Key To Do #1: Always write down what you think will happen
Always make sure you note your understanding and estimations of what will happen, and the views of your key advisors, before you test: “… the failure of the ‘launch it and see what happens ‘ approach should now be evident: you will always succeed – in seeing what happens. Except in rare cases, the early results will be ambiguous, and you won’t know whether to pivot or persevere, whether to change direction or stay the course” (Ries 161).
No matter how strongly you believe them, many of your views and beliefs about your venture are best guesses. For example, you have expected costs, but it may turn out that there are fluctuations in those costs – fluctuations that could have a significant impact on your venture. Therefore, as you move forward it is important to:
- have an understanding of what you need to be true in order for your social enterprise to achieve the social and financial goals you have set; and
- find out, in the cheapest, fastest, most effective way possible, whether they are true.
Key To Do #2: Seek True Progress
Define progress based on achieving key learnings (i.e. only move on to the next step when you have the learning you need), and do not get sucked into moving ahead on a pre-determined schedule (such as an artificial timeline) without that learning. Steve Blank provides a reminder of this trap, and how easy it is to fall into it, in his wonderful article “Strategy Is Not A To Do List”
This really comes down to the ability to know what to test, how to test, and how to learn from a test (for ease of reference, we will refer to these skills collectively as ‘effective learning’). It is the most important mindset for a social entrepreneur, indeed any entrepreneur, innovator, or agent of change. This is how important effective learning is:
- With effective learning, there is almost no obstacle that can’t be overcome, almost nothing you cannot achieve.
- Without effective learning, there is almost no resource, idea or opportunity you won‘t squander.
In fact, it is such a crucial mindset we are going to dig a bit deeper on what it entails and what it requires.
First, here are some leading authorities confirming effective learning is the crucial ingredient to your success:
“Learning is the unit of progress in entrepreneurship. It’s more important than making money, getting customers, building features, or engineering technical quality. Of course, those things are important, but only insofar as they contribute to learning what creates value and what creates waste…. At the outset, waste is anything that doesn’t contribute to the learning” (Michelman, Paul. “Why Eric Ries Likes Management.” Strategy + Business Online, 15 Jan, 2014, accessed www.strategy-business.com/article/00224?gko=82198).
“What differentiates the success stories from the failures is that the successful entrepreneurs had the foresight, the ability, and the tools to discover which parts of their plans were working brilliantly and which were misguided, and adapt their strategies accordingly” and “The modern rule of competition is whoever learns fastest, wins”, Eric Ries, author of The Lean Startup, Co-Founder of the Lean Startup Movement (84).
“The best leaders we studied did not have a visionary ability to predict the future. They observed what worked, figured out why it worked, and built upon proven foundations. They were not more risk taking, more bold, more visionary, and more creative than the comparisons. They were more disciplined, more empirical, and more paranoid”, Jim Collins, author of the best-selling Good to Great (9).
“Knowledge gives you a little bit of an edge, but tinkering (trial and error) is the equivalent of 1,000 IQ points”, Nassim Taleb, author of Fooled by Randomness, Black Swan, and Anti-Fragile.
Key To Do #3: Learn to love frustration
Any time you are frustrated or annoyed when something doesn’t go as planned, don’t ignore it or hate it, embrace it! The world is sending you a signal that things are not as you thought, giving you a golden opportunity to dig deeper and learn. By the way, if your frustration spurs you to simply conclude that someone or something is just stupid or wrong, keep digging (for example, see “A New Way to Evaluate Options” below), because that conclusion will only perpetuate the status quo (and your frustration) or lead to some type of war, be it cold, cultural, or cataclysmic.
Effective learning is very hard in its own right, but here are some common traps that you need to avoid:
Going deep in testing your assumptions, but not deep enough:
“The problem with most entrepreneurs’ plans is generally not that they don’t follow sound strategic principles but that the facts upon which they are based are wrong” (Ries 91). In other words, it’s not enough to just have a logical consistency in your thoughts/strategy. You also need to make sure the underlying assumptions your strategy is based on are sound.
Key To Do #4: A new way to evaluate options
With every issue you are struggling with (whether to diversify, whether to seek and accept an investor, whether to quit or double down, whether to hire someone, whether to enter into a year lease etc., etc.):
– Get beyond the traditional methodology of debating whether competing options are right or wrong and then picking one. Instead, in addition to any such debate, examine the truth each option may reflect (“Don’t ask whether something is true, ask what it may be true of”, Daniel Kahneman.);
– Examine if there is a solution that can embrace the strengths (i.e. embracing what each option is ‘true of’) of both options;
– Once you zero in on a possible solution, use the A.S.E.S.S. Testing & Learning worksheet
Mistaking some sales/ growth as a sign that you are on the right track to getting the growth you need:
“Most products – even ones that fail – do not have zero traction. Most products have some customers, some growth, and some positive results. One of the most dangerous outcomes for a start-up is to bumble along in the land of the living dead” (Ries 114)
It is easy to get swept up into Proforma Testing:
Don’t test just for the sake of testing, make sure your test will help you learn something (confirming some key aspect that you need to be right about, some fear that you need to be wrong about, or a key aspect that you are just unsure about) that you can use to move your venture forward. Avoiding pro forma testing is very similar to the “true progress” tip we described above and, together, these two issues signify the greatest challenge to effective learning – the appearance that you are doing effective learning, when you are not. As a cautionary tale in this regard, consider the chart below from the book The Innovator’s DNA (Dyer29). The chart tracks five key skills for innovation for four leaders and a substandard group that are dubbed the “noninnovators” (although Dyer et al use different names for the key innovation/learning skills, they are all covered in A.S.E.S.S.). The four leaders in innovation are Pierre Omodyar of eBay; Michael Dell of Dell Computers; Michael Lazaridis, founder of Research in Motion/BlackBerry; and Scott Cook of Intuit.
The cautionary tale of this chart is actually two-fold:
- Michael Lazaridis scores very highly among the top four, but later came to struggle mightily with BlackBerry: Success in effective learning yesterday does not guarantee you are learning effectively today. It is a journey, not a destination – always be vigilant to make sure you are learning effectively;
- Even the ‘non-innovators’ engaged in the innovating/learning skills!: Chances are your brain will tell you that you’re an innovator because you are questioning, observing, associating, experimenting, and networking. Fight that comfort. The fact that you are engaging in innovative activities is not enough to save you from being a ‘non-innovator’. You have to engage in these activities in the right way and in the right amount to ensure, as much as possible, the success of your venture.
Key To Do #5: Embrace ‘Productive Paranoia’:
As you develop or grow your social enterprise you will be faced with a number of obstacles and challenges, the key is to embrace these hurdles as opportunities to learn and develop tests that will allow you to capture insights that will guide your next steps. Please note that effective learning and productive paranoia are two of the six crucial mindsets for a social entrepreneur/changemaker. To learn more, click here.
Maurya, Ash. Running Lean: Iterate from Plan A to a Plan That Works. O’Reilly Media, Inc., 2012.
Aulet, Bill. Disciplined Entrepreneurship. John Wiley & Sons, 2013.
Christensen, Clayton M., Taddy Hall, Karen Dillon, and David. S. Duncan. Competing Against Luck: The Story of Innovation and Customer Choice. HarperCollins, 2016.
Collins, Jim. Good To Great: Why Some Companies Make the Leap…And Others Don’t. HarperCollins. 2001
Dyer, Jeff; Gregersen, Hal; Christensen, Clayton M.. The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators. Harvard Business Review Press, 2011
Gunther McGrath, Rita, and Ian C. MacMillan, Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Harvard Business Review Press, 2009.
MacMillan, Ian and James Thompson. The Social Entrepreneur’s Playbook. Wharton Digital Press, 2013.
Michelman, Paul. “Why Eric Ries Likes Management.” Strategy + Business Online, 15 Jan, 2014, accessed www.strategy-business.com/article/00224?gko=82198
Ries, Eric. The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. Currency, 2011.