How to create new businesses and new markets by managing risks effectively
This is one of the volumes in a series of anthologies of articles that first appeared in Harvard Business Review. Having read all of them when they were published individually, I can personally attest to the high quality of their authors’ (or co-authors’) insights as well as the eloquence with which they are expressed. This collection has two substantial value-added benefits that should also be noted: If all of the articles were purchased separately as reprints, the total cost would be at least $60-75; also, they are now conveniently bound in a single volume for a fraction of that cost.
Those who need best practices and ideas for launching new ventures will find the material in this HBR book invaluable. It is one of the volumes in a series of anthologies of articles that first appeared in Harvard Business Review. Authors of the nine articles focus on one or more components of a process by which to zero in on the most promising prospects, set a clear direction for a start-up, test and revise assumptions along the way, tackle risks that could sabotage efforts, carve out opportunities in emerging markets, launch a start-up within an existent organization, and hand over the reins once the enterprise is established.
In several of the articles, the power and value of asking the right questions is stressed, occasionally demonstrated. I now provide two brief excerpts that are representative of the high quality of all nine articles. In both, asking the right questions is demonstrated:
In “Finding Competitive Advantage in Adversity,” Bhaskar Chakravorti suggests that these five questions be asked when the objective is to “unearth the competitive advantage that adversity can offer”:
1. What under lying needs in your market are being curtailed by adversity? Have new needs emerged because of the adverse circumstances?
2. Look broadly across your business and in completely unrelated areas. What resources – products, people, materials, technologies, or intellectual property – are being displaced or underutilized because of the adversity?
3. Can you see a way to use resources from your answers to question 2 to fulfill a need you identified in question 1?
4. What is the minimum change that customers or your value chain require to adopt your offering? Then, what subsequent changes are likely, and how far could the adoption spread?
5. Can you repeat you success with questions 1 to 4 in additional markets, such as new customers or new products?
In “The Questions Every Entrepreneur Must Answer,” Amar Bhidé notes that of the hundreds of thousands of business ventures launched each year, many never get off the ground. Others fizzle after spectacular rocket starts.
“Why such dismal odds? Entrepreneurs — with their bias for action – often ignore ingredients essential to business success. These include a clear strategy, the right workforce talent, and organizational controls that spur performance without stifling employees’ initiative.
“Moreover, no two ventures take the same path. Thus entrepreneurs can’t look to formulas to navigate the myriad choices arising as their enterprise evolves. A decision that’s right for one venture may prove disastrous for another.
How to chart a successful course for your venture? Bhidé recommends asking yourself these questions:
Where do I want to go?
How will I get there?
Can I do it?
Improvisation takes a venture only so far. Successful entrepreneurs keep asking tough questions about where they want to go – and whether the track they’re on will take them there.
Other articles in this anthology I especially enjoyed include: Noam Wasserman’s “The Founder’s Dilemma,” John Ham’s “Why Entrepreneurs Don’t Scale,” and David A. Garvin and Lynn C. Levesque’s “Meeting the Challenge of Corporate Entrepreneurship.”
American Entrepreneur: The Fascinating Stories of the People Who Defined Business in the United States
Larry-Schweikart and Lynne-Pierson-Doti
In Their Time: The Greatest Business Leaders Of The Twentieth Century
Anthony Mayo and Nitin Nohria
Paths to Power: How Insiders and Outsiders Shaped American Business Leadership
Anthony Mayo, Nitin Nohria, and Laura G. Singleton