Are Entrepeneurs Risk Takers?
By Sue Hornblow, Director @ Key Performance Group
Not so, according to Saras Sarasvathy who spoke at the 2012 International Council for Small Business World Conference in Wellington and was interviewed on National radio. She describes entrepreneurs as having a” burning desire to succeed”, “understanding risk and trading off accordingly”. She uses the image of a “crazy patchwork quilt randomly stitched together to create something unique”.
I am especially interested in how people think and how this translates into effectiveness and achievement of results. Two key points resonated with me. Sarah’s research shows that entrepreneurs create opportunities rather than predicting based on research and modelling. They focus on what they can control, termed effectual reasoning rather than the traditional causal reasoning taught in most business schools. This creative rather than reactive approach reminded me of adult development theory as researched by Robert Kegan and others. Post adolescence we move to a reactive or socialised phase. In this phase we define ourselves from the outside in, we respond to opportunities and are influenced by external factors.
Sounds a lot like the traditional business sales model… research, predict and respond to external opportunities. As we develop as adults, we may move to the creative or self authored phase. We are able now to see ourselves more objectively and create our own view ….from the inside out. This is sounding more like the entrepreneurial approach where the entrepreneur shapes the future. As we grapple with how to transform ourselves and our organisations, it seems to me we could do a lot worse that having a clear self authored vision, focusing on what we can control and testing our ideas to keep pushing boundaries. Investing time in our development could just help shape our minds to be more entrepreneurial in our approach.
Saras Sarasvathy is Associate Professor of Business Administration at the Darden School of Business at the University of Virginia. Professor Sarasvathy was in Wellington speaking at the 2012 International Council for Small Business World Conference and was interviewed on National radio 17/06/2012.
You can listen to the interview HERE
To discover more about the theory of adult development and helping yourself and others develop, you may like to read “Changing on the job: Developing Leaders for a complex world” by Jennifer Garvey Berger.