 Sixth part of a series, and an eventual book, on Natural Enterprise
When 9/11 happened, an
entrepreneur in my community near Toronto, who makes modular portable
buildings, knew what he had to do. He phoned up a couple of small
trucking colleagues -- not the big multinational truckers, but guys
who, like himself, could turn their businesses on a dime. Within a few
hours several truckloads of portable building components, with an
assembly crew riding shotgun, were on their way to Ground Zero. Much of
the paperwork was written by hand as they were driving. The truckers
contacted their customs brokers at the border to tell them what they
were doing. Not only were they not stopped at the border like everyone
else, they had a personal two-country police escort to hustle them past
the traffic jams and across into New York State. When they got to
Ground Zero somehow the rescue workers knew they were coming, cleared
them space, gave them masks and let them get to work. The buildings
were constructed before any of the larger, local competitors had a
chance to even react, and they were used intensively for makeshift
housing, medical and supply depots for weeks. The company received a
special citation from the City of New York. They got a ton of free
publicity and their business continues to boom several years later.
Part altruism, part instinct, all improvisation.
When interviewed, the president of the small company said "We didn't
even think about it. We just acted. We just kind of made it up as we
went along."
Traditional "strategic" business planning is a cumbersome process that
large enterprises do because, if you're steering a giant unmanoeverable
oil tanker, you need to know hours, even days
in advance precisely when and how much to turn the wheel or you'll end
up catastrophically off course. Natural enterprise needs to plan, of
course, but it has the opportunity, and the strategic advantage, of
being able to do so quickly, even spontaneously. The traditional
business plan has these elements:
- explanation of the business and its unique competencies and competitive differentiators
- exhaustive "five forces" analysis of the market and opportunity for each product of the company
- the strategic plan: how and why the company expects to 'win' in the marketplace
- the sales and marketing plan: how the demand for the product is to be 'created' and met
- the logistics plan: premises, layout, equipment, set-up and start-up programs
- the HR plan: how many people will be needed with what skills and where they will be found
- the management team: who will be the pivotal decision-makers and what their experience and competencies are
- the operating plan: how the various business processes will intermesh: R&D, purchasing, sales, production, service etc.
- the capitalization plan: how much money will be needed, when, for what, and how it will be raised and repaid
- the financial plan and forecast: capital acquisition, working capital and cash flow management, and proof of financial viability
When you want to use someone else's money, and there's considerable
risk that the product either won't get made or won't sell, you need to
jump through all these hoops. There is, after all, no such thing as
risk capital. In natural enterprise, you're not, except in rare cases
for a very brief period of time, using other people's money, and the
process of Filling an Unmet Need eliminates almost all the risk of failure, provided
you remain extremely agile and alert, draw collaboratively on the
skills and judgement of your partners and advisors, and respond quickly
and intelligently to changes affecting the business. That's what
improvisational planning is all about.
There has not been a great deal written about this subject, certainly
not anything near as much as has been written on traditional business
and strategic planning. I first learned about this concept by reading Real Time Strategy by Lee Tom Perry et al in the mid-90s. More recently, Rosabeth Moss Kanter has written several articles about it. But I have seen it practiced by many
successful entrepreneurs who haven't read anything about it, they just
'naturally' planned their business improvisationally. In fact, they
were bemused when I told them it even had a name. They told me it's
"the entrepreneur's instinct". But spend some time studying it and
you'll find it's much more than that. It's not serendipitous or
arbitrary. It's actually quite rigorous and self-disciplined. Here's
what it's all about:
- Experimentation:
While mistakes are too expensive and take too long to correct in big
business, they are the very essence of natural enterprise. We all learn
from our mistakes. Successful entrepreneurs learn fast and learn a lot from making mistakes and learn by trying out a lot of different things.
This really is instinctive, and while most large corporations distrust
and discourage intuition, entrepreneurs recognize its value. I recently
watched my dog, the hypothyroid and arthritic Chelsea, sitting in the
shade with my visiting daughter's small dog Laker. Chelsea always
enjoys canine company but after introductions they don't really 'play'
together, they just sit around outside (kind of like their humans do),
watching the world go by. Suddenly as I was watching, Laker spotted a
chipmunk and raised her head suddenly. Within 15 seconds,
Laker and Chelsea, who had never 'collaborated' on anything to my
knowledge, and who certainly had never individually caught any of the
abundant wildlife in our area, had, together, outflanked, flushed out,
cornered and trapped the chipmunk, which simply gave up, lay down and
closed its eyes. In that fifteen seconds there had been at least 50
moves made by each of the three 'players' in the drama, a sophisticated
chess game of trial and error, signalling and tactical adjustment. It
was absolutely stunning to watch. When we pulled the dogs away and
rescued the poor chipmunk, the look of triumph and joy on the dogs'
faces was unmistakable. They sat close together panting for several
minutes, looking at each other, their expressions a canine 'high five'.
This is exactly how entrepreneurs learn and succeed. Their small size
and agility, their ability to pay intense attention and adjust
instantly to the consequences of every action, every conversation,
every decision, to self-correct very quickly and inexpensively, and to try out, often simultaneously and very creatively, several different things knowing that many or most of them are bound to fail, and learn from those failures, is what makes them so sharp and so successful.
- Respecting and Trusting One's Partners:
The partners in a natural enterprise not only need to have 'mutually
exclusive and collectively exhaustive' skills and competencies
(covering all critical aspects of their business without significant
overlap), they need to trust each other implicitly and unreservedly. A
jazz combo improvising during a jam session, or an acting troupe
improvising spontaneously on suggestions from the crowd, must rely
totally on the other members to perform excellently and mesh together
perfectly. If the players are competing with each other, or doubt the
ability of others to do their part, the result is disastrous. That is
why 'Assembling the Team' of a small enterprise is so critical. There has
to be trust. If there is, the team together can accomplish remarkable
things. They literally 'feed off' each other and hum like a well-tuned
machine. That's perhaps why family businesses are often the best
entrepreneurships -- the trust bond is longer and stronger. Natural
enterprise is inherently and necessarily collegial, collaborative, and
profoundly mutually respectful -- no one person or elite committee has
what it takes to lead or succeed.
- Continuous Adaptation and Change Resiliency:
My neighbour recently expressed great concern about when each spring to
stop putting birdseed into her feeders, so the birds wouldn't get
'dependent' on human-provided food and starve when she went on
vacation. I assured her that there was no risk of this happening,
because birds, like most creatures, are extremely adaptable to changing
conditions. Not only do most birds use a constantly-changing and varied
set of food sources all year round, they can also quickly decide to
migrate or hibernate if there's a sudden catastrophic food shortage --
death by starvation or freezing is very rare. Evolution has enabled
them to thrive as part of the self-managing complex adaptive ecosystem.
Our bodies function likewise, responding and adapting constantly and
continuously to complex change to restore health and equilibrium. The
marketplace, a human invention, is a complex system, but much less
adaptive, and that lack of adaptability gives rise to economic
phenomena like stock market crashes, depressions, spectacular business
failures and famines. This lack of adaptability is a function of the
system's inflexibility, homogeneity, and sheer size. Natural enterprise
can usually adapt well and quickly to market changes because it's not
hampered by its size and because it's non-hierarchical, as long as
there is sufficient open-mindedness and diversity of thinking among its
members. Groupthink, often a trademark of large homogeneous
organizations, is deadly.
- Creativity:
Improvisation is an inherently creative process. If the improv actors
or musicians weren't inventing as they went, and instead just performed
what they'd already rehearsed or played the night before, the result
would be bland, and any player going off in a different direction would
'crash' the production. Creativity is a learnable skill, and it, too,
is somewhat intuitive. It is a process of simultaneously opening
yourself to awareness of the need and awareness of the possibilities,
of freeing yourself from thinking about what has been, and instead
imagining what could be. We are inherently creative and imaginative
creatures, and despite the attempts of education and business to crush
it, our creativity, as De Bono has shown, is not that difficult to
reawaken. Bach, that most scientific of composers, was a brilliant
improviser. Successful entrepreneurs bring creative, practical ideas to
every situation, every customer, every problem, and they bring them to
bear quickly.
- Emotional Intelligence:
For some reason, large businesses tend to be impersonal businesses,
without passion and without either much skill at, or care for, the
emotional nature of the people working there. Great teams in every
arena of life have passion that carries them beyond their talent, and
people who fail to 'live up to expectations' are often emotionally
crippled or damaged. Most big business almost prides itself on their
indifference to this messy emotional stuff -- counselling was one of
the first aspects of large corporate operations to be outsourced, when
it was dealt with at all. Most successful entrepreneurs, though,
perhaps because their businesses are smaller and their work
environments more intimate, have developed remarkable 'emotional
intelligence': Ability to recognize and bring out the passion and joy
in those they work with, and to recognize and discharge negative
emotions in those people that are getting in the way. The most
successful entrepreneurs I know treat everyone with love and care, not
the emotional detachment we usually see in big corporations. Their
workplaces are happy and fun and casual and friendly.
- Trusting One's Instincts, Attentive Listening, and Learning from Nature:
We have three million years of instinct coded in our DNA, and until
relatively recently we relied on it to tell us how to live and what to
do. Very often our first instincts still give us more reliable and
successful answers than second thought. That doesn't mean always
following your gut feeling, or making decisions that are highly
emotional, but it does mean not discounting your intuition, and
learning when and to what degree to trust your instincts to guide you
in making decisions. This is especially true in assessing customer
reaction to products, and other interpersonal events: Our instincts
pick up on telling body language and eye movements that our minds often
miss. The value of instinct can be accentuated by attentive listening,
a skill many of us are very poor at. Listening isn't passive, either:
It requires restatement and rearticulation (to ensure you understand),
and creative probing and encouragement ('what if' type questions to
'think your customers ahead' and unearth new ideas). And recently we
have started hearing a lot about business 'ecosystems' and 'organic'
business processes. We have finally started learning that nature is the
perfect model of a healthy, resilient, collaborative, innovative and
adaptive economy, one we have a great deal to learn from.
In natural enterprises, this improvisation is continuous and pervasive, and it largely takes the place
of more formal, hierarchical planning and decision-making processes.
It's practiced constantly and honed to a fine art. Improvisational,
collaborative decision-making, and not edicts from an Executive
Committee or formal policies or plans or standard operating procedures,
drives most of the key actions and decisions of the enterprise. That's
not to say that more formal planning is never valuable in natural
enterprise. But formal plans must be very flexible and are often more
useful as milestones, frameworks, creative thinking and
consensus-building exercises than as rigorous decision-making and
operating guidelines. Plans become mere tools, to be used or not used
as the situation dictates moment to moment.
The word improvisation comes from the Latin term improviso,
meaning 'unforeseen'. In contemporary business, it is almost impossible
to foresee when or how the complex marketplace and economy are going to
change, so the ability to improvise intelligently yet instinctively is
increasingly advantageous.
Most importantly, not everything
in natural enterprise can or should be made up on the spur of the
moment. The need for, and advantage of, improvisation does not obviate
the value and importance of the other steps in the enterprise-building
process illustrated above -- most critically the up-front and
continuous research on unmet customer needs, and the assembly of the
best possible team for your enterprise.
My book Natural Enterprise will
include stories of a dozen or so real-life entrepreneurs who are
'naturals' at improvisational planning and decision making. Their
spontaneity and change resiliency is a key part of their magic, a
wonderful inspiration to those that work with them, and a cornerstone
of their success.
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MADE IN CANADA
trust your
instincts 
