Succeeding in the New Economy
Two New Faculty Books Offer Key Insights on Who Will Survive and Prosper – and Why
Speed and Adaptation,
Not Microplanning,
Are Critical to Success in New Economy
By Sandy Hsiao
Established companies increasingly find themselves
struggling to keep up with the frenetic pace
and intense competition of the new economy.
Today, their conventional ways simply don’t give
them the mobility necessary to survive. Are they
doomed to failure? Not necessarily.
Co-authored by Wharton professor Ian C.
MacMillan and Columbia University professor
Rita Gunther McGrath, The Entrepreneurial
Mindset: Strategies for Continuously Creating
Opportunity in an Age of Uncertainty (Harvard
Business School Press) offers a practical guide for
thriving in an environment that is fast-paced and highly uncertain.
To succeed today, traditional managers must
adopt an entrepreneurial mindset. Like successful entrepreneurs,
they must create opportunity from uncertainty.
In the following Q&A, MacMillan, the Fred R. Sullivan Professor of
Management and director of the Sol C. Snider
Entrepreneurial Research Center, discusses these new realities
of business and the insights his book provides.
Why is studying and understanding the actions
of habitual entrepreneurs a key to success in
business today?
MacMillan: Managers of companies that are
wrestling with fast-moving competition and high-velocity,
turbulent environments find that traditional planning simply
doesn’t work anymore. The days when senior managers
decreed and everyone else followed are over. You can no
longer use rigid hierarchical structures, long planning cycles
or traditional budgeting processes. In such an uncertain
environment, you need new ways to plan and strategize.
It’s vital to constantly innovate if you are to adapt to the
change that’s taking place. It’s all about speed and adaptation
instead of microplanning.
And this is precisely how entrepreneurs, particularly
habitual entrepreneurs, behave. Habitual entrepreneurs are
people who started not just
one, but many businesses,
successfully. If you look at
many one-time entrepreneurs,
their second business is
often a disaster. Frequently
the reason they were successful
is not good management,
but good luck. On the other
hand, someone who has started
many businesses successfully
has created a template
for starting businesses. It is
their pattern of decision making – the way that habitual
entrepreneurs identify opportunities, and then select them
and assemble resources – that is interesting to us.
Habitual entrepreneurs often have the ability to forge
powerful but simple solutions where others see only complexity.
They embrace learning by taking small, calculated
risks, and rather than analyzing to death they can recognize
what’s roughly right and take action. But it’s their
ability to create opportunity from uncertainty that makes
them so successful in the new economy. And it’s this entrepreneurial
strategy of embracing uncertainty that can help
other companies compete and survive in this fast-paced
business environment.
How can a manager foster an entrepreneurial
mindset within a company?
MacMillan:
The basic way is through management’s
expectations. People need to understand that you
expect them to keep looking for innovative ideas and that
you will give them the tools to do this.
The tough thing is that you can’t pursue every idea, only
those that pay off. It takes a lot of personal time and personal
attention to pressure people to keep thinking up new
ideas and then help them understand why you are only
going to choose the very best ideas. If you don’t help them
understand that there is a discipline involved, they expect
all their ideas to be implemented just because they had
them. And not all good ideas make good business sense.
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