The Value Creators Podcast Episode #41 – Projjal Ghatak On Harmonization Via Collaborative Team Development

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Teams are the new focal point of organizational design and organizational function. Motivation – quantified as “energy” by Projjal Ghatak and Onloop – is the key to team performance. Technology is advancing to the point where motivation can be monitored using AI, and self-reported feedback and other nuanced approaches to understanding and improving motivation levels are delivering real progress. Purpose portfolios can align individual motivations with organizational goals, capturing the role of purpose in driving productivity and engagement.

Projjal mentioned companies experimenting with holocracy and distributed flat organizations, although scaling such structures was noted as challenging due to inherent human tendencies to seek direction and guidance. The conversation also explored frameworks like RAPID (Bain’s Responsible, Accountable, Perform, Informed, Decide model) and spans of control, highlighting strategies for optimizing organizational effectiveness and managerial efficiency.

Projjal emphasized the importance of respect and trust in leadership dynamics, noting that effective leaders inspire motivation and engagement through their actions and guidance. The role of AI in augmenting managerial capabilities and increasing spans of control was also discussed, highlighting the potential for technology to enhance organizational structures and improve managerial effectiveness.

Resources: 

The Post-Managerial Era (Blog Post) 

Connect with Hunter Hastings on LinkedIn 

Connect with Projjal Ghatak on LinkedIn

onloop.com

Knowledge Capsule:

Changing Business Organization

Evolution of Management Concepts:

  • Traditional management concepts from the industrial age are thoroughly outdated.
  • The ideas of “managing” and “being managed” have no place in the 21st century business world.
  • Modern businesses use software for global coordination and collaboration.

Role of Managers:

  • Businesses face challenges in maximizing the potential of human resources
  • There are significant changes in managerial roles due to technological advancements.
  • We can reject the traditional definitions of management.
  • Think instead about a collaboration and coordination role.
  • And make the distinction between managers, leaders, and coaches, each with specific roles.

Managerial Challenges:

  • One of the problems of the management concept is bad management – the wrong people with the wrong relationships with others.
  • Many businesses lack effective managers, especially among first-time managers.
  • This issue is consistent across different regions, industries, and business sizes.

Collaborative Team Development Software:

  • Using technology to simplify complex problems in leadership and management.
  • Inspiration from the fitness industry: breaking down tasks into manageable parts.
  • Focus on motivation (energy), clarity on goals, and feedback.
  • Technology structures management tasks, making them less dependent on individual skills.

Origins of Onloop:

  • Personal experiences with inadequate tools led to the creation of Onloop.
  • Differentiation between talent-focused technology and HR-focused technology.

Performance Management:

  • Traditional performance management processes are inefficient.
  • Introduction of microfeedback to replace traditional feedback methods.

Automation and AI:

  • Use of AI to automate performance reviews (which, in their original form, are the worst management tools!) and synthesize feedback.
  • Focus on reducing friction around regular feedback and enhancing productivity.

Engagement Focus:

  • Employee engagement levels are dangerously low according to Gallup and other surveys.
  • Engagement can be enhanced through CDT product usage, increasing both motivation and  effectiveness.
  • Regular usage reviews to understand product performance and areas for improvement.

People Management vs. HR Management:

  • People management focuses on productivity and team performance.
  • HR management is more about compliance and administrative functions.

Hybrid and Distributed Teams

  • Hybrid teams traditionally mean a mix of remote and in-office workers.
  • Modern context includes geographically and functionally distributed teams.
  • Diverse teams require intentional management practices.
  • Structured cadences and rhythms are necessary for effective collaboration.

Challenges in Hybrid Teams

  • Informal feedback loops are disrupted in remote settings.
  • Leaders need to adapt to structured communication tools like Zoom and Slack.
  • Leaders accustomed to in-person interactions struggle with remote management.
  • There’s a need for intentional rituals to maintain clarity and motivation.

Rituals and Cadences:

  • Regular all-hands meetings to build relationships and rapport.
  • Structured one-on-one conversations using frameworks like CDD (energy, goals, feedback, skills).

Calendaring Everything:

  • Scheduling all important activities to ensure they happen.
  • Emphasis on intentionality in scheduling to maintain productivity and team cohesion.

Collaborative Team Development:

  • Shift from traditional performance management to continuous feedback and goal setting.
  • Using technology to automate and simplify performance reviews.

Reducing Bias:

  • Replacing manual reviews with automated summaries to minimize bias.
  • Focus on observations and work outcomes rather than subjective ratings.

Bias in Traditional Systems:

  • Eloquence bias and gender disparity in leadership roles.
  • Extroverted, assertive individuals are often rewarded over more reserved team members.

Equal Outcomes through Technology:

  • Using machine learning to ensure fair assessments and reduce bias.
  • Focusing on objective performance metrics to support diversity and inclusion.

Self-Reported Metrics:

  • Currently, motivation is self-reported as a “battery level” (full, empty, or in between).
  • This data is visible only to the manager to maintain psychological safety.

Potential for AI:

  • AI is not yet capable of accurately detecting motivation through behavior or dialogue.
  • Future potential for AI to infer motivation from observations and interactions.

Integration of Well-being and Performance

  • Well-being (referred to as energy levels or motivation) is crucial for productivity.
  • Addressing anxiety and mental health as part of performance management.
  • Reframing “wellness” as “energy levels” to increase engagement and acceptance among leaders.
  • Regular energy checks are popular and help gauge team motivation.

Defining Purpose Portfolios:

  • Employees should have clear purpose portfolios that align personal and professional goals.
  • Activities should support these purpose pillars, enhancing motivation and fulfillment.

Future of Work with AI:

  • AI will push humans to focus on uniquely human attributes, such as purpose and service orientation.
  • Emphasizing service to others as a core component of motivation and leadership.

Impact of AI and VR:

  • AI and immersive virtual reality will significantly change the nature of work.
  • Countries like the Philippines could see economic growth by leveraging these technologies.

Rethinking Workforce Strategy:

  • Developed countries need to adapt to a future where AI and VR redefine competitive and cost-effective labor.

Challenges in Current Structures:

  • There is a desire to eliminate traditional hierarchies and silos within organizations.
  • Future discussions to explore how firms can adapt and restructure to be more efficient and inclusive in a technologically advanced landscape.

Hierarchical Structures and Human Nature:

  • Humans are wired to follow direction, as seen in parental guidance during childhood.
  • This inclination often translates into a preference for hierarchical organizational structures.

Challenges with Holacracies:

  • While holacratic structures like Hire exist, they face scalability issues.
  • Humans’ inherent need for direction makes fully flat, networked structures difficult to implement effectively.

Frameworks for Organizational Management:

  • Bain & Company’s RAPID framework (Responsible, Accountable, Perform, Informed, Decision-maker) offers a structured approach to organizational management.
  • Optimal spans of control (4-8 direct reports per manager) can enhance managerial efficiency.

AI’s Role in Management:

  • Advancements in AI enable managers to handle larger spans of control by delegating routine tasks to AI systems.
  • This allows managers to focus more on strategic decision-making and less on routine operational tasks.

The Value Creators Podcast Episode #40 – Kimberlee Josephson: A Better Understanding of the Role of Business in Society

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Kimberlee Josephson is an associate professor of business at Lebanon Valley College, and an insightful and energetic promoter of entrepreneurship and free markets at The American Institute For Economic Research. 

Resources: 

Connect with Kimberlee Josephson on LinkedIn 

Read Kimberlee Josephson’s articles at AIER

Connect with Hunter Hastings on LinkedIn

Learn Entrepreneurial Value Creation with our Value Creators Online Course 

Show Notes:

0:00 | Intro
2:02 | Kimberlee Josephson’s Background
3:53 | Big Picture of Capitalism
8:16 | What was the Problem?
11:34 | How Kimberlee Teaches Power Structure and Other Programs
17:19 | Companies Prioritizing Morals Over Profi.
19:55 | Maximizing Shareholder Value: Research Perspective
23:04 | Antitrust: Government’s Role in Business Scrutiny
28:15 | Monopoly as a Business Goal: Darker Motives
33:15 | Critics of Capitalism: Distorted View of Competition
37:21 | Focus on Positive Business Dynamics, Not the Destruction Part
39:44 | Value Creators Online Course
40:57 | Business Education 
44:23 | Redefining Entrepreneurship 
46:44 | Academia Being Non-Dynamic: Where to Get Business Education? 
51:38 | Wrap-Up

Knowledge Capsule:

Critics of capitalism and of business are misdirecting us with their concerns about business morality and resource allocation:

  • It’s a mistake to put companies in the role of becoming moral arbiters and shifting focus from profit-oriented to purpose-oriented strategies.
  • Kimberlee raised caution against organizations diverting resources towards social causes, potentially at the expense of core competencies and shareholder interests.

CSR and the Stakeholder Mindset are detrimental to the true role of business:

  • Kimberlee discusses her skepticism about corporate social responsibility (CSR) and the stakeholder mindset.
  • She expresses concerns about the effectiveness of CSR and its potential for harm, such as dependency-based relationships and rent-seeking behavior.
  • CSR became even worse when it evolved to Environmental, Social, and Governance (ESG) initiatives – a more specific set of interventions in the conduct of business.
  • Measuring and implementing imposed ESG standards are problematic, and there are great concerns about regulatory power.

The true role of Business in Society:

  • Kimberlee explores the multifaceted role of business in society, including addressing negative externalities and creating positive externalities.
  • Reference is made to Archie Carroll’s CSR pyramid, emphasizing economic, legal, ethical, and philanthropic responsibilities of businesses.
  • Business increases well-being for customers, and therefore for society.

Criticism of Government Intervention and Antitrust Measures:

  • Kimberlee expresses frustration with government intervention in business, particularly regarding antitrust measures and criticisms of large-scale companies.
  • Antitrust regulations hinder businesses’ ability to compete and innovate freely.

Differentiation is strategic, high market share is not a problem: 

  • Through excellence in differentiation, it’s possible to create a market space with little to no competition (Blue Ocean strategy).
  • Regulators express concerns about such market activity, as evidenced by the concerns raised by Lina Khan about excessive market share.
  • Large firms achieve dominance through profitability, attractiveness, and scalability, which reflects consumer choices. High market share simply means more customers are happy.

Government Intervention in Mergers and Acquisitions: 

  • Anti-trust legislation and actions are examples of government interference in business transactions, in this particular case,  mergers and acquisitions.
  • Kimberlee is an advocate for the separation of politics and economics: The marketplace will sort out whether mergers and acquisitions are good for customers.
  • It can be inefficient to have multiple providers. Kimberless discusses Milton Friedman’s perspective on the inefficiency of having multiple providers for essential services like telephone poles.

Monopoly Power and Innovation: 

  • Monopolies seldom last long in the market. Kimberlee reflects on past concerns about monopolies such as Netflix and the rapid emergence of numerous competitors and customer options..
  • Competition drives businesses to innovate and improve efficiency; Kimberlee cited case studies such as Dyson’s disruptive innovations in the vacuum cleaner industry.

We can change attitudes through business education at every point in the education pipeline:

  • From High School to community college to university undergraduate and graduate streams to executive and entrepreneurial education, it’s the task of business education to re-establish principle-based understanding of the role of business.
  • Kimberlee Josephson is an active leader in this space.
  • Value Creators is trying to help: https://thevaluecreators.mykajabi.com/value-creators

The Value Creators Podcast Episode #39: Dr. Elias Aboujaoude: A Leader’s Destiny

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Leadership is not what the business schools and coaching industry tell you it is.

“A Leader’s Destiny” challenges conventional notions of leadership, offering a thought-provoking exploration into the complex interplay of psychology, culture, and society. Written by Elias Aboujaoude, the book delves deep into the modern leadership landscape, dissecting prevalent trends and highlighting the need for a paradigm shift in how we perceive and cultivate leaders.

It highlights how leadership has been oversimplified into formulaic steps and mnemonic devices, creating an illusion of quick mastery. This reductionist approach fails to capture the complexity of human behavior and context, lacking empirical support. Instead, Dr Aboujaoude proposes a shift towards viewing leadership as a state of mind, emphasizing psychology over pseudoscience and recognizing individual uniqueness. This reframing calls for a departure from the business school model of leadership, advocating for a more personalized and nuanced understanding rooted in psychology and character.

Dr. Aboujaoude’s  Value Creators podcast discussion with Hunter Hastings delves into the often-overlooked role of followership, critiquing the prevalent focus on grooming leaders at the expense of valuing followers. It emphasizes the importance of acknowledging followers as essential components of effective leadership and calls for a more balanced perspective that appreciates their contribution. Additionally, the conversation touches upon the significance of empathy and humility in leadership, advocating for emotionally intelligent and empathic leaders who understand the role of luck and serendipity in their success. Overall, the discourse prompts a critical reflection on current leadership culture, urging a reevaluation of conventional wisdom and a renewed focus on psychology, individuality, and genuine concern for both leaders and followers alike.

Resources: 

Connect with Hunter Hastings on LinkedIn

Connect with Dr. Elias Aboujaoude on LinkedIn

To Read, Sample, and Buy the Book on Amazon: A Leader’s Destiny: Why Psychology, Personality, and Character Make All the Difference

Show Notes:

0:00 | Intro
0:18 | Leadership Industrial Complex.
2:56 | Supply Demand Analysis: How Did Leadership Manufacturing Start
4:44 | Crisis: Leadership Demand Mismatch
8:59 | Attention Economy: Impact on Leadership
11:52 | Redefining Leadership: Psychology Perspective
17:34 | Leadership: Moving Beyond Formulaic Approaches
20:12 | Leadership Challenges: Left Hemisphere Dominance
22:45 | Individual Uniqueness vs. Formulaic Approach
24:46 | Charisma
30:05 | Fostering Effective Followership
32:18 | Distributed Leadership
34:42 | Leadership-Free Concept: Network Structure
35:40 | Culture 
40:38 | Cultural Reflection: Emphasizing Empathy
43:34 | Luck and Serendipity
46:34 | Whether Elias is Optimistic OR Not?
49:00 | Wrap-Up: A Leader’s Destiny Book

Knowledge Capsule

Leadership Industrial Complex

  • Elias Aboujaoude explains that society’s obsession with leadership establishes an exaggerated demand that the leadership industry supplies.
  • Society sends toddlers to “leadership academies” and prefers leadership titles.
  • Leadership is marketed as a science, making it seem universally accessible. This creates an inferiority complex in individuals who feel inadequate without leadership roles.

Evolution and Crisis of Leadership

  • Humans naturally seek leaders due to evolutionary tribal needs.
  • Society today resists hierarchical structures, creating a conflict with our innate desire for leadership. This leads to seeking leaders in inappropriate places.
  • Despite extensive leadership education and resources, inspiring leaders are scarce.
  • Leadership failure persists in academia, corporate culture, and politics. The crisis stems from minimizing the importance of psychology and character in leadership.
  • The conveyor belt approach to leadership allows unsuitable individuals to rise, often favoring narcissists and sociopaths.

Psychological Foundations of Leadership

  • Modern leadership culture often ignores psychological aspects.
  • Executive coaches, lacking formal psychological training, exacerbate this issue.
  • Studies show personality traits remain stable over decades, challenging the notion that leadership qualities can be quickly developed through training.
  • Genuine personality change is a long-term process, contradicting the idea that brief coaching sessions can effectively transform individuals into leaders.

Formulaic Approach in the Coaching Industry:

  • Dr. Aboujaoude highlights that the coaching industry often promotes a formulaic approach with specific steps like the “four C’s” and “9 proven steps”.
  • Quantitative vs. Qualitative: He points out the industry’s tendency to favor quantitative methods over qualitative, more personalized approaches.
  • He emphasizes the difference between these formulaic methods and the non-formulaic nature of psychological understanding.

Use of Mnemonics in Leadership Teaching:

  • Dr. Aboujaoude discusses how mnemonics are widely used in leadership teaching as part of the “Leadership Express” approach.
  • Simplistic Tools: These tools are sold as easy-to-remember hacks and tips that supposedly guarantee successful outcomes.
  • Dr. Aboujaoude criticizes the oversimplification and lack of substantial data supporting the effectiveness of these mnemonics.

Leadership as a Pseudo-Science:

  • The industry promotes leadership studies as a STEM field to give it credibility and reduce criticism.
  • Commercialization of Leadership: Leadership is marketed as an easily attainable science, which supports the business of leadership training.
  • There is no substantial data to back the claims that these leadership methods are universally effective.

Hierarchical vs. Subjective Approaches in Leadership

  • Hunter mentions Ian McGilchrist’s concept of left hemisphere dominance, emphasizing lists, plans, and strategies over human values.
  • Born Leaders vs. Circumstantial Leaders: Hunter notes that leadership can be contextual, depending on circumstances rather than just inherent traits.

Individual Uniqueness in Leadership:

  • Leadership should be about individual uniqueness rather than fitting into predefined traits.
  • The current trend of branding leaders with checklists of traits undermines true individuality.

Mystique and Charisma in Leadership:

  • The value of natural leaders is somewhat inscrutable, allowing followers to project their aspirations onto them.
  • The trend of oversharing on social media diminishes the mystique and reduces the effectiveness of leadership.

Concept of Charisma:

  • Historically, charisma is seen as a gift, not something that can be taught.
  • Elias Aboujaoude criticizes the idea of teaching charisma through courses, equating it to playing god.
  • True charisma is unique and cannot be reduced to steps or tips.

Role of Followers in Leadership:

  • The current leadership culture often ignores followers or sees them only as potential leaders.
  • Dr. Aboujaoude emphasizes the importance of appreciating followers for who they are and their role in supporting leaders.
  • The push to turn everyone into leaders can give followers an inferiority complex.

Distributed Leadership:

  • Hunter discusses the concept of distributed or democratic leadership, where leadership roles are shared among team members.
  • Elias notes that while democratic leadership can enhance morale, it can also be inefficient in times of crisis.
  • He questions whether true leadership can exist without some degree of hierarchy.

Cultural Challenges to Leadership:

  • There’s an increasing aversion to hierarchical structures, making traditional leadership roles more challenging.
  • The lack of privacy in the digital age compromises leaders’ ability to maintain a mystique and manage perceptions.
  • Persistent biases, especially against women, limit the pool of potential leaders and affect leadership culture.

Empathy in Leadership:

  • Emotional Intelligence: Empathy, as part of emotional intelligence, is a crucial trait for effective leadership.
  • Current Leadership Traits: The focus on traits can result in narcissism and sociopathy; there’s a need to shift towards nurturing empathetic leaders.
  • Cultural Shift Needed: A cultural shift towards valuing empathy and emotional intelligence in leaders is necessary.

Role of Luck and Serendipity

  • Great leaders often benefit from being in the right place at the right time, a factor not commonly acknowledged.
  • Many scientific discoveries are serendipitous, suggesting that leadership success can also involve elements of luck.
  • Recognizing the role of luck can bring humility and a more realistic approach to leadership development.

Optimism for the Future:

  • Dr. Aboujaoude is cautiously optimistic, believing that a deep cultural reflection can address the current leadership crisis.
  • Drawing parallels from changes in technology and psychology, he sees potential for a similar shift in leadership culture.
  • Despite the optimism, significant challenges remain in transforming the leadership industry.

The Value Creators Podcast Episode #38: Professor Mark Packard On the Future Of Business Education

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Entrepreneurship can be learned via philosophy and principles: cultivating an entrepreneurial mindset, fostering adaptability, and problem-solving skills, and embracing dynamic market processes.

Mark Packard, Professor Of Business And Entrepreneurship at Florida Atlantic University and Director of the Madden Center for Value Creation, contrasts entrepreneurial business education with traditional business paradigms. An entrepreneurial curriculum focuses on dynamic market processes and the pivotal role of the entrepreneur in the capitalist market system. Mark proposes experiential learning, where students engage with real-world challenges, fostering adaptability and problem-solving abilities crucial in today’s rapidly changing business landscape.

Mark emphasizes the broader impact of entrepreneurial thinking, spanning industries such as healthcare, where innovative models like direct primary care challenge established norms. By integrating philosophical insights and subjectivism, entrepreneurial education can cultivate a mindset of continuous learning and value creation. Mark underscores the importance of introspection and experimentation in breaking free from conventional thinking patterns. Ultimately, the conversation highlights the transformative potential of entrepreneurial education in fostering innovation, adaptability, and societal change across all sectors.

Resources:

Connect with Hunter Hastings on LinkedIn: 

Connect with Mark Packard on LinkedIn: 

Check out The Value Creators Online Course by clicking here.

FREE PDF: 26 Ways To Think Better about Business.

Mark Packard: Entrepreneurial Valuation: An Entrepreneur’s Guide To Getting Into the Mind of Customers

Knowledge Capsule

Current Challenges in Business Education:

  • Traditional business education relies on methods and processes from the industrial era, which may not align with the needs of the digital age.
  • Educational institutions exhibit reluctance to adopt new approaches due to institutional inertia and established norms.
  • There are inefficiencies in both teaching methods and organizational structures within educational institutions, leading to suboptimal outcomes.
  • Business education often fails to foster entrepreneurial mindsets and skills, which are increasingly essential in today’s business landscape.

Importance of Subjectivism in Business:

  • Subjectivism is a strange-sounding concept for business – but understanding it is essential for creating value, which is the purpose of all business.
  • Subjectivism highlights the significance of individual intentions, values, and perceptions in shaping economic behavior.
  • Emphasizing subjectivism encourages businesses to prioritize understanding customers and meeting their diverse needs and preferences as individuals, in both B2B and B2C..
  • Subjectivist thinking challenges the traditional focus on processes and methods in management, enabling a more creative, more adaptive, more innovative, and therefore more customer-oriented approach.

Entrepreneurship as the core strategy for all businesses::

  • Entrepreneurship involves creating innovative value propositions that address emerging customer needs or desires.
  • Entrepreneurial organizations are better positioned to adapt to market changes and to bring innovative new solutions to market quickly, leading to sustained competitive advantage.
  • Businesses that embrace entrepreneurship as their core strategy are more likely to achieve long-term success and resilience in dynamic market environments.

Focus on Customer Experience:

  • Prioritizing the customer experience involves designing products, services, and interactions around customer preferences and desires.
  • Companies like Amazon and Apple exemplify the benefits of focusing on delivering exceptional value experiences, leading to customer loyalty and market dominance.
  • Customer-centric businesses continuously seek feedback and iterate on their offerings to ensure they remain aligned with evolving customer expectations.

Ambidextrous Organizations:

  • Ambidextrous organizations effectively balance the need for innovation (entrepreneurship) with operational efficiency (management).
  • Achieving ambidexterity often requires structuring teams or departments dedicated to innovation alongside those focused on day-to-day operations.
  • In today’s fast-paced business environment, ambidexterity is critical for organizations to navigate uncertainty and drive sustainable growth.

Influence of Austrian Economics:

  • The only real economics for business: traditional economics thinks top-down in aggregates like GDP, the output of an economic machine that can be manipulated and managed. The brand of economics for business is bottom up, thinking about value for individual customers and the entrepreneurial processes to deliver value.
  • Subjective Value: Austrian economics emphasizes the subjective nature of value, highlighting that value is determined by individual preferences rather than objective measures.
  • Dynamic Market Processes: Austrian economics offers a more realistic understanding of market dynamics, emphasizing the role of entrepreneurship and spontaneous order in economic outcomes.
  • Implications for Business: Businesses informed by Austrian economics are more attuned to customer preferences, market uncertainties, and the importance of innovation in driving economic growth.

Alternative Curriculum Proposal:

  • The proposed curriculum seeks to integrate entrepreneurial principles, customer-centricity, and complex thinking into business education.
  • The program may include courses on entrepreneurial mindset development, customer experience design, complexity theory, and innovation management.
  • Students would engage in real-world projects and experiential learning opportunities to apply theoretical concepts in entrepreneurial contexts, fostering a holistic understanding of business dynamics.

Importance of Entrepreneurship-Centered Education:

  • Emphasis on understanding the dynamic nature of the economy, influenced by Austrian economics principles.
  • Highlights the pivotal role of the entrepreneur in navigating market complexities and driving innovation.
  • Prioritizes teaching how ideas are generated, developed, and translated into innovative products or services.

Curriculum Design:

  • Entrepreneurial Mindset Development: Focuses on cultivating an entrepreneurial mindset, which includes creativity, adaptability, and problem-solving skills.
  • Practical Skills: Includes essential operational knowledge such as accounting, finance, and organizational structure, but with a secondary emphasis.
  • Real-World Learning: Incorporates experiential learning opportunities where students tackle real challenges faced by partner businesses, fostering practical application of entrepreneurial principles.

Learning Experience Approach:

  • Integrates a practicum or capstone experience where students work on real challenges brought by partner businesses, resembling an internship or consultancy.
  • Contrasts with traditional business school capstones, which often rely on simulation games and lack real-world applicability.
  • Provides students with opportunities to apply entrepreneurial thinking to real-world business problems, enhancing their problem-solving abilities.

AI’s can’t be entrepreneurs::

  • Professor Packard acknowledges AI’s inability to think entrepreneurially due to its reliance on historical data and lack of creativity.
  • Emphasizes the unique ability of humans to engage in counterfactual thinking and true entrepreneurial creativity.
  • Recognizes AI’s potential as a tool for prompting ideas but underscores the irreplaceable role of human creativity in entrepreneurship.

Impact on Hiring and Company Culture:

  • Highlights the difficulty companies face in identifying candidates with an entrepreneurial mindset and problem-solving skills.
  • Emphasizes the need for employees who can adapt to changing environments and proactively solve problems.
  • Discusses the potential for new hires with entrepreneurial mindsets to influence and improve company cultures, fostering adaptability and innovation.

Entrepreneurial Mindset Beyond Business School:

  • Recognizes the value of philosophical thinking in fostering open-mindedness and innovative insights.
  • Encourages individuals from diverse backgrounds to embrace entrepreneurship, emphasizing that anyone can develop entrepreneurial skills with the right mindset and learning.

Potential Impact Beyond Business Education:

  • Discusses the potential for entrepreneurial thinking to revolutionize industries beyond business, such as healthcare, through initiatives like direct primary care.
  • Highlights the relevance of subjectivist thinking and value creation principles in various fields, enabling individuals to identify innovative solutions to complex problems.
  • Foresees entrepreneurship as a driving force for positive change in all sectors,and at all scales and business stages, fueled by individuals equipped with entrepreneurial mindsets and skills.

Cultivating Entrepreneurial Thinking:

  • Encourages introspection to challenge existing assumptions and explore alternative approaches to problem-solving.
  • Advocates for learning from diverse perspectives and experiences to broaden one’s understanding and stimulate entrepreneurial thinking.
  • Stresses the importance of ongoing learning and experimentation in fostering an entrepreneurial mindset and adapting to evolving challenges and opportunities.


The Value Creators Podcast Episode #37: Bill Aulet Disciplined Entrepreneurship

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Disciplined entrepreneurship refers to an approach to starting and growing a business that emphasizes rigorous application, methodical processes, and practical tools to achieve success. This concept, discussed by Bill Aulet in his book “Disciplined Entrepreneurship“, involves systematically identifying needs, customers, and markets, validating ideas and experiments, and executing plans with discipline and focus. It includes understanding customer needs deeply, developing innovative solutions, and creating value in a structured manner. By following disciplined entrepreneurship, entrepreneurs can increase their chances of building sustainable businesses and navigating the challenges of the rapidly changing market landscape.

Bill Aulet and Hunter Hastings discuss various aspects of entrepreneurship, focusing on proven methodologies (Bill has multiple successful launches from the MIT incubator as case studies) and practical approaches to building successful businesses. They emphasize the importance of understanding customer value, rigorous market research, and adopting innovative business models tailored to customer needs.

Bill emphasizes the significance of a beachhead market strategy over traditional total addressable market calculations and he emphasizes that the primary challenge to entrepreneurs is to identify customers’ top priorities, fears, and motivations, aligning their value proposition accordingly.

The dynamic landscape of entrepreneurship in the digital era is characterized by the emergence of innovative pricing strategies, such as dynamic pricing and subscription-based models, which present novel opportunities for value realization.

Resources: 

Connect with Hunter Hastings on LinkedIn

Connect with Bill Aulet on LinkedIn

MIT: entrepreneurship.mit.edu

To Read, Sample, and Buy the Book on Amazon: 

1st Edition: Disciplined Entrepreneurship: 24 Steps to a Successful Startup, 1st Edition

2nd Edition: Disciplined Entrepreneurship: 24 Steps to a Successful Startup, Expanded & Updated

Show Notes:

0:00 | Intro
2:43 | The Big Picture Principles: What is a Mindset?
6:44 | Entrepreneurship as a Craft and Not a Science
9:06 | Learning Entrepreneurship: Can Entrepreneurship be Taught in Corporations?
10:54 | Can you Teach Google Enterprenerurship?
16:13 | Innovation in Business Education: Inside or Outside Academia?
18:21 | Breaking Down the Structure of Book: Disciplined Entrepreneurship
22:57 | Case Studies 
24:13 | Know the Customer
27:02 | Beachhead Market: Find your Beachead
28:37 | Concept of a “Full Cycle Use Case”
31:20 | Academia: How Customers Determine Value?
35:00 | Business Models
37:09 | Pricing
39:43 | Is America Still an Entrepreneurial Society?
43:50 | Wrap-Up

Knowledge Capsule

Entrepreneurship as a Mindset, Skill Set, and Way of Operating:

  • Entrepreneurship is not just a mindset; it also involves a skill set and a way of operating.
  • Mindset: It involves a mental approach to problems, discomfort with the status quo, and a willingness to challenge norms.
  • Skill Set: Entrepreneurship requires specific skills that are detailed in the book.
  • Way of Operating: Entrepreneurs operate in a distributed environment, seeking opportunities with resources that are beyond their control.

Entrepreneurship as a Craft, Not a Science:

  • Bill Aulet shares that entrepreneurship cannot be reduced to science due to its unpredictable nature.
  • Entrepreneurship is compared to a craft like pottery, where principles can be taught but mastery comes through practice and experience.

Corporate Entrepreneurship:

  • Bill emphasizes that teaching entrepreneurship within large corporations is challenging due to the constraints of existing structures and incentives.
  • Companies like Google need to balance entrepreneurship with efficiency and effectiveness.
  • Microsoft’s successful turnaround under Satya Nadella exemplifies the potential for corporate entrepreneurship.

Teaching Entrepreneurship in Academic Institutions:

  • Academic institutions like MIT play a vital role in fostering entrepreneurship, despite their inherent inefficiencies.
  • Taking a long-term view is essential for institutionalizing entrepreneurship within corporations and universities.

Disciplined Entrepreneurship Book Structure:

  • The book Disciplined Entrepreneurship offers a comprehensive guide with 24 steps and six themes.
  • It emphasizes rigor and practical application through case studies and exercises.
  • Bill highlights market segmentation as a critical initial step in entrepreneurship, ensuring a focused approach to problem-solving.

Beachhead Market Strategy: 

  • Start with one thing and do it well: Foundational strategy involves focusing on a single narrow market niche and excelling in it before expanding.
  • Expand gradually after nailing the initial offering: Once success is achieved in the initial market, expansion into additional markets becomes viable.
  • Geoffrey Moore’s concept of the beachhead market: Reference to Moore’s concept, emphasizing the importance of securing a secure foothold in a specific market segment before expanding.

Full Cycle Use Case: 

  • Understanding the entire journey of the customer – from recognizing a problem to finding an alternative new option and ultimately paying for it and experiencing the solution – is crucial for business success.
  • Significance of the user experience: customers installing and using the product to realize its benefits and value proposition fully.

Value Learning Cycle: Customers go through phases of learning, comparing, buying, using, and evaluating the value provided by a product or service.

  • Predicted value assessment: Customers assess the anticipated value or benefits of a product or service.
  • Relative value comparison: Comparison of the perceived value against existing alternatives or solutions.
  • Exchange value (purchase decision): Customer decision-making process regarding whether to purchase the product or service.
  • Experience value (product usage): Customers’ evaluation of the product’s effectiveness and utility during usage.
  • Evaluation of expectations met: Reflection on whether the product or service met the customers’ initial expectations and needs.

Customer Value Determination: 

  • Understanding customers’ top priorities, concerns, and fears is essential for identifying triggers that lead to product adoption.
  • Identifying triggers and incentives that prompt customers to take action, such as purchasing a product or service.
  • Ensuring that the product or service addresses customer pain points and aligns with their desired outcomes.

Business Models: 

  • Creating and extracting value from customers through business models involves understanding the value created, identifying target customers, and selecting appropriate revenue-generation methods.
  • Choosing appropriate revenue models that align with the perceived value of the product or service to customers.

Pricing Strategy: 

  • Pricing should be determined after understanding value creation, customer needs, and competitive landscape, followed by iterative testing to find the optimal price point.
  • The iterative process of testing different price points and refining pricing strategies based on customer responses and market conditions.

The Value Creators Podcast Episode #36 Aberrant Capitalism: The Decay and Revival of Customer Capitalism

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Capitalism fosters widespread prosperity. But we must acknowledge a set of emerging hazards associated with corporate management practices, and take proactive measures to mitigate such risks.

The hazards that have transformed capitalism over time are vividly described in Aberrant Capitalism: The Decline and Revival of Customer Capitalism, authored by Hunter Hastings and Steve Denning and published by Cambridge University Press. In this episode of The Value Creators podcast, Hunter shares capitalism’s journey from an external orientation, where customers and their needs were the focus of business activity, to a more internalized orientation, where management processes, methods and measures became the focus. The customer-centric approach of the first great corporations of the nineteenth century reflected the vision and purposes of owner-entrepreneurs using their own capital. But over time, these entrepreneurs left, and a debt and equity finance model took over in the twentieth century. Success became synonymous not with happy and satisfied customers but with stock market performance and shareholder value. This shift represents an undermining of the original animating spirit of capitalism. However, Hunter expresses guarded optimism about the emergence of new business models in the twenty-first century, embodied by companies like Apple and Amazon, which prioritize direct customer engagement and long-term growth over short-term financial gains. 

Despite this optimism, the conversation acknowledges the challenges and risks associated with contemporary capitalism, including dehumanization of labor, data privacy concerns, social media’s impact on mental health, and the rise of monopoly power. Hunter emphasizes the importance of preserving the positive aspects of capitalism while addressing these issues, calling for a reassertion of the values that underpin the system. 

Hunter concludes with a call to action for readers to engage with the ideas presented in the book and work towards a capitalism that prioritizes customer value, innovation, and societal well-being while remaining vigilant against its potential pitfalls.

Resources: 

Connect with Hunter Hastings on LinkedIn.

Check out the book Aberrant Capitalism.

Buy the Book on Amazon: Aberrant Capitalism (Elements in Reinventing Capitalism)

Aberrant Capitalism on the Cambridge University Press

Shownotes:

0:00 | Intro

02:40 | Why Hunter Hastings Wrote Aberrant Capitalism?

5:35 | Journey: Customer Capitalism to a Distorted Managerial and Financialized Capitalism

08:06 | Mass production: What was the Breakthrough?

09:35 | Beginning of Customer Capitalism

11:25 |  Myth: Robber Barons as Exploiters and Unethical Businessmen

14:32 | Value Creating Companies: Nineteenth Century Set Stage for Economic Boom

17:38 | How the Objectives of Entrepreneurship and Management Different

19:07 | Dominance of Management Over Entrepreneurship.

21:39 | Transition: Central Planning to Private Industry Planning

24:21 | Post-War American Companies Success

26:01 | Big Twist: Financialization 

30:08 | Current Corporate Landscape: Is There Any Hope for Future Change?

33:29 | Conclusion: Hopeful OR Fearful about Corporate Capitalism

35:56 | Wrap-Up: Warning

Knowledge Capsule:

Overview of “Aberrant Capitalism”:

  • Hunter Hastings explains the book’s title: the capitalism we know today, characterized by dominant corporations whose behavior is often questioned for its ethics and benefit to society as a whole, is an aberration of the original system.
  • A major concern that results from this aberration is the decline in young people’s confidence in capitalism.
  • Analysis indicates that the real target of young people’s criticism is not capitalism itself, but today’s corporations.

Evolution of Capitalism:

  • Historical journey from “customer capitalism” to “managerial and financialized capitalism.”
  • Examination of capitalism in the eighteenth century focused on companies like Wedgwood and Bentley.
  • Introduction of limited liability corporations and their role in scaling up businesses.

Customer Capitalism in the Nineteenth Century:

  • Hunter shares characteristics of customer capitalism, focusing on innovation, customer orientation, and individual entrepreneurs with examples of successful entrepreneurs and their contributions to improving customer lives.

Misconceptions about Nineteenth-Century Entrepreneurs:

  • Debunking myths of “Robber Barons” as exploiters and unethical businessmen.
  • Hunter shares examples of entrepreneurs like John D. Rockefeller and Henry Crowell who contributed positively to society.
  • Their purpose was to improve lives for as many customers as possible.

Contributions of Nineteenth-Century Capitalism:

  • Discussion on how nineteenth-century capitalism led to economic growth, improved lives, and lowered prices.
  • Transition from entrepreneurship to management and its impact on capitalism.

Shift to Managerial Capitalism:

  • Explanation of the shift from entrepreneurial orientation to management control and managerial efficiency.
  • Introduction of central planning techniques during wartime and their direct migration to corporations after the war.
  • Negative consequences of central planning on customer orientation and market responsiveness.

 Success and Decline of Post-War American Corporations:

  • Hunter shares how the initial success of post-war American corporations was due to central planning and capital investment.
  • Challenges faced by these corporations include competition from Japan and failure to adapt.

Financialization:

  • The rise and eventual dominance of the financial sector and the emphasis on maximizing shareholder value further shifted focus away from customer capitalism towards short-term financial gains, leading to concerns about the impact on long-term value creation and societal well-being.
  • Corporations now work to serve the financial sector not the customer sector.

Hope for Change:

  • Despite the challenges, the discussion points to the emergence of new business models driven by digital companies like Amazon, and Tesla, which have a direct connection to customers and the potential to revive customer capitalism.
  • Hunter Hastings warns about the continued dangers of bureaucratic management, accelerating financialization, and government entanglement.
  • There’s a need to resist forces that distort the true purpose of capitalism, by reasserting the customer value focus that brings societal well-being.