We Can Reverse the Decades-Long Decline in Business Agility, and Increase Our Competitiveness

North America has a reputation for being entrepreneurial and agile. And in many ways this is true.

However, reports show our business agility, entrepreneurship, and entrepreneurial competencies have actually been declining for decades. As a result, we are much less competitive, we are not renewing and creating competitive advantages sufficiently, and we are missing significant opportunities to strengthen our economies and communities.?

Our economies and our businesses – like any ‘living’ thing – depend on business agility. Business agility is the constant self-renewal and organizational renewal we and our teams create by exploring, experimenting, and using entrepreneurial mindsets. Entrepreneurial mindsets are the ability and willingness to continuously learn in response to and in anticipation of environmental evolution.

Policy is needed to address some of the business agility decline. However, as business leaders, we can foster entrepreneurial mindsets and competencies so we can generate?greater organizational success. In fact, several academic and industry experts suggest business leaders can create?significant competitive advantage?by strengthening entrepreneurial mindsets.

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Table of Contents:

1. Business Agility and Entrepreneurship Have Been Weak for Decades
2. Business Agility and Entrepreneurial Mindsets Depend on Learning
3. We Need to 'Do Learning' Better
4. Conclusion

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Business Agility and Entrepreneurship Have Been Weak for Decades

Business agility and entrepreneurial competencies are essential for the renewal of businesses, economies, and societies. However, several reports show entrepreneurship, intrapreneurship, entrepreneurial competencies, and business agility are declining.

• Entrepreneurship is in decline:?2014?and?2018 Brookings reports?found that the number of?entrepreneurial ventures in the US has been declining, and entrepreneurial ventures are increasingly risk-averse. Overall, industry players have been consolidating, and reducing competition in many sectors of the economy. These reductions in competition could be the result of many factors such as: policies that favor established companies, misaligned incentives, growing financial insecurity among the age groups that are normally entrepreneurial, and not having the appropriate competencies, and overall uncertainty and complexity.
• Entrepreneurs do not seem to increase their success over time: Several research papers find that?repeat entrepreneurs do not necessarily increase their success?rates in subsequent ventures. This suggests that?learning is not automatic; learning must be intentional, and it must be supported appropriately.
• Intrapreneurship also has high failure rates: Organizational innovation and?change projects are consistently falling short of objectives. Industry and academic research point out that?generating sustainable change requires skills that are different competencies from building businesses in stable environments.
• Many entrepreneurial and intrapreneurial failures could be prevented or mitigated, and success rates can be improved.?For example, reports from Silicon Valley’s?Bill Gross’/IdeaLab,?Founder Institute,?ChubbyBrain, and?CB Insights?find entrepreneurial failure is mostly due to: wrong market timing, wrong business models, and the team’s ability to execute,?partner, create alliances, hire and/or build the business.?Interestingly, lack of capital and resources is often quite lot on the list of reasons for failure.

There are structural reasons for the decline in entrepreneurship and intrapreneurship. However, the decline and the failures are largely due to human weaknesses, such as insufficient business agility and entrepreneurial competencies.

The effects of these declines over the decades include reduced competitiveness and the ability to generate competitive advantage. This decline is especially troubling, as the coming years will be defined by massive, complex global and regional economic, political, environmental, and social challenges.?

Declining business agility and entrepreneurship have made our economies brittle and our business vulnerable.

Business Agility and Entrepreneurial Mindsets Depend on Learning

Business agility and entrepreneurship can be described as individuals or teams?taking risks for the purpose of creating value in the face of uncertainty, ambiguity, and complexity. This is a process of?effectuation: a repeating process that embraces creative conflict by:

• innovating (exploring to understand, and experimenting to learn) and
• commercializing or operationalizing (exploiting learning to capture value)

Learning, a critical source of competitive advantage, is fundamental to business agility and entrepreneurial mindsets.

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We Need to ‘Do Learning’ Better?

Our world has become more complex. However, our thinking, managing, and leading teams and companies have not evolved to embrace this complexity. We still think and learn linearly, and with an expectation of certainty and absolute outcomes.

Despite the importance of learning, it is often approached very simplistically. Education too often:

• focuses on developing technical (textbook) skills rather than experiential competencies (the ability to generate desired outcomes) and behavior change,
• assumes that learning and behavior change happen automatically, and
• ignores developing curiosity fostering constructive/creative conflict, and the need to learn-to-learn.

Current entrepreneurial competency development is largely ineffective?according to industry and?academic?research.

And an article in a leading management journal says?leadership is overly focused on the management of things, but ignores human needs and more challenging situations. This ‘dehumanization of?leadership’ is a result of the ‘ambiguity and precariousness’ of our world. We are not taught how to understand and work in uncertainty and complexity.

Without the ability to learn and without an entrepreneurial mindset, we are brittle and?victims?of uncertainty and complexity. An entrepreneurial mindset allows us to learn and transform ourselves and our organizations in response to, and in anticipation of, the environment changing around us.

Fortunately, we can develop our entrepreneurial mindsets. We can motivate and engage our stakeholders strategically so our organizations are much more agile and competitive. And we can work with and foster our ecosystems that lead to thriving.

Conclusion

Businesses will face more complex pressures over the next decade. Yet, because business agility, entrepreneurship, and intrapreneurship have been on the decline, we are not well-positioned to be respond effectively to those challenges.

An entrepreneurial mindset and business agility are the ability and willingness to continuously learn, transform, and evolve personally and collectively in response to and in anticipation of environmental changes. Learning is foundational to entrepreneurial mindsets and business agility. Developing learning competencies requires technical, experiential, and physiological competencies and the ability to learn-to-learn.

We can stop the decline of entrepreneurship, intrapreneurship, and business agility if we focus on strengthening our learning and entrepreneurial mindsets.

By developing the willingness and ability the competencies needed to embrace complexity, we will not only strengthen our businesses and economies, but we will also increase our competitiveness, and our ability to develop sustainable competitive advantage.

Are you up for the challenge?

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How do you increase your organization’s competitive advantage? What works for you?

If you find this article valuable, please?‘Like’ or comment; I’d love to hear your perspective!

If you’d like to explore how you could increase your and your team’s competitive advantage and breakthrough results, please connect with me.

Catarina von Maydell, MBA, works with leaders and teams to facilitate sustainable breakthrough performance improvement and growth.

#entrepreneurialmindset, #innovationleadership, #changeleadership, #strategicleadership?