Kofi Bentil IMANI SEMINAR SERIES

Kofi BentilKofi BentilIMANI SEMINAR SERIESIMANI SEMINAR SERIES

ENTREPRENEURSHIPENTREPRENEURSHIP AND THE CONCEPT OF AND THE CONCEPT OF

CREATIVE DESTRUCTIONCREATIVE DESTRUCTION

CREATIVE DESTRUCTIONCREATIVE DESTRUCTION

Joseph SchumpeterJoseph Schumpeter– The concept of Creative The concept of Creative

destructiondestruction was Introduced in 1942 was Introduced in 1942 by the economist Joseph Schumpeter.by the economist Joseph Schumpeter.

– It describes the process of It describes the process of transformation that accompanies transformation that accompanies radical innovation which brings about radical innovation which brings about development. development.

– In Schumpeter's vision of capitalism, In Schumpeter's vision of capitalism, innovative entry by entrepreneurs innovative entry by entrepreneurs was the force that sustained long-was the force that sustained long-term economic growth, even as it term economic growth, even as it disrupted or destroyed established disrupted or destroyed established companies and systems. companies and systems.

Joseph SchumpeterJoseph Schumpeter

ENTREPRENEURSHIP AND CREATIVE DESTRUCTIONENTREPRENEURSHIP AND CREATIVE DESTRUCTION

IT IS ABOUT DEVELOPMENT, MOVING STEADLY FROM ONE IT IS ABOUT DEVELOPMENT, MOVING STEADLY FROM ONE

POINT OF CIVILISATION TO THE OTHERPOINT OF CIVILISATION TO THE OTHER

IT REQUIRES MOVEMENT = LEAVING THE PAST BEHIND AND IT REQUIRES MOVEMENT = LEAVING THE PAST BEHIND AND

EMBRACING THE FUTUREEMBRACING THE FUTURE

– PEOPLE ARE AVERSE TO UNCERTAINTLY AND CHANGEPEOPLE ARE AVERSE TO UNCERTAINTLY AND CHANGE

– VISIONARIES EMBRACE THE FUTUREVISIONARIES EMBRACE THE FUTURE

– AFRICANS ARE NOTORIOUS FOR CLINGING TO THE PASTAFRICANS ARE NOTORIOUS FOR CLINGING TO THE PAST

DEVELOPMENT REQUIRES NEWNESSDEVELOPMENT REQUIRES NEWNESS

““The fundamental impulse that sets and keeps the capitalist The fundamental impulse that sets and keeps the capitalist engine engine [DEVELOPMENT][DEVELOPMENT] in motion comes from the in motion comes from the newnew consumersconsumers’ goods, the ’ goods, the newnew methods of methods of productionproduction or or transportationtransportation, the , the newnew marketsmarkets, the , the newnew forms of forms of industrialindustrial organizationorganization that capitalist enterprise creates.” that capitalist enterprise creates.” [AND [AND DEVELOPMENT REQUIRES]DEVELOPMENT REQUIRES]

The opening up of new markets, foreign or domestic, and the The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory…illustrate the organizational development from the craft shop and factory…illustrate the same process of industrial mutation…that incessantly revolutionizes the same process of industrial mutation…that incessantly revolutionizes the economic structure from within, economic structure from within, incessantly destroying the old one, incessantly destroying the old one, incessantly creating a new one.incessantly creating a new one.

This process of creative destruction is the This process of creative destruction is the essential fact of capitalism essential fact of capitalism [DEVELOPMENT][DEVELOPMENT]. It . It is…what every capitalist is…what every capitalist DEVELOPMENTDEVELOPMENT concern has got to live in.”concern has got to live in.”

““A railroad through new countryA railroad through new country, i.e., a country not yet , i.e., a country not yet served by railroads, as soon as it gets into working order served by railroads, as soon as it gets into working order upsets all conditions of location, all cost calculations, all upsets all conditions of location, all cost calculations, all production functions within its radius of influence; and production functions within its radius of influence; and hardly any ‘ways of doing things’ which have been optimal hardly any ‘ways of doing things’ which have been optimal before remain so afterward.”before remain so afterward.”

Question: is it a good thing to disrupt life and the status Question: is it a good thing to disrupt life and the status quo?quo?

If that brings a better life and future.. YES!!! If that brings a better life and future.. YES!!! There is no virtue in owing allegiance to the There is no virtue in owing allegiance to the status quo if there are better options status quo if there are better options or or even a chance thereofeven a chance thereof

TO CHANGE OR NOT TO CHANGETO CHANGE OR NOT TO CHANGE

RESPONSESRESPONSES

Globalization and the emergence of Chinese and Indian and Globalization and the emergence of Chinese and Indian and other new competition is “creative destruction” writ large. other new competition is “creative destruction” writ large.

We cannot hide from it. We can only rise to the occasion, We cannot hide from it. We can only rise to the occasion, channel it and adapt in order to benefit from it, rather than channel it and adapt in order to benefit from it, rather than succumb to it.succumb to it.

In other words GLOBALISATION IS A GOOD THING! If you are In other words GLOBALISATION IS A GOOD THING! If you are smart enough to take advantage of it, if you don’t, it will eat you smart enough to take advantage of it, if you don’t, it will eat you up.up.

REACTIONSREACTIONSCreative destruction can hurtCreative destruction can hurt. “Layoffs of workers with obsolete . “Layoffs of workers with obsolete working skills can be one price of new innovations valued by working skills can be one price of new innovations valued by consumers. consumers. Though a continually innovating economy generates new Though a continually innovating economy generates new opportunities for workers to participate in more creative and productive opportunities for workers to participate in more creative and productive enterprises (provided they can acquire the necessary skills),enterprises (provided they can acquire the necessary skills), creative creative destruction can cause severe hardship in the short termdestruction can cause severe hardship in the short term”.”.R Fisher

The China Effect on Europe and America. Requires that they The China Effect on Europe and America. Requires that they retrain and move from manufacturing towards the higher end retrain and move from manufacturing towards the higher end of the value chain, (Conception and Design) in order to survive. of the value chain, (Conception and Design) in order to survive. In the long run it is good for them.In the long run it is good for them.African has to also leapfrog the industrial revolution and insert African has to also leapfrog the industrial revolution and insert ourselves straight into the information age in order to compete ourselves straight into the information age in order to compete and develop. and develop.

We also have to more carefully manage the effects of Creative We also have to more carefully manage the effects of Creative Destruction because our people are vulnerable and not so Destruction because our people are vulnerable and not so easily retrained or economically mobile. The best innoculation easily retrained or economically mobile. The best innoculation against the negatives of Creative Destruction is higher against the negatives of Creative Destruction is higher education.education.

CD REQUIRES LIMITED GOVT WITH SPECIFIC ROLESCD REQUIRES LIMITED GOVT WITH SPECIFIC ROLES– Less regulation frees ingenuity and people come up with Less regulation frees ingenuity and people come up with

imaginative ways to solve problemsimaginative ways to solve problems

Thomas KuhnThomas Kuhnbasically posited that there is no one clear organised process of evolution basically posited that there is no one clear organised process of evolution by which human thought and knowledge progresses, rather it happens by which human thought and knowledge progresses, rather it happens through “paradigm shifts” which have a tendency to upset the staus quo through “paradigm shifts” which have a tendency to upset the staus quo and change things such that the old is rendered mostly useless or in many and change things such that the old is rendered mostly useless or in many cases entirely obsolete.cases entirely obsolete.

Kuhn said In general, knowledge comes about through 3 distinct stagesKuhn said In general, knowledge comes about through 3 distinct stages..– Prescience, which lacks a central paradigm, comes first., which lacks a central paradigm, comes first. Here the scientist Here the scientist

dreams in an unstructured way and baed on certain internal leanings and beliefs, dreams in an unstructured way and baed on certain internal leanings and beliefs, is convinced that his feelings are right and thus pursues them and seeks to is convinced that his feelings are right and thus pursues them and seeks to prove them. This leads to the next step KUHN called. prove them. This leads to the next step KUHN called.

– Normal science when scientists attempt to enlarge the central paradigm by when scientists attempt to enlarge the central paradigm by "puzzle-solving". So the dreamer seeks scienific justification for his beliefs or "puzzle-solving". So the dreamer seeks scienific justification for his beliefs or dream, and may well get it, then all of us will believe it until it is proven wrong dream, and may well get it, then all of us will believe it until it is proven wrong by another. Accordig to KUHN, the failure of a result to conform to the paradigm by another. Accordig to KUHN, the failure of a result to conform to the paradigm is seen not as refuting the paradigm, but as the mistake of the researcher.is seen not as refuting the paradigm, but as the mistake of the researcher.

– Revolutionary science, , As anomalous results build up, science reaches a As anomalous results build up, science reaches a crisiscrisis, at which point a new paradigm, which subsumes the old results along with , at which point a new paradigm, which subsumes the old results along with the anomalous results into one framework, is accepted. the anomalous results into one framework, is accepted.

In my view KUHN’s wok simply underscores Schumpeter’s in that there is In my view KUHN’s wok simply underscores Schumpeter’s in that there is no real ordered process, in other words nobody can tell what the next big no real ordered process, in other words nobody can tell what the next big thing will be and therefore the lesson is….thing will be and therefore the lesson is….

GO AHEAD AND BELIEVE IN WHAT YOU ARE DOING, BECAUSE HIPPIES GO AHEAD AND BELIEVE IN WHAT YOU ARE DOING, BECAUSE HIPPIES INVENTED THE MODERN AGE NOT NECESSARILY PROFESSORS, INVENTED THE MODERN AGE NOT NECESSARILY PROFESSORS, POLITICIANS OR RICH MEN!!POLITICIANS OR RICH MEN!!

How wrong experts can be…How wrong experts can be…

"I think there's a world market for maybe five computers." "I think there's a world market for maybe five computers." (Thomas Watson, chairman of IBM, 1943.)(Thomas Watson, chairman of IBM, 1943.)

"But what is it good for?" "But what is it good for?" (Engineer at the Advanced Computing Systems (Engineer at the Advanced Computing Systems Division of IBM, commenting on the micro chip, 1968)Division of IBM, commenting on the micro chip, 1968)

"There is no reason why anyone would want to have a "There is no reason why anyone would want to have a computer in their home." computer in their home." (Ken Olson, president, chairman and founder of (Ken Olson, president, chairman and founder of Digital Equipment Corp, 1977.) Digital Equipment Corp, 1977.)

"This 'telephone' has too many shortcomings to be "This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The seriously considered as a means of communication. The device is inherently of no value to us." device is inherently of no value to us." (Western Union memo, 1876.)(Western Union memo, 1876.)

"The wireless music box has no imaginable commercial "The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in value. Who would pay for a message sent to nobody in particular?" particular?" (David Sarnoff's associates in response to his urgings for investment (David Sarnoff's associates in response to his urgings for investment in the radio in the 1920's.)in the radio in the 1920's.)

"Who the hell wants to hear actors talk?" "Who the hell wants to hear actors talk?" (HM Warner, Warner Bros, (HM Warner, Warner Bros, 1927.)1927.)

How wrong experts can be…How wrong experts can be…

"We don't like their sound, and guitar music is on the way out." "We don't like their sound, and guitar music is on the way out." (Decca Recording Company rejecting the Beatles, 1962.)(Decca Recording Company rejecting the Beatles, 1962.)

"Heavier than air flying machines are impossible." "Heavier than air flying machines are impossible." (Lord Kelvin, (Lord Kelvin, president, Royal Society, 1895.)president, Royal Society, 1895.)

"If I had thought about it, I wouldn't have done the experiment. "If I had thought about it, I wouldn't have done the experiment. The literature was full of examples that said you can't do this." The literature was full of examples that said you can't do this." (Spencer Silver on the work that led to the unique adhesives for 3M PostIt Notepads.)(Spencer Silver on the work that led to the unique adhesives for 3M PostIt Notepads.)

"So we went to Atari and said, 'We've got this amazing thing, even "So we went to Atari and said, 'We've got this amazing thing, even built with some of your parts and what do you think about funding built with some of your parts and what do you think about funding us? Or we'll give it to you. We just want to do it. Pay our salary, us? Or we'll give it to you. We just want to do it. Pay our salary, we'll come work for you.' They said 'No'. Then we went to Hewlett-we'll come work for you.' They said 'No'. Then we went to Hewlett-Packard; they said, 'We don't need you. You haven't got through Packard; they said, 'We don't need you. You haven't got through college yetcollege yet'." '." (Apple Computer founder Steve Jobs on attempts to get Atari and HP (Apple Computer founder Steve Jobs on attempts to get Atari and HP interested in his and Steve Wozniak's personal computer.)interested in his and Steve Wozniak's personal computer.)

"Drill for oil? You mean drill into the ground to try and find oil? "Drill for oil? You mean drill into the ground to try and find oil? You're crazy." You're crazy." (Drillers whom Edwin L Drake tried to enlist to his project to drill (Drillers whom Edwin L Drake tried to enlist to his project to drill for oil, 1859.)for oil, 1859.)

"Airplanes are interesting toys but of no military value". "Airplanes are interesting toys but of no military value". (Marechal (Marechal Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre.)Ferdinand Foch, Professor of Strategy, Ecole Superieure de Guerre.)

How wrong experts can be…How wrong experts can be…

"Everything that can be invented has been "Everything that can be invented has been invented." invented." (Charles H Duell, Commissioner, US Office of Patents, 1899.)(Charles H Duell, Commissioner, US Office of Patents, 1899.)

"Louis Pasteur's theory of germs is "Louis Pasteur's theory of germs is ridiculous fiction." ridiculous fiction." (Pierre Pachet, Professor of Physiology at (Pierre Pachet, Professor of Physiology at Toulouse, 1872.)Toulouse, 1872.)

"The abdomen, the chest, and the brain "The abdomen, the chest, and the brain will forever be shut from the intrusion of will forever be shut from the intrusion of the surgeon." the surgeon." (Sir John Eric Ericksen, British surgeon, appointed (Sir John Eric Ericksen, British surgeon, appointed Surgeon Extraordinary to Queen Victoria, 1873.)Surgeon Extraordinary to Queen Victoria, 1873.)

"640K ought to be enough for anybody." "640K ought to be enough for anybody." (Bill (Bill Gates of Microsoft, 1981.)Gates of Microsoft, 1981.)

Passion for an ideaPassion for an idea

Edwin Laurentine DrakeEdwin Laurentine Drake

On August 27, 1859, a well that Drake drilled struck oil. On August 27, 1859, a well that Drake drilled struck oil.

in the late 1840’s Edwin Drake was hired to investigate suspected oil in the late 1840’s Edwin Drake was hired to investigate suspected oil

deposits in Pennsylvania. The oil company chose the retired railway man deposits in Pennsylvania. The oil company chose the retired railway man

partly because he had free use of the rail. partly because he had free use of the rail.

Drake decided that the best way to find oil was to dig for it. He had limited Drake decided that the best way to find oil was to dig for it. He had limited

success, but was only able to extract a maximum of 10 barrels per day. This success, but was only able to extract a maximum of 10 barrels per day. This

was not enough to make a commercial yield sustainable. When attempts to was not enough to make a commercial yield sustainable. When attempts to

dig huge shafts in the ground failed due to water seepage,dig huge shafts in the ground failed due to water seepage,

Drake decided to drill in the manner of salt well drillers. He purchased a Drake decided to drill in the manner of salt well drillers. He purchased a

steam engine to power the drill.steam engine to power the drill.

It took some time for the drillers to get through the layers of gravel. At 16 It took some time for the drillers to get through the layers of gravel. At 16

feet (5 m) the sides of the hole began to collapse. Those helping him began feet (5 m) the sides of the hole began to collapse. Those helping him began

to despair. But not Drake.to despair. But not Drake.

It was at this point that he devised the idea of a drive pipe. The going, however, was slow. Progress was made at the

rate of just three feet (1 m) per day.

After initial difficulty locating the necessary parts to build the well, which resulted in his well being nicknamed

"Drake's Folly," Drake proved successful.

Meanwhile crowds of people began to gather to jeer at the apparently unproductive operation. Drake was also

running out of money.

Amazingly the Oil Company abandoned their man and Drake had to rely on friends to back the enterprise.

On August 27th 1859 Drake had persevered and his drill bit had reached a total depth of 69.5 feet (21 m). At that

point the bit hit a crevice. The men packed up for the day. The next morning Drake’s driller, Billy Smith, looked into

the hole in preparation for another day’s work. He was surprised and delighted to see crude oil rising up. Drake was

summoned and the oil was brought to the surface with a hand pitcher pump. The oil was collected in a bath tub.

Within a day of Drake's striking oil, Drake’s methods were being imitated by others along Oil Creek and in the

immediate area. This culminated with the establishment of several oil boom towns along the creek, and by 1865

nearby Pithole City was producing oil.

Drake set up a stock company to extract and market the oil. But, while his pioneering work led to the growth of an

oil industry that made many people fabulously rich, for Drake riches proved elusive. Drake did not possess good

business acumen.

He failed to patent his drilling invention. Then he lost all of his savings in oil speculation. He was to end up as an

impoverished old man. In 1872, Pennsylvania voted an annuity of $1500 to the "crazy man" whose

determination founded the oil industry. He died on November 9, 1880

THE ENTREPRENUERTHE ENTREPRENUER

EntrepreneurshipEntrepreneurshipEntrepreneurship is a process of innovation and new-venture Entrepreneurship is a process of innovation and new-venture creation as a result of the interaction of individual and creation as a result of the interaction of individual and societal/environmental factors. societal/environmental factors. It is primarily driven by the initiator (s) (Entrepreneur), who take It is primarily driven by the initiator (s) (Entrepreneur), who take major decisions that ultimately lead to success or failure of the effort, major decisions that ultimately lead to success or failure of the effort, whatever the outcome, it usually affects the initiators directly, and whatever the outcome, it usually affects the initiators directly, and society as a whole by extension. society as a whole by extension. The whole process is aided by collaborative interaction of various The whole process is aided by collaborative interaction of various networks in government, education, and institutions that provide networks in government, education, and institutions that provide support and guidance. support and guidance.

EntrepreneurEntrepreneur

The entrepreneur is a catalyst for (economic) change who by the generation The entrepreneur is a catalyst for (economic) change who by the generation

of ideas, purposeful searching, careful planning, and bold judgment of ideas, purposeful searching, careful planning, and bold judgment

organizes resources and capabilities to create incremental wealth through organizes resources and capabilities to create incremental wealth through

the solution of problems, or the provision of life enhancing services. Uniquely the solution of problems, or the provision of life enhancing services. Uniquely

optimistic and committed, the entrepreneur works creatively to achieve set optimistic and committed, the entrepreneur works creatively to achieve set

goals, all for a particular purpose, which is usually to create wealth, as an goals, all for a particular purpose, which is usually to create wealth, as an

end or a means to other ends.end or a means to other ends.

The Soul of the EntrepreneurThe Soul of the Entrepreneur

It's not the critic who counts, nor the observer who watches from a safe distance.

Wealth is created only by doers in the arena who are marred with dirt, dust, blood,

and sweat.

These are producers who strike out on their own, who know high highs and low

lows, great devotions, and who overextend themselves for worthwhile causes.

Without exception, they fail more than they succeed and appreciate this reality

even before venturing out on their own. But when these producers of wealth

fail, they at least fail with style and grace, and their gut soon recognizes that

failure is only a resting place, not a place in which to spend a lifetime.

Their places will never be with those nameless souls who know neither victory nor

defeat, who receive weekly paychecks regardless of their week's performance,

who are hired hands in the labor in someone else's garden.

These doers are producers and no matter what their lot is at any given moment,

they'll never take a place beside the takers, for theirs is a unique place, alone,

under the sun.

They are entrepreneurs.

Joseph R. Mancuso

Center for Entrepreneurial Management

CHARACTERISTICS ATTRIBUTED TO ENTREPRENEURSCHARACTERISTICS ATTRIBUTED TO ENTREPRENEURS

1.1. Total commitment determination and perseveranceTotal commitment determination and perseverance

2.2. Drive to achieve and growDrive to achieve and grow

3.3. Opportunity and goal orientationOpportunity and goal orientation

4.4. Taking initiative and personal responsibilityTaking initiative and personal responsibility

5.5. Persistent problem solvingPersistent problem solving

6.6. Realism and a sense of humorRealism and a sense of humor

7.7. Seeking and using feedbackSeeking and using feedback

8.8. Internal locus of controlInternal locus of control

9.9. Calculated risk seeking and risk takingCalculated risk seeking and risk taking

10.10. Low need for status and powerLow need for status and power

11.11. Integrity and reliabilityIntegrity and reliability

12.12. CreativityCreativity

13.13. OptimismOptimism

14.14. Ability to influence othersAbility to influence others

15.15. FlexibilityFlexibility

MYTHS MYTHS

OFOF

ENTREPRENEURSHIPENTREPRENEURSHIP

THEY ARE DOERS NOT THINKERS

Because they become rich and famous through their deeds, people underestimate the Because they become rich and famous through their deeds, people underestimate the thinking behind the doing. Entrepreneurs usually think more than they do, but they thinking behind the doing. Entrepreneurs usually think more than they do, but they are go-getters, who don’t stop until they achieve their goals.are go-getters, who don’t stop until they achieve their goals.

THEY ARE BORN NOT “MADE”

Based on the romantic stereotype of a super person with special gifts. Drucker directly Based on the romantic stereotype of a super person with special gifts. Drucker directly attacked this notion when he said “entrepreneurship can be learnt”. It has process, attacked this notion when he said “entrepreneurship can be learnt”. It has process, and various models which can be studied and the knowledge acquired.and various models which can be studied and the knowledge acquired.

THEY ARE ALWAYS INVENTORS

Few are, most are not, rather they are superb visionaries and organizers, who usually Few are, most are not, rather they are superb visionaries and organizers, who usually benefit by improving on other peoples ideas.benefit by improving on other peoples ideas.

THEY ARE ACADEMIC AND SOCIAL MISFITS

This romantic view of the entrepreneur as an antiestablishment person is anecdotal. Most This romantic view of the entrepreneur as an antiestablishment person is anecdotal. Most get their ideas from belonging to the system and all business is about contributing get their ideas from belonging to the system and all business is about contributing to the system. A few may achieve success in unorthodox ways, but most are to the system. A few may achieve success in unorthodox ways, but most are mainstream.mainstream.

THEY MUST ALWAYS FIT THE “PROFILE”

over time a stereotype “romantic” view of the entrepreneur has emerged and people over time a stereotype “romantic” view of the entrepreneur has emerged and people assume one must fit it in order to make it as an entrepreneur.assume one must fit it in order to make it as an entrepreneur.

ALL THEY NEED IS MONEY

Money is never at any time the most important resource, good strategy is. Money is Money is never at any time the most important resource, good strategy is. Money is

always critical for implementing plans, but more of it does not guarantee always critical for implementing plans, but more of it does not guarantee

success.success.

ALL THEY NEED / HAVE IS LUCK

Luck is always a major factor in success, but it is always the best prepared who Luck is always a major factor in success, but it is always the best prepared who

seem luckiest, entrepreneurs prepare for the big break, that is their luck.seem luckiest, entrepreneurs prepare for the big break, that is their luck.

IGNORANCE IS BLISS

False, most entrepreneurs are meticulous analyzers, and they seek and use False, most entrepreneurs are meticulous analyzers, and they seek and use

information better than others, but they are also not risk averse, they know information better than others, but they are also not risk averse, they know

the risks, but take their chances. They however avoid P.D.A.the risks, but take their chances. They however avoid P.D.A.

THEY FAIL A LOT

Many try a number of times before they make it, once done, many survive Many try a number of times before they make it, once done, many survive

especially if they follow proven principles. It is not a totally uncertain world.especially if they follow proven principles. It is not a totally uncertain world.

THEY ARE EXTREME RISK TAKERS

Risk taking is important in entrepreneurship, but most entrepreneurs take only Risk taking is important in entrepreneurship, but most entrepreneurs take only

calculated risks with theoretically proven chances of success which are better calculated risks with theoretically proven chances of success which are better

than possibility of failure. The plan must work on paper.than possibility of failure. The plan must work on paper.

ScreeningScreeningandand

ConsultationConsultation

WHYWHYSAFETYSAFETYFINE TUNINGFINE TUNINGIMPROVEMENT, ADDITIONSIMPROVEMENT, ADDITIONSINITIAL REALITY TESTINGINITIAL REALITY TESTING

WHOWHO

FRIENDSFRIENDS

INDUSTRY PUNDITS OR OPINION LEADERSINDUSTRY PUNDITS OR OPINION LEADERS

ACADEMICS AND INTELLIGENTSIAACADEMICS AND INTELLIGENTSIA

FAMILYFAMILY

HANDLING CONSULTATIONSHANDLING CONSULTATIONS

LISTENLISTENINTERACT BUT DON’T DISRUPTINTERACT BUT DON’T DISRUPTNOTE EVERYTHINGNOTE EVERYTHINGPONDER EVERYTHINGPONDER EVERYTHINGRULE OUTRULE OUTSHORTLISTSHORTLISTPONDER SPECIFIC OPTIONSPONDER SPECIFIC OPTIONSREFER TO YOUR ORIGINAL DREAM AND DETERMINE WHICH ISSUES ARE KEYREFER TO YOUR ORIGINAL DREAM AND DETERMINE WHICH ISSUES ARE KEYDETERMINE RESPONSES TO KEY ISSUESDETERMINE RESPONSES TO KEY ISSUESCONSULT SOME MORE WITH KEY PEOPLE IF NEEDEDCONSULT SOME MORE WITH KEY PEOPLE IF NEEDEDAVOID PARALYSIS DUE TO ANALYSIS AVOID PARALYSIS DUE TO ANALYSIS STOP AT SOME POINT AND ACT!STOP AT SOME POINT AND ACT!

InnovationInnovation

Principles of InnovationPrinciples of Innovation

Action orientationAction orientation

Simplicity and functionalitySimplicity and functionality

Customer orientation/focusCustomer orientation/focus

Start smallStart small

Aim highAim high

Try - test - reviseTry - test - revise

Learn from everything good or badLearn from everything good or bad

Set milestones and Measure progressSet milestones and Measure progress

Encourage ideas. reward heroics, tolerate failureEncourage ideas. reward heroics, tolerate failure

Work work workWork work work

The Innovation ProcessThe Innovation Process

TYPES OF INNOVATIONTYPES OF INNOVATION– Invention Invention [[supportivesupportive or or disruptivedisruptive innovations] innovations]

Totally new products or services Wright /Edison /BellTotally new products or services Wright /Edison /Bell

– ExtensionExtensionNew use or different application of an existing product or New use or different application of an existing product or service - McDonalds /Atari/Baking Sodaservice - McDonalds /Atari/Baking Soda

– DuplicationDuplicationCreative replication of an existing product or service – Creative replication of an existing product or service – Ipod/iphone /Walmart /EasyjetIpod/iphone /Walmart /Easyjet

– SynthesisSynthesisCombinations of existing concepts and factors into new Combinations of existing concepts and factors into new things or services for different or better use - Federal things or services for different or better use - Federal Express/Unique TrustExpress/Unique Trust

Developing CreativityDeveloping Creativity

Recognizing relationshipsRecognizing relationships

– See things in a new light, new uses, new approachesSee things in a new light, new uses, new approaches

Developing a functional perspectiveDeveloping a functional perspective

– Be a pragmatic problem solverBe a pragmatic problem solver

Using both of your brainsUsing both of your brains

– Left for calculationsLeft for calculations, , right for creativityright for creativity

Eliminate muddling mindsetsEliminate muddling mindsets

– Either/orEither/or

– Security seekingSecurity seeking

– StereotypingStereotyping

– Probability thinkingProbability thinking

– Don’t fear ambiguityDon’t fear ambiguity

Creative problem solvingCreative problem solving

AdaptorAdaptor

1.1. Disciplined and preciseDisciplined and precise

2.2. Solves rather than finds Solves rather than finds problemsproblems

3.3. Refines existing processesRefines existing processes

4.4. Is means orientedIs means oriented

5.5. Is capable of extended detail Is capable of extended detail workwork

6.6. Sensitive to group cohesion Sensitive to group cohesion and cooperationand cooperation

InnovatorInnovator

1.1. Approaches tasks from unusual Approaches tasks from unusual anglesangles

2.2. Finds problems and avenues of Finds problems and avenues of solutionsolution

3.3. Questions basic assumptions Questions basic assumptions related to current practicesrelated to current practices

4.4. Has little regard for means, Has little regard for means, focuses on endsfocuses on ends

5.5. Has little tolerance for routineHas little tolerance for routine

6.6. Only seeks ends and cares little or Only seeks ends and cares little or nothing for consensus.nothing for consensus.

Funding SourcesFunding Sources

Personal savingsPersonal savingsFamilyFamilyFriendsFriendsVenture capitalVenture capital

Types of FundingTypes of Funding

DebtDebt

EquityEquity

LoansLoans

I.P.O.sI.P.O.s

Private FloatationPrivate Floatation

GrantsGrants

THE ENTREPRENEURIAL CYCLETHE ENTREPRENEURIAL CYCLE

1.1. IDEASIDEASCreative thinking; Systematic logical process, InnovationsCreative thinking; Systematic logical process, Innovations

2.2. SCREENING AND CONSULTATIONSSCREENING AND CONSULTATIONSSeek guidance, and then go off into the deepSeek guidance, and then go off into the deep

3.3. BUSINESS PLANNINGBUSINESS PLANNINGPlan to succeed and then face the oddsPlan to succeed and then face the odds

4.4. FUND RAISINGFUND RAISINGKnow how and where to raise moneyKnow how and where to raise money

5.5. GROWTHGROWTHDon’t stagnate, you will dieDon’t stagnate, you will die

VALUATION OF BUSINESSVALUATION OF BUSINESSThink business-like always!Think business-like always!

1.1. EXIT STRATEGYEXIT STRATEGYIt is all about the purpose. Death gives meaning to life.It is all about the purpose. Death gives meaning to life.

GodGodBe with you. Be with you. May your life May your life

make other people’s livesmake other people’s lives better.better.