Entrepreneurs have their own way of thinking which is different from the ordinary man. You can be walking in a dark street with an entrepreneur and be complaining about load shedding while he is busy thinking about the best possible way to have the street lights always on without the use of the unreliable ZESA power.
The mind of an entrepreneur looks for positives in negative situations. This mind has its own way of thinking and processing data. You might get the same information but you can both come out with different results.
As I was reading an Entrepreneurship book by Dr. Misrich and others, my perspective on the way entrepreneurs think was enhanced. Dr. Robert spoke about how entrepreneurs think. He talked about four established ways that interested me and I am convinced you will also find them interesting.
Given the nature of an entrepreneur’s decision-making environment, he or she must sometimes think in the following four distinct ways;
Effective entrepreneurship takes cognizance of the information available about the existing markets and technology. As such, forming opportunity beliefs often requires mental leaps that are informed by the environment entrepreneurs find themselves in.
Mental leaps can be in the form of appreciation of the availability of new or existing markets and possibly new technology that can be used to come up with new products or services for that market.
In order to have mental leaps, and ultimately think structurally, entrepreneurs make use of what they call structural similarities. These exist when the underlying mechanism of the technology resembles the underlying mechanism of the market.
The thinking process also needs to appreciate superficial similarities. These exist when basic elements of technology resemble basic elements of a market.
Let me explain what is meant by these terms in a practical sense.
Superficial similarities are concerned with comprehending only what is apparent or obvious while structural similarities look into a deeper understanding of how things work while also analyzing their makeup.
So structural thinking goes deeper into analyzing the makeup of a technology not what it was actually meant to accomplish.
Furthermore, it digs into how similar makeup can also be used in accomplishing a totally different objective.
I have seen some three-wheeled scooter that uses diesel generator engines. Security companies put sensors and alarms in houses that locate the house in the event of a break-in. Can’t the same system be used by humans when traveling so that they too can be located easily in the event of an incident?
Structural thinking is a higher order thinking that goes beyond scratching the surface as addressed in superficial similarities.
Engage In Bricolage
The world over, resources are scarce and in most cases, this limits the exploitation of opportunities. Real entrepreneurs need to come up with ways of getting around this challenge. The best way they can do it is by engaging in bricolage.
You will encounter new terminologies in this article, but it’s good to know the right terms for the right things.
The word bricolage means applying combinations of the resources at hand to new problems and opportunities.
This is making use of the already available resources and using them in a different way altogether.
Let me simplify this with an example that is closer to home. We all know that cow dung is often used as manure in fields. There is a team of sharp entrepreneurs who decided to use the same to produce biogas. Those who currently know very well that the Rural Electrification (REA) department of Zimbabwe Electricity Supply Authority has helped several schools in Zimbabwe utilize even pigs’ excretions in biogas generation.
Such kind of thinking would really change the world to be a place for us all.
Entrepreneurs are not limited in their thinking. They use the blue sky approach to thinking.
Business people and even ordinary men, in general, are trained to think rationally, which is good in most situations. But here is another way of thinking that entrepreneurs often use especially when tapping into opportunities and this is called effectuation.
This way of thinking was popularized by Professor Saras Sarasvathy from Darden University in Virginia. She found out that entrepreneurs do not always think through a problem in a way that starts with the desired outcome and focuses on the means to generate that outcome. Such a process is referred to as a causal process. But, entrepreneurs sometimes use an effectuation process, which means they take what they have (who they are, what they know, and whom they know) and select among possible outcomes.
An illustration of effectuation by Saras Sarasvathy (Adopted from the book Entrepreneurship by Misrich et al (2017)
Imagine a chef assigned the task of cooking dinner. There are two ways the task can be organized. In the first, the host or client picks the menu in advance. All the chef needs to do is to list the ingredients, shop for them and then actually cook the meal. This is a process of causation. It begins with a given menu and focuses on selecting effective ways of making the meal.
In the second case, the host asks the chef to look into the cupboards in the kitchen for possible ingredients and utensils and then cook a meal. Here, the chef have to imagine possible meals based on the given ingredients and utensils, select the menu, and then prepare the meal.
This is a process of effectuation. It begins with given ingredients and utensils and focuses on preparing one of many possible desirable meals with them.
Sarasvathy is a great cook, so it is not surprising that her examples of these
thought processes revolve around cooking.
Saras Sarasvathy’s theory of effectuation describes an approach to making decisions and performing actions in entrepreneurship processes, where you identify the next best step by assessing the resources available in order to achieve your goals, while continuously balancing these goals with your resources and actions.
According to Saras, effectuation differs from the causal logic, where there is a predetermined goal and the process to achieve it is carefully planned in accordance with a set of given resources. Sarasvathy argues that the causal logic is not suited for entrepreneurship processes that are inherently characterized by uncertainties and risks.
Cognitive adaptability is defined as the ability to effectively and appropriately change decision policies (i.e. to learn) when given feedback (inputs) from the environmental context in which cognitive processing is embedded (Haynie, Shepherd, & Patzelt, 2012).
It is important that I start with some definitions as this will shed more light on the issue at hand.
Entrepreneurs need to be informed about what’s happening around them and be in a position to positively change their way of thinking in line with the changes in the environment.
Cognitive adaptability describes the extent to which entrepreneurs are dynamic, flexible, self-regulating, and engaged in the process of generating multiple decision frameworks focused on sensing and processing changes in their environments and then acting on them.
Decision frameworks are organized on knowledge about people and situations that are used to help someone make sense of what is happening. Cognitive adaptability is reflected in an entrepreneur’s metacognitive awareness, that is, the ability to reflect upon, understand, and control one’s thinking and learning.
Specifically, metacognition describes a higher-order cognitive process that serves to organize what individuals know and recognize about themselves, tasks, situations, and their environments to promote effective and adaptable cognitive functioning in the face of feedback from complex and dynamic environments.
This becomes imperative to any entrepreneur who would want to remain relevant in the marketplace.
In summary, entrepreneurs have their own way of thinking that maximizes their ability to utilize opportunities that avails themselves in the marketplace. They normally do this using these four thinking processes:
1. Think structurally
2.Engaging in bricolage
I hope you are now an enlightened entrepreneur.