Seminal Entrepreneurship and Innovation Skills CAN IN FACT BE LEARNED

New Ways to Learn Entrepreneurship

Posted by Ikhlaq Sidhu, April 22nd, 2014

You may already be aware that the Berkeley Method of Entrepreneurship (BMofE, see link on our CET website – https://cet.berkeley.edu/curriculum/) is a unique teaching model for developing the entrepreneurial mindset, in addition to teaching tactics and providing infrastructure for the new venture process. One of the big questions in the field of start-up education has always been whether entrepreneurs are simply “born” or whether entrepreneurial skills can be acquired. Our most recent findings give us reason to believe that these critical skills and behaviors can indeed be taught and learned.

We see support for this in the confluence of two major themes:

1) our own co-authored Comfort Zone research showing that entrepreneurs and innovators are comfortable (and continue to be increasingly so) with ambiguity and with experiences outside their comfort zone

2) empirical research studies on motivating success by Carol Dweck, a distinguished Stanford psychology professor. Her findings show that mental growth, learning, and resilience are linked to a specific mindset (growth mindset), which allows students to be comfortable working outside their comfort zones and accepting of new challenges.

Thanks to Rebecca Loeffler, Visiting Scholar with UC Berkeley’s CET and on loan from Germany’s prestigious Ludwig-Maximilians-Universität München (LMU), we are now bringing together concepts from social psychology (part of Rebecca’s academic focus) with our previous work training entrepreneurs.

So, let’s connect the dots. Prof. Carol Dweck’s work on mindsets is exciting for education, with most of the study being conducted originally in K-12 settings. What she discovered is that children typically develop one of two mindsets: a “fixed mindset” or a “growth mindset”. The fixed mindset characterizes students who believe that ability is a fixed trait. Often children become constrained in their learning by allegedly permanent “labels” such as being smart or not smart. People with a fixed mindset try very hard to hold their label of being smart by avoiding challenges or situations that might have others question their badge of credibility. They are mostly afraid to lose the label of “being smart” which they have already attained.

In contrast, individuals with the growth mindset believe that ability is the product of effort and can therefore be learned or trained. They believe that they can overcome challenges and develop new mental capabilities. Those who have a “growth mindset” are not afraid of being wrong. Instead they find reward in the experience of overcoming challenges. They continue to take on challenges outside of their comfort zones and they continue to grow.

As mentioned earlier, the amazing part is that this growth mindset can be learned. It comes down to reward mechanisms. For those who are rewarded by themselves or others for “being” smart or successful, it generally leads to less self-driven challenge, less growth, and a downfall in measured results. But for those who are rewarded for the process of “overcoming challenges or trying new strategies or for even effort” the result is a positive reinforcement for taking on harder tasks and a continued increase in capabilities and results (i.e. to get in to the growth mindset on your own, “don’t tell yourself your are brilliant, instead, be proud of the challenges that you have been able to overcome”)

In our most recent Comfort Zone research work, originally developed by Prof. Paris de l’Etraz at the IE Business School, we observed that among the segments of entrepreneurs/innovators, managers, and engineers, it is the entrepreneur segment that is the most tolerant of ambiguity and the most comfortable to take on challenges outside of his/her own comfort zone. Moreover, it turns out that people in each segment would like to increase their comfort with ambiguity believing that they would actually be happier professionally and personally, however, only entrepreneurs/innovators actually continue to grow in this manner. Every other segment regresses slightly after their high school years, while entrepreneurs and innovators markedly increase their comfort with ambiguity.

There are several major results (or at least hypothesis) that could be concluded from this:

  1. A growth mindset allows a person to be comfortable with ambiguity and therefore creates the seminal condition from which entrepreneurship and innovation skills and mindset can be formed.
  2. Developing a growth mindset is essential to become a successful entrepreneur. Successful entrepreneurs are likely to reflect a growth mindset.
  1. A growth mindset can be fostered through certain kinds of feedback and rewards.
  1. Since reward structure has a direct effect on mindset, it’s likely that corporate environment or social environment plays a significant role in creating and incentivizing entrepreneurs and innovators.
  1. Ultimately, we can teach people in ways that will bring out their intrinsic innovation and entrepreneurial potential.

The Path from Executive Education to Corporate Innovation

dilbert-cartoon_1Posted by Ikhlaq Sidhu, December 23rd, 2013

I’m on my way back from Shanghai after being invited to work with a group of Chinese executives on their product innovation and intrapreneurship strategies, using aspects of my newly developed model for professional/executive education. It’s really an exciting model, that I used with Coca-Cola on their beverage strategy in China, with Tencent, a leading retailer with hundreds of stores, GM, World Health products, and other multi-nationals seeking global innovation.

Simultaneous Translation of Coca-Cola Exec in China

Photo: Coca-Cola and World Health Products executive discussing strategy options for China in Shanghai with simultaneous translation. December 16, 2013.

The Issue:

While many institutions and programs I’ve worked with excel at providing executive education programs with a clear impact, these are more the exception than the rule. For many, I’d say that the time has come for a change. Historically, executive education has focused on succession planning. The formula was that you take experienced, trusted managers and then have them spend some time being polished by academic experts. And that has become a big business: Business Schools today make about 40% of their revenue from Executive Education. That model needs to be refreshed, if it is to effectively solve the problem of innovating in a global environment.

First, most Executive Programs have mixed reviews in terms of quality. It turns out that half of professors actually score below 3.5/5. In other words not all program professors are “best in class”.

Second, case method and other generic materials are often not relevant. They provide very few targeted insights for the executives. Picking useful cases requires significant industry experience-based judgment and they must be supplemented with additional insights. Many of these programs simply do not have ways to address the actual context, strategy, and threats that their firm’s executives are facing.

Third, and this is a pretty important one, these programs are not accountable. There is no mechanism to follow up to see what came from the experience. Sometimes the courses can be “interesting” or “fun”, but in the next week, its business as usual.

And my best reason to believe that it’s time for a change is that most of these programs are focused on research results of the past. Firms live in the present and plan for the future. In fact, the pace of innovation has been accelerating significantly in the last 100 years and its not slowing down. The current issue for most firms, as pointed out by banking innovator Carlos Beldarrain, is that, the minimum pace of innovation to simply survive, is also accelerating. The time is right to find a model that works even better.

The Solution:

Here is the challenge I offer to those interested in evolving what is generally today’s state of the art for executive education:

  1. We need to actually focus on the goals of the firms. This means that successful programs will build in the time and methods for the faculty to actually know the company and its people at a deeper level.
  2. There has to be a mix of academic and industry experts. For year’s at Berkeley, we have been bringing Silicon Valley know how into our teaching program though entrepreneurs, investors, innovators, and executives. Choosing the right faculty is also critical because they need to have the breadth of how to teach executives as well as a relevancy on current industry issues.
  3. The firm’s executive champions have to be directly involved. I’ve always been known as an innovator. But with experience I’ve learned, no matter how capable you are at innovation, you can’t innovate within an organization without “permission” from the organization to actually create the innovation. For this reason, its critical that the executive sponsors participate to “offer the permission” for the participants to innovate, and to let them know that its safe to do so. By the way, “some people” are going to innovate anyway, as Steve Jobs said, you can’t stop them and you can’t ignore them either.
  4. It’s really about the project, not the lecture or the case. Yes, there are essential materials to cover, but the project has to be a real problem of the firm. Barriers such as confidentiality or NDAs cannot be excuses to work on fake projects.
  5. Projects need to be holistic. A company’s project cannot be only about design or only about strategy or only about branding. No, you need complete alignment on the project, because the result has to be financial success and impact or maybe learning and failure. Isolated skill development is not an executive level challenge.
  6. And finally, we need to have accountability of the result. What happened after one quarter, one year, or longer. You can’t teach it if you have not lived it in some way, and you also are not qualified to offer your certification if your institution does not have skin in the game, just like your students.

For institutions and programs who can evolve and incorporate these aspects, I respectfully suggest that it will result in a big step forward for both education and innovation.

Get Out of Your Box – in Madrid

Post by Ikhlaq Sidhu

Comfort Zone Scale
Comfort Zone Scale

I’ve just returned from Madrid, teaching in the final week of our inaugural Global Engineering Leadership Program.  This program extends the content I designed for the Silicon Valley Professional Program, with an Asian and European perspective on technology firm leadership.

While the program covers a variety of new and interesting topics, including Positive Psychology, What Does it Take to Innovate Within a Large Firm?, and New Management Issues with Big Data, the most surprising discussion theme related to the implications of a person’s comfort or tolerance for ambiguity.  Tolerance for ambiguity is often correlated to innovation and entrepreneurship.  But how do you measure it?  Is your professional comfort zone different than your personal comfort zone?  If you are more comfortable with ambiguity, will you be less stressed, more effective in your career, or even happier as an individual?

Take a minute to measure your own ambiguity tolerance by answering a few questions in this link, http://bit.ly/18qerkF.  Assess your comfort level with ambiguity, and help support our research in this area.  Research results will be posted to this website.

Our Madrid discussions started by reviewing the research in “Quant Mentality” by Prof. Paris de l’Etraz, with whom I am collaborating to further his work.  Prof. de I’Etraz originally defined a “Comfort Zone Scale”  (illustrated below) to self-assess a person’s comfort with increasing levels of personal and professional ambiguity.

Slide1

The scale is simple to use and intuitive to understand.  On the left of the drawing is Certainty and on the right is Uncertainty.  The levels P1 to P4 refer to your personal life.  P1 means you hate uncertainty in your personal life, while P4 means that you are very comfortable with uncertainty in your personal life.  Similarly, W1 means you hate uncertainty in your professional life, while W4 means that you are very comfortable with uncertainty in your professional life.

If you are P2/W4, for example, it means that in your personal life you are a bit careful and dislike uncertainty while in your professional life you are willing to go to Alaska to try to sell ice to Eskimos!

Think about this …what are you? This is effectively the size of the mental box that holds you back from experimenting and testing new ideas.  When evaluating your own comfort zone size, here are some quick guidelines:

  1. The scale is designed to find out if you “can be comfortable” having progressively less certainty about what will happen as a result of your decision.
  2. The scale should reflect your “ability to be comfortable” not the ability to withstand discomfort.  So if you are in an environment which causes you to take repeated risks that you are not comfortable with, then you are not higher on the P1-4 or W1-4 scale.

I consider myself a P2/W3, while Prof. de l’Etraz says he is a P1/W4.  We suspect that a measure of your comfort level and tolerance for ambiguity while making critical decisions may be seminal to innovation, entrepreneurship, and engineering leadership overall.   Moreover, people seem to change levels throughout their lives.  It’s also likely that this psychological characteristic could be changed with training, for those who want it.  So go ahead, use the link  http://bit.ly/18qerkF to let us know where you are on the scale.  It’s been a big topic in Madrid!

How to Build a High Performing Team

High Performance Team
High Performance Team

If you want to understand how to build a culture and organization for truly “high performance teams”, then take a close look at “Netflix Culture: Freedom & Responsibility” developed at Neflix by Patty McCord and posted by CEO Reed Hastings on Slideshare.  Facebook’s Sheryl Sandberg has called it “the most important document ever to come out of the Valley.”

See:  http://www.slideshare.net/reed2001/culture-1798664.

You pretty much need to go through the slide set to absorb it.  However, a key idea is that this type of organizational culture is not like a family.  Instead, its much more like a professional sports team.  Professionals are paid at top rates.  The goal is to hire stars for every position.  The rationale is that each high performer can deliver 10X in performance.  And unlike a family, they don’t mind when its time for a player to leave.  The culture also does not provide career planning.  The best long-term security is to have a have a great reputation of having accomplished great things and the skills to match.

Of course high performance teams are flat (non-hierarchical) and they typically value innovators, conflict (required to seek out the best of ideas), and clear, direct communication.  Other concepts for high performance teams are:

  • Results-oriented.  Hard work is actually irrelevant, only the results matter.  The firm won’t measure anyone’s time in the office or even vacation days.  In fact, there is not even an expense policy.  The guidance is to simply use common sense to do what is right for the organization.
  • Low Process/High Flexibility.  High performers thrive on freedom.  However, as firms grow, they use processes to combat the complexity from scaling.  This has a tendency to cripple innovation and drive out high performers.  The proposal made in this slide set is to grow by hiring only truly high performing people and to avoid adding process and new rules.   This leaves the organization flexible so that it can adapt to the inevitable changes yet to come.
  • Context-focused not delegation-focused.  There is some highly relevant advice for managers as well. As we know, high performers thrive on freedom, so consider this concept from Antoine De Saint-Exupery, “If you want to build a ship, don’t drum up the people to gather wood, divide the work, and give orders.  Instead teach them to yearn for the vast and endless sea.”  According to McCord, “The best managers figure out great outcomes by setting the appropriate context, rather than trying to control people.”  Don’t set top-down decisions, don’t use management approvals, and don’t defer to committees.  And planning and process should never be valued over result. “When one of your people does something dumb, don’t blame them.  Instead: Ask yourself what context you failed to set.”  And, “when you are tempted to control, ask yourself what context you could set instead.”

The document explains the behaviors that a high performance culture expects.  According to its author, high performance culture is not for everyone.  And for that matter, it’s not for every organization.

Questions to consider:

  1. How would you know whether a “high performance culture” is right for your organization’s mission?
  2. Could this be established in pockets of the organization or does it need to be driven top-down and implemented everywhere?
  3. What are the drawbacks or downsides to high performance team culture?

Posted by Ikhlaq Sidhu

You can find additional information in article posted by First Round Ventures highlighting Patty McCord’s role in defining the Netflix Culture:  http://firstround.com/article/The-woman-behind-the-Netflix-Culture-doc#ixzz2YrMlvtfi.

Adam Bosworth: Analyzing Complex Opportunities

Adam Bosworth, an engineering leader, offers his perspective on opportunity in a complex market.

Adam Bosworth, pioneer of XML technology and former Vice President of Product Management at Google, illustrates the analysis that lead him to develop his company Keas.

As you watch the videos listed below, consider the way Adam deconstructs complex healthcare issues. How does he characterize the size of the opportunity and the issues that will have to be overcome?

Key ideas:

Inferred measures in place of market research, pains in the system, incentives, decision-making unit, and elasticity of demand.

More on Adam Bosworth:

Adam Bosworth is the founder and CTO of Keas, a leader in healthcare wellness services. Adam was previously Vice President of Product Management at Google Inc. from 2004–2007; prior to that, he was senior VP Engineering and Chief Software Architect at BEA Systems. Known as one of the pioneers of XML technology, Bosworth previously held various senior management positions at Microsoft, including General Manager of the WebData group, a team focused on defining and driving XML strategy. While at Microsoft, he was responsible for designing and delivering the Microsoft Access PC database product and assembling and driving the team that developed Internet Explorer 4.0’s HTML engine.

References: UC Berkeley Distinguished Innovator Lecture Series on Youtube, Wikipedia.

Image: TechCrunch

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Steve Blank: Engineering Leadership includes Business Model Design

In this section of the on-line course, Steve Blank introduces concepts of business model design, customer development, and agile engineering encapsulated within this  Engineering Leadership curriculum.

The links below are from Udacity.com (https://www.udacity.com/course/ep245)  You can login using a Google or Facebook sign in – or create a new account for yourself.

For Engineering Leaders taking this open and free course, we recommend the following sections:

a) Lecture 1: What we know now:
In this section, Steve Blank explains a context for intapreneurial new ventures and why Business plans and product planning do not work well for new products and new businesses.  Generally in these cases, customer information is not well known.

b) Lecture 1.5: Business Models and customer development
This section explains in more detail the business model canvas and the iterative process of validating business model hypothesis.  Other concepts defined: Customer development, Pivots, and market sizing. 

c) Lecture 2: Value Propositions
In value propositions, Steve Blank defines qualitative value propositions and minimum viable product.

d) Lecture 3: Customer Segments
In this lecture, Steve Blanks defines the customer segment archetype as the counterpart to value proposition. His definition of Archetypes is similar to Personas are defined by Geoffrey Moore in Crossing the Chasm.

Image: steveblank.com

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