The three principles that entrepreneurs use to control their risk

How do entrepreneurs manage risk? A persistent and widely shared belief is that entrepreneurs are risk seekers; that they like taking risk. Ask anyone in the street or in a classroom, and they will tell you, “An entrepreneur is someone who is courageous, who likes to take risks.” But nothing could be further from the truth. Entrepreneurs don’t like risk; no study has ever shown that. What studies show is that while entrepreneurs are willing to take risks, because they recognize that it is necessary, they try to control them. To do that, they use three principles that are at the core of the entrepreneurial theory called effectuation, proposed twenty years ago by Darden professor Saras Sarasvathy.

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The conflict of mental models: The key to organizational transformation

One of the most important reasons why organizational transformations fail is the existence of a conflict between what the organization wants to do and who it really is. This conflict can be understood by means of the notion of mental model, which corresponds to the way the organization sees its environment and itself. With this perspective, transformation is about changing the organization’s individual and collective mental models. While this is difficult in itself, it is even more so when the current model, which must evolve, is perceived as valid, because this leads to a conflict between the existing and the desired model. Surfacing this conflict and explicitly addressing it is the key to successful organizational transformation.

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How Mental Models Prevent Organizational Change: The Tragedy of the Greenland Settlers

What prevents the transformation of organizations? More generally, what prevents us from changing in the face of a changing environment? There are many causes, but among them is the way we perceive the world and how we perceive ourselves, i.e. our mental model. The importance of mental models is particularly exemplified in an important historical case, the disappearance of the Norwegian colony of Greenland.

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Collective myths and the challenge of organizational transformation

Why is an organization so difficult to transform? The issue continues to challenge the senior management of many large organizations. In large part, the difficulty comes from the fact that what makes an organization unique, that it is a social artifact (a collectively shared artificial object), is not recognized. Viewing an organization from this angle, rather than as a machine or a node of contracts, opens up an interesting avenue and provides the missing key to transformation.

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Adherence to reality, the new challenge of management ?

What do the failures of Kodak or Nokia, the disengagement of employees in large organizations and the success of entrepreneurship have in common? Much more than one might think. In all three cases, it is a question of adherence to reality, and the future of management has a lot to do with this question.

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Why Transforming an Organization is Difficult: Resources, Processes, Values and the Migration of Skills

Why do organizations find it difficult to change when facing a disruption? The question is not new but it continues to puzzle researchers and managers alike. Part of the answer lies in the observation that over time, what an organization knows migrates: its capability initially lies in its resources (especially human), then it evolves to processes and finally to values. It is at this last stage that change is the most difficult.

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Stop Bothering your Employees with Entrepreneurship

It is decided, the theme of your next company convention will be “All entrepreneurs!” You’ll talk about Google, Tesla, Facebook, plus a Chinese champion for good measure. The manager of your Lab in San Francisco will come to talk about the latest local innovations. You will show a film that will explain “the six qualities of a good entrepreneur” with rock opera music. After a closing speech by the leader who, in essence, will say that it is only a matter of courage, the roadmap will be clear.

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