Arjen Hemelaar, author of this blogpost, is the director of Team Academy, an international school for entrepreneurship and intrapreneurship, of which he became partner in 2012. He will be a speaker at the Intrapreneurship Conference 2013, on December 13th in Paris.
You are taking a hike in the forest. A big storm starts blowing. What do you do?
You look for shelter.
Your soccer team is leading by 1-0 in the finals. 30 minutes to go and your team will be the winner of the tournament.
You choose the best strategy: to play defensively and avoid risks.
You have built a great company. The past 10 years have been profitable. Families are depending on you. The economy is really tough. What do you do?
You play it safe.
Fixed rules of the game vs always changing ones
What is the difference between example one, two and three?
In the first 2 examples the rules of the game are clear and will not change. However in the last example the playing field is changing as we speak.
Production costs are key to profitability. What we have learnt to do is to change our innovation engine, a key asset to start a company, into a performance engine, a key asset to an established company.
Predictability and repeatability
The key characteristics of a performance engine are predictability and repeatability. Avoiding mistakes, total efficiency. Vijay Govindarajan and Chris Trimble have written a great book about it.
Facing the Euro Crises, this is exactly what most of us do, we believe that the best performance engines will survive.
Is it true ? Why do we believe that?
Kodak, Microsoft, The Swiss watch industry are all great examples. They believed they owned the monopoly. In 1996 Microsoft’s officially stated that Internet would not survive.
There are many reasons for that. An important one is that people rely on their intuition more than on formulas.
Entrepreneurs have another way of thinking
The chance that a small business will survive in the United States is 35%. Entrepreneurs do not believe it applies to them. On average they estimate their chance to survive to be around 60%.
People think statistics do not apply to them. Because intuition only works in a predictable and stable environment, humans are inconsistent making summary judgments of complex information.
Furthermore when people make decisions they tend to take the inside view, calculating with the best-case scenario. Being part of a large company and its culture it is extremely difficult to take the outside view.
Intrapreneurs help to create an environment for change
My point is that, because people are really bad at forecasting, they cannot see it coming. It is not about more innovation. Finding ways to reduce production costs will surely help, but is it enough?
My point is about creative destruction. Radical change. How do we create an environment for change, which is more powerful than our limited brains?
Want to know the answer?
Come and visit the Intrapreneurship Conference of December 13 in Paris.