In The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty (Harvard Business School Press, 2000), Rita Gunther McGrath and Ian MacMillan define entrepreneurs as those who “detect…and exploit the…opportunities that arise from uncertainty.” ‘Habitual’ entrepreneurs:
- Seek new opportunities - passionately
- Pursue new opportunities - with discipline
- Carefully evaluate opportunities, limit their choices, and pursue only the best
- Focus on execution, and adapt as the opportunity develops
- Use their networks and involve many people
Based on their research, McGrath and MacMillan developed the ‘discovery-driven’ approach to planning, based on “convert[ing] assumptions to knowledge at the lowest possible cost.”In developing your plan, don’t get into detailed planning beyond where you have assumptions but no data and knowledge. However, don’t over analyze. Get started. Then use what you learn as you proceed to refine the future steps in your plan.
Six activities enable discovery-driven planning.
- Frame the project: Ensure your project or contribution will be worthwhile. Start your planning with where you want to finish, and develop the plan working backward to determine what it will take to accomplish your goal.
- Benchmark your environment: Ensure that your goals are realistic.
- Specify intermediate deliverables: Convert your objectives into specifics: what needs to be done and what skills are needed. Determine not just how you will measure your final results, but what specific accomplishments you will need to see at milestones through the plan to reach your final goals.
- Test the assumptions in your plan: As early as possible, gather data and convert assumptions to knowledge; conduct planned learning.
- Set milestones through the plan: Test and validate assumptions before moving to the next milestone.
- Be parsimonious with resources: Avoid taking on new and fixed expenses until assumptions have been tested and expected results are confirmed. This allows you to maintain flexibility and keep your options open.
Organizational leadership plays a key role in entrepreneurial initiatives. McGrath and MacMillan identify one of the functions of the leader as helping the others working on the project to deal with the unknowns and uncertainty by providing specific guidelines based on the best information available. In Intrapreneuring in Action (Berrett-Kohler, 1999), Gifford Pinchot and Ron Pellman identify a number of components of an organizational climate that can encourage intrapreneurs (entrepreneurs within a larger organization). These components include having a clear vision and strategies that focus on those the organization serves, making time for innovation, crossing organizational boundaries and using cross-functional teams with the authority to make decisions, identifying measures that encourage innovation, and tolerating risk, mistakes, and failure.
Pinchot and Pellman provide a tool to assess the organizational climate for intrapreneuring, with suggested initiatives to improve it. McGrath and MacMillan provide several checklists to evaluate the project and project team, and questions that the leader can ask as the project progresses. Their bottom line: not all projects or initiatives will succeed. Doomed projects should be identified as early as possible, reasons for failure determined, and positive outputs from failures identified and reused.