By Paul B. Brown, Forbes.com
Special to Online Career Tips
The short answer to the implicit question in the headline is this: You are going to have to think differently about how you perform your job, if you want to foster entrepreneurial thought and action inside your organization.
To show just how much you have to change, consider four elements of a good management:
- Knowledge, i.e. how much stuff that you know
- Judgment, i.e. how good your decisions are
- Instincts, which allow you to figure something out in real time based on very little data, and
- Coaching ability.
This is neither a complete list, nor necessarily the most important things a leader does. We’re just using them to illustrate the difference in what’s required of management and support in the unknown—which is a short hand way of describing any entrepreneurial efforts—compared to the known, i.e. the stuff you handle every day.
In the known, if the company’s people development system (and you) are performing correctly, the more senior people will have more knowledge and better judgment. That just make sense. You’ve lived longer and you’ve got a greater accumulation of facts. So, your judgment should be better. Plus, those with poorer judgment will have been weeded out. Net, the people at the top should be pretty good at decision making. We’re not saying it always works this way—like you, we have had extremely bad bosses who were clueless most of the time—but this is the way it is supposed to work.
Coaching should also get better with experience. And your instinct should as well, as you see and are exposed to more. So, in a predictable environment it’s really valid that you should be the boss. You should direct and supervise your direct reports and veto them as necessary because you know more and your judgment should be superior to theirs.
But what happens if somebody comes to you with a desire to go into the unknown and start something new. You’re knowledge and judgment in that case is effectively irrelevant. You
can never tell them what to do because you simply don’t know what is going to happen or whether you have ever been exposed to something like they may encounter. At best, in a specific rare case, you might say something won’t work because you know it’s been tried and failed. But only in that specific case. You can never say that the venture can’t work, because in the unknown you can’t know what sort of asset or opportunity will emerge after their very next step.
And therefore, it’s logically wrong for you to boss.
Coach and Thought Partner
What does that leave you with? Being a coach and a thought partner. The image is Thomas Jefferson (you) and Meriwether Lewis and John Clark (your explorers, i.e. the people who work for you who are about to set off on an entrepreneurial project.)
Jefferson and Lewis and Clark reportedly spent days conceiving and planning the expedition. But they didn’t sit there and plan what specific steps Lewis and Clark were going to take. Instead the three discussed what Lewis and Clark were likely to encounter, what they needed to bring along, and who should be part of the expedition. There was no way that Jefferson could supervise and be a hands on manager of that expedition. It would have been utter foolishness. He wasn’t going on the journey and what Lewis and Clark would face was unknown.
As you can see operating in the unknown gives you an entirely different job. In the unknown, your explorer is the leader, not you. You are a coach and thought partner.
Here are some of the things you are some of the things you are going to want to help with:
Experimental Design, specifically the construction of small, smart steps that actually lead to validated learning. This is analogous to the design of a good experiment in the hard sciences. You don’t and can’t know what will result from the next step. You don’t know any more than the person who’s going there, but you can design that step so that something valuable to them–and to the company–is learned whether it produces the desired result or not.
Desire. Perhaps above anything else you want to ensure that your explorer really wants the result they are going after. Why support or encourage somebody going into the unknown if they don’t care about the goal? They won’t persist. They won’t be as creative, and creativity is vital. They’ll sit around and over-think. Why would you invest an ounce of the company’s precious resource of this employee if their heart’s not in it? But when their heart is in it, you want be there to deliberately stoke their desire and vision so that that it builds over time.
Manage acceptable loss. You never want to risk more than you can afford to lose, as you journey into the unknown. As it pertains to your role as a manger, acceptable loss has two important dimensions: Tangible and Reputational.
The issue with tangible is simple. How do you keep the cost low, not only for the overall project, but for each step along the way?
As for reputational, it is a bit more abstract but no less important: How do you protect the reputational capital of yourself—and particularly of your entrepreneur—inside the organization, because that reputation is all-important. You need to be coaching them about how to head off into the unknown in such a way that builds their reputational capital or at least doesn’t put any of it on the line. They might want to say things like “one of the organization’s goals is to push the boundaries of where our offerings might fit. No one knows if they is going to work. But we are going to give it our best shot investing only the absolute minimum resources needed.”
And make sure they are successful at delivering on what they promised. The mission doesn’t need to be a success. (“Well, now we know that our products are never going to be accepted in Asia. That’s good to know. We won’t have to invest any more over there.”) But the journey must. In a large organization, your ability to do things in the future will be severely compromised on a first big public mistake, and a second one will effectively be terminal. It may not end your employment, but it will sure stunt your career advancement.
You’re the arbitrator of acceptable loss for the company and for yourself. If it’s too expensive or it’s too risky, you get to say no. That’s the only time you get to say no. The rest of the time you’re a coach because the rest of the time you don’t know. The only thing you can know is it exceeds your acceptable loss.
The last thing you need to deal with is managing the organizational structure. Simply put, you need to protect the people who are venturing into the unknown from being attacked from within and you want to remove as many obstacles as possible.
To do that, the tendency—and the solution that is preferred by academics and consultants—is to sequester the entrepreneurs, to set up a self-contained unit or skunk works. We don’t think that’s necessary. Whenever possible—and it generally is—you want to keep them in the mother company. Your job here in managing the structure is to understand:
A) How the organization structure impedes entrepreneurial activity and then
B) How you grant specific relief on a case-by-case basis. How do you actually help relax the structure when it’s necessary for the experiment to continue?
For example, there may be a standing company edict that all new ventures must produce a 20 percent return on capital. You can say that is just silly in this case of journeying into the unknown. (There is simply no way to anticipate whether they are going to find market acceptance.) And you can simply waive it.
All this may sound challenging, but the gist is really simple. You probably have lots of examples where these ideas have been used in your organization. It’s just they’ve been completely under the radar.
Try this new way of managing them to bring them to the fore.
About the Author:
Paul B. Brown is the co-author of Just Start published by Harvard Business Review Press. Please note the blog now appears every Sunday and Wednesday. Click on the “Following” button to receive the new blog as soon as its goes live.
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