Don't Add Confusion to an Enterprise's Purpose
Curt Carlson, Ph.D.
Professor of Practice, Northeastern University and Distinguished Executive in Residence, WPI
Choosing the Right Concepts: Entrepreneurship, Management, Leadership, or Something Else?
Introduction:??In recent discussions, a colleague made the case for why "entrepreneurship" is the responsibility of all professionals. The reason was that all professionals must create value for their customers, and entrepreneurs, by definition, are all value creators. That is true. Value creation is indeed the responsibility of all professionals [1].
Another colleague suggested combining the entrepreneur and "manager" roles to yield better results. Additionally, the term "leadership" often enters the conversation. These three topics are taught in business schools, but often without a meaningful connection to value creation and innovation, the purpose of business. Thus, finding the most suitable terminology to describe what is expected from all professionals in different roles is often confusing.
As CEO of SRI, I rarely mentioned terms like "management," "entrepreneurship," or "leadership." While these concepts are critical when applied appropriately, they can occasionally imply notions of hierarchy, authority, and bureacracy and, in the case of entrepreneurship, a propensity for risk-taking and self-centeredness. These were all qualities we sought to mitigate. Because of these unfortunate associations, the popular comic strip "Dilbert" resonates with many.
Champions:??As CEO, I faced a choice. Should we redefine these business terms to align with our vision or adopt an alternative term that encompassed everyone and conveyed many essential concepts and human values? We opted for the term "champion."
We encouraged every individual to be a champion in their respective roles, whether in projects or other responsibilities. This concept applied universally, including to me as the CEO. Our rule was simple: no champion, no project, no exception. In today's competitive world, someone must step up, or success is effectively impossible.
Being a champion encompassed ideas everyone could relate to, such as achieving meaningful goals, addressing significant challenges, working hard within diverse teams, and exhibiting enviable human values. But it was not everything. What was missing was the specific task to be performed, and that was value creation. That had to be added.
The 3 Laws:??The only company I have encountered where everyone had a basic understanding of value creation and innovation was SRI during my tenure. We provided comprehensive training to all staff and implemented across the company the "3 Laws of Value Creation" [2]. These laws are:
Are there other companies where all professionals have a core understanding of value creation? I assume there are, but after interacting with thousands of professionals from top universities and companies, I have yet to discover them. If you know of one, please tell us. Perhaps this is one. [5]
If all professionals within a company understand these core value creation principles, we estimate that innovative performance can be improved by 2 to 10 times. Thankfully, advancements in AI make achieving this level of understanding and achievement across an enterprise much more feasible [6, 7].
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It's worth noting that nearly all business schools, incubators, and many government organizations, including NSF, teach entrepreneurship. However, we have found that the effectiveness of this instruction is often limited and sometimes unproductive. For example, most entrepreneurial programs do not effectively teach the foundations of the value-creation process, which starts with a compelling, quantitative value proposition (e.g., an NABC value proposition) [3].
One mistake from these programs is that teams often leap from a problem to a venture pitch for the solution without first identifting the actual unmet end-user need. This inevitably leads to incomplete or wrong proposals. This mistake is so common we call it "The leap to failure."
Conclusion:??Concepts like entrepreneurship, management, and leadership have great value when applied correctly. However, eliminating the confusion surrounding these terms, when they are used broadly in an enterprise, is often challenging. If not addressed, it leads to unproductive outcomes.
Focusing first on value creation in university and company education programs is a critical first step for aligning everyone of the puporse of business, creating and retaining a customer [8]. It serves as the fundamental starting point for all initiatives whoes intent is to create value for others and it applies to all professional disciplines and positions. It sets the predicate for effective entrepreneurship, management, and leadership.
If all professionals grasped the basics of value creation, much of the confusion we see with complex business terms would dissipate. It would also lead to a shift in the mental models of most professionals from being problem-solvers to those capable of identifying and addressing the needs of others. That shift in mindset is transformative and would profoundly improve innovative outcomes.
References
Go here for Linkedin: https://www.dhirubhai.net/groups/1232507
Go here for Coursera: https://www.coursera.org/learn/valuecreation