Entrepreneurship

and
Uncertainty
 Entrepreneurs explore opportunities and create
organizations to make opportunities into
realities.
The best entrepreneurs invent new ways to
live, work, and achieve.
Successful entrepreneurship blends
independence and collaboration, vision and
action, the individual and the organization
 An important dimension for understanding the
practice of entrepreneurship, at a firm level, has to
do with the presence and play of risk.
The process of pursuing a specific idea is highly
conditioned with uncertainty for the outcomes of
the efforts.
Uncertainty can be used to your benefit if you
create and employ an entrepreneurial mindset - a
way of thinking about your business that captures
the benefits of uncertainty.
 Uncertainty can be perceived as a positive
opportunity, but also, as a damaging one.
In this context, how an organisation deals with
the element of uncertainty and risk becomes
parts of the beliefs and values of its
leaders/senior managers who are able to
influence such perceptions.
 The culture and processes, by which
operations are managed, within the structure of
the organisation, can influence where practices
of entrepreneurship are fostered or hindered.
In this sense, organisational culture is highly
significant for appreciating the development of
entrepreneurship, especially at a strategic
level.
 Entrepreneurship is primarily about managing
risk while pursuing reward.
Entrepreneurship is primarily a paradox in that
it bears a risk and a reward. Risk (of failure) is
as integral a part of it as is (possibility of)
reward.
Lack of entrepreneurship means that we are
locked up in old structures, interpretations and
understandings.
 The entrepreneurship premium is the necessary
motive for the role of the entrepreneur to be set in
motion, or in other words, it is the reason why the
economic agent who acts in the entrepreneurial
arena assumes risk.
An economy without risk is one without
entrepreneurship.
Therefore, the level of risk that the economic
agent assumes for a given level is indicative of
the level of entrepreneurship within which he or
she chooses to act.
Entrepreneurship
as
a
Social Activity
 Building a company entails hiring, organizing,
and inspiring a collection of people who typically
need to get start-up funds from others, to buy
things from other people, and, ultimately, flourish
or fail together as a result of the ability to sell
things to yet another group of people.
The emphasis on rugged individualism is so
prevalent in western culture that many of the lists
of "characteristics of successful entrepreneurs"
barely reflect that launching a start-up entails
constant interaction with others.
 Commitment, opportunity obsession, tolerance
of risk, ambiguity and uncertainty, creativity,
self-reliance, ability to adapt, and motivation
to excel all seem to describe the kind of rugged
individualist who struggles alone to win a
contest under difficult circumstances.
 Successful entrepreneurs are especially skilled at
using their time to develop relationships with
people who are crucial to the success of their new
venture.
A new venture may start as the brainchild of one
or very few people, but it takes many more people
to put together the pieces of the puzzle that
constitute a successful firm.
The first few pieces of the puzzle usually come
from and through the existing network of the
entrepreneur or "insiders": friends, family and co-
founders.
 As the creation of the venture progresses,
however, entrepreneurs need to reach beyond
their individual social network and involve
"outsiders" such as banks, venture capitalists,
lawyers, accountants, strategic partners,
customers, and industry analysts and
influencers.
 Key Characteristics of
Entrepreneurs as Social Creatures
 Entrepreneurship is a social process, and that
entrepreneurs act largely as social rather than
solo players, should not lead researchers and
educators to conclude that entrepreneurs
individual knowledge and skill is irrelevant to
the success of a new venture.
The essentially social nature of establishing
connections and fruitful relationships with
both insiders and outsiders means that the
study and teaching of entrepreneurship
should focus more heavily on social behavior.
 This includes how people identify which
relationships will be crucial to the success of
their venture, and how they develop and
maintain the relationships that enable their
firm to obtain the information, funds,
legitimacy, and help needed for their firm to
survive and flourish.
 Once an entrepreneur has determined which
relationships are crucial to the success of his or
her new venture, most of his or her time is
spent building, negotiating, and maintaining
these relationships.
This implies that successful entrepreneurs are
able to persuade others to enter relationships
and to take actions that will help the new
venture.
 A key part of any leaders role is persuading
people to do things that they are unsure about
or dont want to do at all.
It is no accident that many of the most famous
entrepreneurs are renowned for their
interpersonal influence skills.
How to Use Entrepreneurial
Strength to Manage Stress?
 Research published in the Journal of Business
Venturing suggests that entrepreneurs have a
Type A personality and share certain
characteristics which have both positive and
negative features.
 Positive features
Preference for autonomy
Self-reliance
Dominance
Independence
Enjoy risk taking
Low need for support
 Negative Features
Delegation issues
Loneliness
Communication problems
Overwhelm
Discomfort with uncertainty
Self-blame and criticism
 The negative features are usually out of
immediate awareness, get pushed away and the
result is STRESS.
Type A personality stress is rampant in
entrepreneurs and solopreneurs. The most
common source of stress that entrepreneurs face is
role stress.
The many different roles that you take on and
manage simultaneously are not always compatible
with one another and require different skills,
pacing and levels of creativity versus structured
thought and planning.
 Stress robs you of being an effective
entrepreneur
Left unacknowledged, stress will :
Reduce attention and focus on specific
problems and tasks.
Interfere with your memory.
Compromise your immune system.
Make you less effective at the multitude of
tasks an entrepreneur does on a daily basis.
 Four elements of Type A personalities

Hard-driving
Aggressiveness
Extra energy fueling an eagerness to succeed
Leadership
 Hard-driving attitude, aggressiveness and
having endless energy born from an eagerness
to succeed all led to stress.
That is because these factors led to an
imbalance of effort and reward.
 What is the best type A personality
antidote to stress ?
The one factor that protected against stress was
LEADERSHIP.
The protective factor in leadership is that there
is a sense of managing the ratio of effort you
put in to the rewards you reap.
It isn't just putting in the time, energy and
eagerness, but carving out a sense of control
using leadership strategies.
HOW TO USE LEADERSHIP TO
MANAGE STRESS?
 Create a daily plan of activities in
blocks of two to three hours for a
single project.
Benefit: Leaders make operational, strategic
and visionary decisions. You are in charge of
your agenda and time.
 Prioritize in a flexible manner and
be open to switching the items
around.
Benefit: Leaders see the big picture and amend
plans as necessary.
You can stay on task but respond to immediate
needs such as delays out of your control,
customer complaints, software malfunctions,
merchandise flaws, order deadlines etc.
 Break large goals into bite size
pieces.
Benefit: Leaders judge success in a step-wise
direction.
Every step is a positive move towards the
ultimate goal.
The completion of each step allows for review,
adaptation and improvement.
 Focus on one bite at a time per
project.
Benefit: Leaders have an order and method that
provides the foundation for goal achievement.
Each stage of the process merits focused attention
without distraction, while keeping the final
outcome in mind.
Rewards are evident all along the way, while
creativity and new information influence the
pathway towards the goal.
Evolution drives the engine, powering the effort
with novelty, stimulation and a sense of risk
taking that entrepreneurs enjoy.
Have a list of contingencies prepared
for unpredictable circumstances
Benefit: Leaders are prepared for many
outcomes and create strategies for dealing with
obstacles toward the desired result.
You can act immediately to take care of an
emergency without having to think, plan and
organize at this critical juncture.
Energy and focus remain on the essential parts
of the job rather than get used up in wasteful
activities that create stress.
 Planning

Opportunity Analysis a description of the

product or service, and assessment of the
entrepreneur, specification of activities and
resources needed to translate your idea into a
viable business, and your sources of capital
Business plan a formal planning step that
helps determine the viability of an enterprise
by describing all elements involved in starting
it.
Key planning elements besides money
are:
The People,
The Opportunity,
The competition,
The context and
The risk and rewards.
 Once a plan is made, getting investors is the next
goal
No financial resources include networks such as
suppliers and customers, top management teams,
advisory boards and partners
Entrepreneurial hazards include death of
entrepreneur, inadequate delegation, misuse of
funds, poor planning and controls
Global start-up a new venture than is
international from the very beginning.
The Entrepreneurial personality has
a number of important attributes:
 Managing self.
It is important for an entrepreneur to be aware
of personal strengths, shortcomings,
motivations and goals. People cannot manage
an enterprise if they cannot manage
themselves. Self-awareness can be discovered;
 Managing compatibility.
A personal fit is an alignment of the venture
with the entrepreneurs preference (lifestyle
and work style) and skill (qualification, talent
and expertise), and not the other way around.
Entrepreneurship is characterised by hard work
yet it should not be a yoke but a venture to
be enjoyed;
 Managing uncertainty
Entrepreneurship is an uncertainty it is a
pursuit (and a hope) for financial reward; but it
is also a risk of not realising that goal.
Planning, projection and calculating risk are
essential parts of entrepreneurship but
uncertainty remains. Not to be certain can be
unsettling and it is vital for an entrepreneur to
develop poise; and
 Managing ambiguity.
Crucial to success is open-mindedness.
Entrepreneurship, like every other venture, is
driven by repeated decision-making. It is
important to be decisive and pragmatic rather than
dogmatic. The entrepreneur must be aware of
blind spots. Some events may distort reality but
the entrepreneur still has to make decisions.
Therefore, it is vital not to be rushed in decision-
making and to be open-minded, but not
impulsive or gullible.