepreneurs, especially first-generation ones are social misfits, who seek to stamp out of expectations of conformance through a journey of individuation. They take a psychological risk of alienation, and the more successful ones, come to depend on the society they rebel in only to seek the support of those they first distanced themselves before.
c. Self-Help : Formalization Paradox : Entrepreneurs are known to tie-up informally to enable each other. However, as expansion becomes inevitable, the remnants of bureaucracy or formalization could undermine self-help in entrepreneurial networks too. Hence CEO forum retreats, and even recent attempts in India to formalize expansionist modes of American style business networks over breakfast or lunches hinge on norms and rules of membership.
2. Entrepreneurial Orientation : I first came across this term in the 1990s when Lumpkin and Dess made it to the Strategic Management Journal with their pentagon like constructs. They have a process view rather than a content view to the concept of entrepreneurship, and as such if any among the five below are diminished, entrepreneurial orientation would suffer. I now offer a distillation of the same given hairs lost on my head in coming to terms with the phenomena that holds these terms up.
a. Competitive Aggressiveness : This is the entrepreneur’s parallel to the day job employee’s need for achievement or the drive to acquire. It is about venturing all parts of the chain in entirety ahead of competition – opportunity, organisation set-up and the commercial exchange between customer and the firm.
b. Pro-activeness : This is a judgement formed in anticipatory readiness distinct from mere initiative taking in the everyday life of an organisation man. If it were Kasturbhai Lalbhai who revolutionised textile manufacturing in Gujarat, today, perhaps Chiddanand’s characters in his book The Horse that flew stand out in context.
c. Autonomy : An entrepreneur’s autonomy is deep grit of will rising far above mere freedom to pursue an approach to implementing formal processes at the work-place.
d. Innovation : Essentially of Schumpeterian origin, any disruptive introduction into the value stream of the marketplace was considered innovation. Today, we know that intangible process innovations deflect economic value far in excess of algorithmic proportion than discrete manufacturing or high-sea trading of the past.
e. Risk-Taking : As alluded to before, entrepreneurial risk is about going against the grain of societal trends and is marked by the willingness to be ostracised for such deviance. Entrepreneurs run twin risks of financial and psychological kind. Intrapreneurs count on being shielded of financial risks. Entrepreneurs also develop the fine art of distinguishing between impulsive hyper-activity and measured stretch of unprecedented nature. This is also distinct from much touted risk-taking that is spoken of in professional circles as mark of exemplary business acumen.
3. Glimpse of a Human Dynamic : There is a distinct relationship between entrepreneurial orientation and learning styles of professionals. In my own research it was known to us that engineers in middle-management cadres saw their firms as entrepreneurially oriented or not depending on their learning styles.
To put it crisply, the phenomenon we observed was this : If managers adapted in formal organisations such that they gave in to context, by examining inter-personally rich learning, they saw their firms as more organic and flexibly postured to interpret signals from their business environment. As against this, those who retained the concept intensive, rule, norm and logic laden learning styles laced in symbols of organisational policy, procedure and formality, saw their firms as rigid, conservatively postured and thus of low entrepreneurial orientation.
Well that in itself is quite a lot for a blog, I think. Am sure, you may like to respond if you need to dwell deeper. Would you not be curious to know, for example, what with the advent of mature angel investors, what kind of moral imagination and deeply held beliefs are waiting to fruition in the embryonic ecosystem of Indian entrepreneurship today? Let me give you a clue – there’s hardly any formal academics I know of on the psycho-dynamics of such processes in India. Economists still dominate the discourse in linear extension of a vocabulary they gave us on ‘market’ and ‘value’.
Am looking forward to conducting research on some related themes of ambidexterity, innovation climate and leadership in Indian firms this year. Would you know of institutions or individuals willing to fund this effort? Do write in.