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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  • Traditional management concepts from the industrial age are thoroughly outdated.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 #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 #34. David Kong’s Entrepreneurial Voyage from Finance to Fine Glassware

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David Kong discusses his transition from Finance to Entrepreneurship and the process of building a supply chain for a product with exclusive features, such as thin, and handcrafted glasses. He explains how he searched for manufacturers, tested samples, and addressed production issues. Despite challenges with finding warehouses and improving packaging, Kong emphasizes the importance of creating value for customers. He shares insights on the emotional value of Glasvin stemware, its impact on the drinking experience, and the evolution of consumer preferences in the wine industry. Additionally, Kong discusses his direct-to-consumer (DTC) model, marketing strategies, and the significance of inbound sales for Glasvin.

Throughout the conversation, Kong underscores the value of efficient operations, strategic partnerships, and customer-centric approaches in building and scaling a successful business like Glasvin.

Resources: 

Database and Analytics company: SOMM.AI
Glasvin (Manufacturing company)
David Kong on LinkedIn

Shownotes:

0:00 | Intro: Origin Story and Entrepreneurial Mindset
02:12 | Origin Story and Entrepreneurial Mindset
05:05 | Idea of Somm.AI Came From Experience
06:19 | How Did Personal Interest Evolve into a Business?
09:18 | Value Proposition for B2B Users: Benefits and Analytics
10:47 | Big Claim: Largest Updated or Updating Database of its Kind
12:49 | Attracting High-Price Point Luxury Wines
13:43 | Global Database
14:28 | Glasvin: Origin Story
19:07 | Building a Supply Chain
23:03 | What’s The Emotional Value of Glasvin?
25:36 | Evolution of Desired Experiences is Fascinating
27:26 | How Did Packaging Evolve
29:25 | Direct-To-Consumer Model
30:44 | B2B Business: Selling to Business Customers
34:45 | Conferences: Getting in Touch with Restaurants
37:53 | Wrap-Up

Knowledge Capsule

Origin of Somm.AI (Wine List Aggregator):

  • Initially conceived as a personal tool to find rare wines.
  • Evolved into a software business after experiencing success with user engagement.
  • Adapted business model from B2C to B2B due to changing market conditions and opportunities.

Value Proposition for B2B Users:

  • Offers benchmarking capabilities for restaurants to assess performance and competition.
  • Provides analytics and insights to identify trends and target opportunities in the market.

Market Dynamics and Competition:

  • David Kong shares that Somm.Ai targets on-premise wine data, serving a niche yet valuable segment.
  • Faces competition from established players like Nielsen but focuses on unique data sets and pricing strategies.
  • Recognizes challenges in entering the market due to technical complexities and limited entrepreneurial interest.

Global Reach and Expansion:

  • Capable of expanding database globally based on client demand.
  • Acknowledges regional variations in wine list availability and penetration rates.

Transition to Glasvin (Glassware Business):

  • Explored entrepreneurship opportunities beyond software due to the time-to-revenue constraints.
  • David shares how he identified the market gap in affordable, high-quality wine glasses and opted to start his own brand, leveraging importing experience and existing demand.

Challenges and Opportunities in E-commerce:

  • David Kong recognized e-commerce as a viable business model with the potential for success.
  • Found opportunities to offer quality products at competitive prices.
  • Successfully launched Glasvin as an e-commerce venture in 2020, capitalizing on market demand and personal interest in wine accessories.

Product Development and Supply Chain:

  • David reached out to multiple manufacturers via email to find one willing to produce the desired glasses.
  • The process involved requesting samples, evaluating quality, and addressing production issues.
  • David shares the initial challenges included finding manufacturers capable of meeting specific criteria, such as glass thickness and weight.

Value Creation and Marketing:

  • David emphasizes creating value for customers through product quality and pricing.
  • Packaging and branding were initially less polished but did not hinder sales due to the product’s perceived value.
  • David Kong’s primary focus was on enhancing the drinking experience, making wine taste better with thinner glasses.

Direct-to-Consumer (DTC) Model:

  • Glasvin sells primarily through its own website powered by Shopify.
  • The decision was made not to sell on Amazon due to potential mismatches with the target customer base.
  • Inbound sales, driven by word-of-mouth referrals and brand reputation, are a significant aspect of Glasvinl’s sales strategy.

Restaurant Sales:

  • Glasvinl targets restaurants as a marketing channel, gaining exposure and credibility through partnerships with prestigious events like La Paulée.
  • The company provides glasses for rental at events, leveraging its association with high-profile wineries and events to expand its reach.

Evolution of Business Opportunities:

  • Participation in La Paulée led to the development of a rental program for the glasses, diversifying revenue streams beyond direct sales.
  • David identifies market gaps and opportunities, such as the demand for alternatives to Zalto glasses, and offers tailored solutions to meet customer needs.

Future Growth:

  • Despite current success, David emphasizes the importance of continuous adaptation and improvement to drive future growth.
  • The pursuit of growth involves remaining competitive, evolving the business model, and meeting evolving customer demands.

The Value Creators Podcast Episode #32. Jeff Amerine on Entrepreneurial Ecosystems

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Jeff Amerine and Hunter Hastings, discuss the detailed process of building startup ecosystems and fostering entrepreneurship. Jeff Amerine, emphasizes the role of entrepreneurs in spearheading ecosystem development, suggesting that successful ecosystems are entrepreneur-led initiatives. 

Leveraging available tools and resources, including AI and cloud computing services, has democratized entrepreneurship, making it more accessible and efficient than ever before. Jeff highlights the significance of engaging universities in the ecosystem, tapping into the talent pool of students, and fostering an entrepreneurial mindset from an early stage.

Despite the challenges of scalability and trust-building, Jeff discusses the expansion of his organization’s footprint beyond Arkansas, aiming to bridge international venture ecosystems. The long-term commitment required for ecosystem development, emphasizes the transformative potential of entrepreneurship in driving economic growth and societal change.

Resources: 

Startup Junkies Consulting Website: startupjunkie.org

Startup Junkies Book: creatingstartupjunkies.com

Show Notes:

0:00 | Intro
02:31 | How Jeff Defines Enterpreneurship?
03:55 | Entrepreneurial Ecosystem: 4 Pillars
06:53 | Entrepreneurship Not Only a Mindset But Also a Talent 
08:34 | Cultural Perspective: Assessing Startup Ecosystem Readiness
13:40 | Capital is Hard to Break into for Startup Ecosystems: Capital Pillar
15:58 | Early Capitalism: Self-Funded Growth
16:32 | Community Engagement: Local Bank Support for Startups
18:58 | Startup Junkies Could Be Economic Developers
20:40 | Access to AI Tools Simplifies Startup Initiation
22:12 | Universities Play a Vital Role in Startup Ecosystems
24:33 | Operational Side of Entrepreneurial Support Organization
27:18 | Funding Process and Events
30:19 | Networking Defined 
32:45 | Time: Sow Seeds, Be Patient
36:05 | Systemize OR Stay Entrepreneurial?
38:00 | Wrap Up

Knowledge Capsule

Entrepreneurship as a Mindset:

Jeff Amerine shares his views that entrepreneurship is a mindset that prioritizes problem-solving and a propensity to challenge the status quo. It transcends stereotypes and focuses on individuals who see challenges as opportunities and are driven to innovate and create change.

Pillars of an Ecosystem:

  • Talent: Cultivating entrepreneurial talent through education and training.
  • Capital: Ensuring access to funding at all stages of venture development.
  • Culture: Fostering an entrepreneurial culture through events and engagement.
  • Community Engagement: Involving various stakeholders for support and collaboration.

Catalysts for Cultural Change:

  • Investors and leaders play a pivotal role in driving cultural change by investing in and supporting aspiring entrepreneurs. Their belief in the potential of entrepreneurial talent and willingness to take risks contribute to creating an environment conducive to innovation and growth.
  • Investing in visionary entrepreneurs involves providing financial resources, mentorship, and guidance to promising ventures. This approach fosters a culture of entrepreneurship by empowering individuals to pursue their ideas and realize their potential.

Capital Accessibility for Startups:

  • Challenges in Accessing Capital:

Many small or local entrepreneurial ecosystems struggle to access capital.

Traditional banking options like local branches of larger banks often need more support.

  • Diverse Funding Sources:

Startups rely on a variety of sources such as angel investors, friends and family, and government grants.

Non-dilutive funding options like Small Business Innovation Research (SBIR) awards offer alternatives to traditional venture capital.

 Early Capitalism for Business Growth:

  • Jeff emphasizes that we need to shift our thinking and build businesses through customer revenue rather than solely relying on venture capital. 
  • Jeff encourages exploring professional services and securing revenue traction before pursuing large-scale platform development.

Community Engagement and Networking:

  • Community events like startup crawls and networking gatherings facilitate connections and collaborations.
  • Events provide platforms for creative collisions and idea exchange among entrepreneurs and stakeholders.
  • Jeff advises that we need to engage large corporations involving targeted efforts to demonstrate the benefits of engagement, such as mentoring and knowledge sharing.

Impact of Technology and Universities:

  • Technological Advancements:

Democratization of tools and resources, such as AI and cloud computing, lowers barriers to entry for startups.

Access to flexible teams and efficient AI-driven processes enhances productivity and innovation.

  • University Engagement:

Universities serve as vital sources of talent, education, and entrepreneurial support.

Entrepreneurial programs, accelerators, and partnerships with universities foster innovation and provide resources for aspiring entrepreneurs.

The Value Creators Podcast Episode #31. Christian Sandstrom: How Entrepreneurial Initiatives Beat Government-Backed Missions

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In this episode of the Value Creators Podcast, dive deep into the classic battle between market-driven innovation and centrally planned industrial policy with our esteemed guest, Christian Sandstrom, a leading voice for individualism and free-market solutions and author and professor at Jönköping International Business School and the Ratio Institute in Sweden.

In this conversation, we unpack the government’s grand “moonshots” and “missions” which claim to solve societal challenges but always miss the mark due to bureaucratic inefficiency and a central planning approach that negates the potential of market dynamics.

Learn why centralized missions such as the cancer moonshot or the war on homelessness can become drains on public funds while failing to deliver meaningful progress, and the importance of fostering an entrepreneurial society where markets create value and select the best solutions organically, rather than imposing ‘one-size-fits-all’ government-led directives.

This episode is a treasure trove for anyone interested in the interplay between innovation, the economy, policy, and technological advancement!

Resources:

Christian Sandstrom’s Books:
Moonshots and the New Industrial Policy
Questioning the Entrepreneurial State

Episodes Mentioned:
Christian Sandström: Why Governments Can’t Act Entrepreneurially

Show notes:

0:00 | Intro
03:09 | Mission Economy: MOIP
05:16 | Attraction Perspective: Is the Mission Economy Same for all Governments?
06:33 | Book: Behavior of Economics
08:26 | Three Broad Headings: Sequence
10:50 | Public Intellectuals: These Are Not Serious Economists, These Are Celebrities
13:48 | Empirical Evidence Defined
17:04 | Apollo Mission: Examples
19:20 | Example: Home Building Challenge
21:07 | Alternative: Aim for Entrepreneurial Society 
27:26 | Challenge: Separating the Entrepreneurial Component from the Bureaucratic Government Entangle Component 
29:46 | Technology Can Decentralize Economic Activities
31:33 | Moral Beliefs and Imperatives 
34:04 | Entrepreneur Ecosystem
36:13 | Books Campaigns: Spreading Word Beyond Books
39:40 | Wrap up: Christian is Optimist OR Not?

Knowledge Capsule:

  1. Entrepreneurial Society vs. Mission Economy:
    • Societal goals are achieved when Individuals take personal responsibility,, translating abstract ideas into actionable steps.
    • Decentralized, bottom-up approaches are always superior to top-down, government-driven solutions.
    • Professor Sandstrom advocates for minimizing government restrictions and regulations to allow markets to evolve and find solutions organically.
  2. Challenges with Mission-Oriented Policies:
    • Complex problems (sometimes called “wicked problems”) can’t be solved by government-led missions.
    • They require decentralized, collaborative solutions rather than centralized control.
    • There is always the problem of government officials pursuing self-interest or being influenced by interest groups, leading to inefficient and muddled outcomes.
    • Mission-oriented policies can distort competition, neglect opportunity costs, and fail to address root causes of issues.
  3. Empirical Evidence Against Mission-Oriented Policies:
    • Historical case studies and literature review show limited success and unintended consequences of mission-oriented policies.
    • Examples like the Apollo program and the atomic bomb highlight engineering successes rather than entrepreneurial ones.
    • Such policies often fail to address systemic issues effectively, such as homelessness or economic revitalization.
  4. Role of Public Intellectuals and Behavioral Economics:
    • Public intellectuals often simplify complex economic concepts, leading to oversimplified policy prescriptions.
    • Behavioral economics can criticize markets but sometimes overlooks biases and inefficiencies in government decision-making.
    • There is a need for a more nuanced understanding of economic principles and policy implications.
  5. Alternative: Entrepreneurial Ecosystem and Technological Advancements:
    • Technological advancements enable smaller-scale entrepreneurship and decentralized economic activities.
    • Focus on building collaborative, complementary networks across firms and technologies for innovation.
    • Markets are seen as collaborative ecosystems rather than purely competitive arenas, emphasizing the role of cooperation and innovation in achieving great outcomes.
  6. Moral Beliefs and Imperatives in Policy Making:
    • Public perception often drives policy decisions, creating what are seen as moral imperatives for government action.
    • Balancing these supposed moral imperatives with practical, market-driven solutions is crucial for effective policy making.
    • Need to consider unintended consequences and trade-offs of policies driven by moral beliefs.
  7. Optimism for the Future:
    • Despite challenges, there is optimism that technology and entrepreneurial ecosystems can drive positive change.
    • Global interconnectedness and creativity offer opportunities for entrepreneurial solutions to societal challenges.
    • The potential for decentralized, collaborative problem-solving gives hope for addressing complex societal issues more effectively.

The Value Creators Podcast Episode #29. Raushan Gross on Entrepreneurial Value Creation in the AI Economy

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Professor Raushan Gross, who teaches Business Management And Leadership at Pfeiffer University, has focused his most recent research on the impact and influence of A.I. on entrepreneurship. He published some of this research in a series of articles at mises.org. One of them links A.I. to The Wealth Of Nations, and, of course, the wealth of nations is driven by entrepreneurship. From this vantage point, Professor Gross identifies the multifaceted impact of AI on society, economics, and business strategies, advocating for a paradigm shift in management thinking to adapt to technological advancements.

Resources:

The Fate or Wealth of Nations: AI, Robotics and Automation

Will AI Learn to Become a Better Entrepreneur than You?

Prices, Food, Employment: AI and Robotics Are for Regular Folks, Not Just the Elite

Would You Hire an AI-powered McRobot or a Human Employee?

Artificial Intelligence Enhances Consumer Sovereignty

Artificial Intelligence Can Serve Entrepreneurs and Markets

The Fear of Mass Unemployment Due to Artificial Intelligence and Robotics Is Unfounded

Show Notes:

0:00 | Intro
2:27 | Exploring AI’s Impact on Entrepreneurship
7:18 | Can AI Surpass Human Entrepreneurship?
8:48 | Exploring AI as a Service and AI Stacking
12:08 | AI as a Team Member in Entrepreneurship
15:10 | Small and Medium Businesses Can Embrace AI for Strategic Advantage
17:13 | Transition to Autonomous Decision-Making with AI
21:13 | Concerns on AI Centralization and Oligopoly
25:15 | Adam Smith: Global Scale AI is the Wealth of Nations
26:40 | Elon Musk on Value Creation: the Value Meter
29:14 | Does AI Redefine Management by Value Metrics?
32:14 | Wrap-Up: Rethinking Management in the Digital Age

Knowledge capsule

AI changes how individuals and entrepreneurial firms interact with the market.

  • We can’t be sure of the form the interaction will take.
  • But we know that we are using AI in every market transaction
  • While some individuals have doomsday visions of AI, entrepreneurs ask, “How can I use this to improve my business and how I serve customers?”

Human ingenuity will always be a critical and irreplaceable part of entrepreneurship.

  • AI is an active tool for entrepreneurs.
  • It will be a competitive factor in servingand delighting customers.
  • It’s a service to entrepreneurs to help them succeed.

Entrepreneurs can assemble and combine bundles or stacks of AI services into complete business models.

  • Austrian economics explains how entrepreneurial business consists of combining and recombining value-facilitating assets.
  • This is precisely how entrepreneurs utilize AI.
  • There’s no need to own the assets, just to control them and their value direction, and this is the business service that today’s AI tools offer.

AI can be a team member in value creation teams recruited by entrepreneurs.

  • Most productive work is done in teams.
  • AI can be a team member, bringing new knowledge, querying and challenging existing knowledge, and helping to advance knowledge-building at speed.
  • AI can also automate a lot of implementation processes, freeing entrepreneurs to focus on creativity and innovation.

AI will also play a role in technological deflation.

  • While governmental monetary and fiscal policy creates inflation, the role of the entrepreneur and technology is deflationary: making production faster and lower cost with improved quality.
  • AI will contribute by lowering the costs of doing business.
  • Entrepreneurs will be more empowered and the general level of well-being will rise.

Any risks lie in the danger of centralization of AI.

  • Will governments centralize AI under their singular control?
  • WIll the massive investments required in building AI server farms and databases and LLM’s result in a few corporations controlling AI for the whole economy?
  • It’s more likely that entrepreneurs will be able to build their own models using base LLM as a platform.

One of Elon Musk’s innovations points to AI as a “value meter”.

  • Algorithmic management at Tesla includes the ability of AI to assess the real time value creation product resulting from a team’s work with the resources at its disposal.
  • The AI can simultaneously scan all the other value creation opportunities available at the same time and reallocate teams and resources to higher value uses.
  • In this way, AI acts as a “value meter” for the productive activities of a work force and factory.

Global Competition in AI:

  • There will be a global race for AI dominance among nations.
  • Those nations that are most  energetic and innovative will shape the future landscape of AI development.