Musings on Entrepreneurship and Innovation
Wednesday, November 09, 2005Leaders Are Elected
Chetan Dhruve asserts the following:
In the context of leading people, only an elected person is a leader. An unelected person is a dictator.
He notes the correlation between the welfare of nations and the degree to which they elect their leaders and calls for us to re-think the way we think about the design of our business organizations.
I concur. As I wrote most recently on the topic of democratic capitalism:
I just finished a delightful historical novel titled A Spectacle of Corruption. The backdrop of the story is early 18th century London, a time and place where the vested political and economic interests of the landed aristocracy were being challenged by proto-capitalists who gained their wealth through manufacturing and trade and the vote through their ability to purchase land. The economy had changed, and so did the landscape of democratic participation.
Could we be on the verge of a similar (and similarly messy) change today? Two hundred years ago, mercantilists' financial capital supplanted natural capital (i.e., land) as the key resource in the advanced economies of the world. Today, there is reason to believe that human, intellectual capital is ascendant. Might it be possible that knowledge workers who possess and control strategic know how will demand - and will be able to achieve - a meaningful role in business decision making? Will there come a day when Steve Jobs is elected (and fired) by the people who both invest in, and work for, the company?
I doubt that such a future will be the result of utopian visions of workplace justice. Rather, it will emerge in fits and starts for two reasons: A broader workplace franchise will yield more robust, sustainable decisions as measured in a competitive marketplace; and knowledge workers will have the power to insist on it.
Business: Democracy's Frontier
The Democratization of Entrepreneurship
Learning How to Avoid Bad Business Decisions
Via Business Pundit:
We tend to justify bad decisions. It happens all the time. This is why analysis done before hand doesn't just need to state the final decision, but what you expect the outcome(s) of that decision to be. Then (and this is the step people rarely do) you need to re-visit the decision later and analyze it. Did what you think would happen really happen? If not, why? Was it beyond your control? Was it bad information? Was it bad analysis? Was it poor execution? Keep track of your decision making, and like anything else, it will improve over time. The best way to avoid these cognitive biases is to be aware of them.
I'm trying to make better decisions in my work at Evergreen Innovation Partners using the following guidelines:
Iterate - Maintain flexibility in the face of uncertainty by breaking up decisions into phases.
Clarify Task and Intent - Business decisions are about the allocation of resources to achieve a goal. I've found it useful to follow the lead of the Marines by communicating task and intent: "Do X in order to achieve/learn/clarify Y." Learning is enhanced to the extent that you clarify desired outcomes.
Who is Responsible? Who is going to execute the task? Who needs to be informed? Consulted?
Make Assumptions Explicit - What are the key assumptions underpinning the decision?
Anticipated Next Steps - Once the task is accomplished and the outcome determined, what do you expect to do next if the outcome is expected? Unexpected?
Debrief - What were the outcomes of the decision? What were the benefits of the decision-making process. What concerns need to be addressed? How can you phrase the latter in terms of actionable questions (e.g., "How can we...?)?
Of course, these tools are predicated upon an environment of accountability and trust. To learn, we must view our actions as experiments, as questions. To ask a question is to admit a lack of omniscience. Such an admission means making yourself vulnerable, which requires trust.
Learning to make better decisions is hard, risky work. Maybe that's why most of us aren't that good at it.