I’ve just come across some interesting research on how entrepreneurs think. Leigh Buchanan (http://www.inc.com/magazine/20110201/how-great-entrepreneurs-think_Printer_Friendly.html) quotes some Carnegie Mellon research, saying:
“Sarasvathy concluded that master entrepreneurs rely on what she calls effectual reasoning. Brilliant improvisers, the entrepreneurs don’t start out with concrete goals. Instead, they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies. By contrast, corporate executives—those in the study group were also enormously successful in their chosen field—use causal reasoning. They set a goal and diligently seek the best ways to achieve it.”
This research confirms what I call ‘Goal-seeking behavior’ in my book, and relates closely to what Steve Blank calls ‘Pivoting’.
Regardless of what it’s called, the behavior of entrepreneurs is fundamentally different to that of managers.
One way of assessing your own entrepreneurial profile is to ask yourself to what extent you need concrete goals before you start developing a business, and to what extent you can change goals on the fly. If you believe your business plan is a blueprint to be slavishly followed, you are trying to manage your way to success… if you get there, well done… but it’s a risky way to build a business!
The flexible, opportunistic, goal-seeking behavior of entrepreneurs may appear unstructured to managers, and to less sophisticated investors, but such behavior is a much more risk-mitigating way to build a business in any truly entrepreneurial environment (ie where innovation is required). So, if you want to become a great entrepreneur, challenge your view of goals and focus instead on gathering and deploying the resources you need to get a great business built.