Quick. Name ten entrepreneurs. Those pulling from recent history might easily name Steve Jobs, Jack Ma, Robin Chase, Mark Zuckerberg. Those more historical might mention Henry Ford, Estee Lauder, Carlos Slim, or Coco Chanel.
Top 10-50-100 entrepreneur lists abound with many overlapping names. Could it be that such lists are a huge disservice to entrepreneurialism? By tagging only a relative handful of elite “entrepreneurs”, have we demoted the endemic, innate — even genetic — trait shared by most, if not all, humans? Have we allowed the history of entrepreneurism to be defined solely by the few hundred people who practised it so well that profound commercial success became the capstone of their careers?
What’s tricky about such questions is the elusive definition of “entrepreneur”. One is that entrepreneurship is “the process of starting a business”; it asserts that the first entrepreneurs “can be traced back to nearly 20,000 years”, with the growth of entrepreneurs tied to expanding trade routes. This source also acknowledges that, in its modern form, entrepreneurship is much more than simply trading this-for-that. Notable entrepreneurs, it says, “innovated and invented new technologies to solve problems that nobody had ever solved before.”
On the spot?
Perhaps reviewing a classic thinker will help. It is hazardous to reduce the complex thinking of F. A. Hayek; however, addressing problems “that nobody has solved before” did provoke me to reread his 1945 essay, “The Use of Knowledge in Society”. Hayek outlined his thoughts on a “rational economic order” and talks about the “man on the spot”. After noting that the central “economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place”, he rejects the idea that some “board” could ever serve to take note — and act upon — better ways to utilise resources.
Hayek thus speaks of the “man on the spot” who can move to address societal needs when a larger entity of men and women cannot. What must an on-the-spot person know before acting? Hayek answers:
There is hardly anything that happens anywhere in the world that might not have an effect on the decision he ought to make. But he need not know of these events as such, nor of all their effects. It does not matter for him why at the particular moment more screws of one size than of another are wanted, why paper bags are more readily available than canvas bags, or why skilled labor, or particular machine tools, have for the moment become more difficult to obtain. All that is significant for him is how much more or less difficult to procure they have become compared with other things with which he is also concerned, or how much more or less urgently wanted are the alternative things he produces or uses.
Perhaps society itself being “on the spot” — facing a problem large or small — is the true catalyst for entrepreneurial thinking. If yes, then being on the spot creates both the need for and the opportunity to be entrepreneurial. And this is not a restricted activity, to be accessed by only a few hundred, or thousand, “entrepreneurs”. It is a much more basic, and uncultivated, part of humanity.
Sure, we can celebrate the Elon Musks in a society on the spot, wanting to drive cars whilst preserving the planet. Certainly not the first to take a stab at building a business on battery-powered cars, Musk has made meaningful progress and has become an entrepreneurial star. However, Musk would hopefully acknowledge the many others who preceded his work without as much success (or publicity). Remember, the origin of Musk’s own Tesla brand is historic.
A society of entrepreneurs?
Amazing how we nonetheless quickly fall into a well-established thinking trap. We quickly focus on Musk and, only if pushed, think about the nameless people who work with him. Musk is the entrepreneur; all the rest, employees. It’s like Zhang Ruimin of The Haier Group, who moved a bankrupt Chinese refrigerator company to world-class size and status. But not alone. Sadly, we think of ourselves as a society of employees — blessed with a relative handful of forward-thinking entrepreneurs. In truth, entrepreneurs today — given the global economy — are more likely to be, first, employers of many other entrepreneurs.
There are hundreds of thousands who find themselves confronting daily problems that require fresh thinking. Some explore ways to address their problems; most wait for someone else. Yet, for decades, innovative new businesses have been wildly springing forth, and those who started those businesses are usually unknown.
Consider William Baumol’s 2004 research paper on “Entrepreneurial Cultures and Countercultures”. Whilst acknowledging that the definition of entrepreneurship is evolving, he cites more than 50 innovations (most of which, for me, were started by “nameless” entrepreneurs); yet, all have become sub-sector industries, such as double-knit fabrics, gyrocompasses, quick-frozen food. Baumol’s goal was to reinforce the concept that independent entrepreneurs and large corporate firms are co-dependent, one (populated by entrepreneurs) to inspire innovation, the other (populated by employees) to replicate entrepreneurial visions to large scale.
Let’s rearrange his thought. Supposing in small and large firms, society were to instil an expectation that entrepreneurial thinking is not for the few but for the many, that society needs as much entrepreneurial thinking as is humanly possible, and that people should be trained to be entrepreneurial much as they are trained to drive an automobile. Such a change in attitude would impose whole new demands on the educational priorities of society. From the earliest school age, everyone would stop learning facts and start learning how to think so that they grow into independent-minded adults who refuse to accept overcomplicated, complex ways of working.
Let’s cultivate the innate talent inside humans to address problems they confront. This is not so much a job of creating entrepreneurs out of whole cloth; it’s rather a job of honing people to think entrepreneurially — from not allowing roadblocks to stop their brain processes to polishing rough conjectures into creative, even inspired, thinking. Do this and we would no longer need to separate entrepreneurs and employees: both would go about their work of combining thinking and acting in ways much more symbiotic.
What is required to jumpstart such a world is, first, new thinking. I have been speaking recently about the four “nextabilities” that will be required of 21C leaders. In brief, leaders should (1) attack problems by thinking more widely, including a wide array of views from a wider circle of leaders, (2) take a stand on the need for a new agenda, (3) enable new ways of doing things, and (4) lead with a point of view of the future in mind. Universities, business schools and all types of firms should develop these skills now. Yet for anyone who wants to see the dawn of a society of entrepreneurs, these skills should be cultivated fully and early in our educational systems.
Baumol also mentions the father of “creative destruction”, Joseph Schumpeter: “… [Early] innovative warriors were not entrepreneurs as we tend to think of them today, as creators or promoters of new enterprises, new products, and new processes…. Schumpeter … conjectured that growth and innovation were becoming so routine that the entrepreneur would thereby be threatened with obsolescence.”
Entrepreneurs will never be obsolete; but society has too often isolated them, demonised them, or made them celebrities. Left obscure are the secrets of entrepreneurial thinking. We have either unconsciously created or unhappily inherited an entrepreneur/employee society. Desperately needed for the coming century of endless on-the-spot problems is an unflinching commitment to cultivate a new generation of entrepreneurs, from bottom to top and without delay.
About the author:
Joseph Pistrui is Professor of Entrepreneurial Management at IE Business School in Madrid. He has published a free e-book and video, The Story of Next, on the Nextsensing website.