Get Ready, Get Set, Go Entrepreneurial
Great ideas need great planning in order to grow and succeed
Putting Ideas into Action
Entrepreneurs and movie makers have a lot in common. Both groups thrive on creativity and risk, each is responsible to their investors, they must translate creativity into reality and there is no guarantee of success. When it comes to making an award-winning movie, we intuitively understand all this. We accept that making great movies calls for creativity plus expert execution, and that these fundamental features of the artistic process are deeply intertwined. But when it comes to entrepreneurship, people tend to separate the two. They often seek and celebrate great ideas separately from the process of planning, organizing and executing. Our own experience shows that the opposite is true. Truly great ideas require great plans, and vice versa. Entrepreneurial creativity, planning and execution are all necessary elements of an integrated process. Master this process, and your venture can be a block buster.
Avoiding Mistakes
Unfortunately, we have seen too many examples of people who misunderstand this process. The results can be very damaging. Great ideas that go nowhere for lack of adequate planning and great plans that fail because they were built around a flawed idea. For example, one of us knows an entrepreneurial team who invented an online web publishing solution. It incorporated truly novel ideas and was well ahead of the competition. Unfortunately, the team lacked discipline and coordination – they could never plan effectively. As a result, even though the technology was highly innovative and customers loved the product, the business never grew. It survived, but remained small. The lesson we draw: great ideas need great planning in order to grow and succeed.
Others get it right. Consider Starbucks coffee. Their initial idea was relatively straight forward – modeled on the traditional Italian coffee-house. What’s so original about coffee drinking? Not much, as far as the idea goes. But Starbucks successfully adapted the European coffee drinking concept for the United States and then the global market. Starbucks didn’t stop at innovation around the initial idea. They also developed an innovative business model, invested in their employees’ training, and delivered premium coffee, all in order to make coffee-drinking a part of a rich consumer experience. Companies like Starbucks illustrate this important point – exceptional businesses can be created from relatively modest ideas, so long as entrepreneurs understand how to innovate, plan and execute.
At the same time, we don’t mean to say that perfect planning is a key to success. Indeed, obsessing about business plans can lead to paralysis by analysis. We have seen many entrepreneurs dismayed when the numbers in their initial business plan do not turn out well. Merely planning and tweaking the numbers more at such situations won’t get you far. At these times, you need creative ideas, innovative solutions and the ability to adapt. In other words, you need to be creative in adapting your plans. For example, one of us worked with the founder of a biotechnology startup company that was developing innovative cancer therapies using engineered proteins. This involved intricate planning and intensive R&D. But the market for therapeutics proved very difficult, while a new and potentially more promising opportunity arose in the area of diagnostics. To seize this opportunity, the company reconfigured its resources, rapidly adapted its plans and became a successful provider of diagnostic products.
What to Do
We believe that all entrepreneurs should aim to replicate this type of capability, by uniting creative ideas and planning. Key strategies are: (1) encourage and reward an innovative culture, where people feel free to express and explore new ideas, (2) make your planning process a dynamic opportunity to generate new ideas, rather than an annual event for executives, (3) where possible adopt systems and processes that are adaptive and flexible, rather than complex and constraining, and (4) reach out to your current and potential customers – they are a great source of ideas and inspiration. In fact, these strategies apply in any entrepreneurial context, whether they are startups or existing firms. Because great ideas fuel growth and renewal at every stage of business development, and always require effective plans in order to succeed. Therefore, our advice applies equally well for large companies as well. Indeed, when talking the language of competitive strategy, others have described these capabilities as disciplined innovation, organized chaos, or the dynamic capability to explore and exploit. In essence, it means being entrepreneurial by integrating innovative ideas and good planning to exploit opportunities.
Plan to Create, and Plan Creatively
Experience therefore teaches us that without a solid and compelling idea, even the best plans are a waste of effort. And without good planning, even the best ideas may go nowhere. The secret is to combine the two. Not to rely solely on the original idea. Nor to place all your focus on the business plan. But to combine these activities in a process of creative planning that will translates original ideas into tangible value creation. When entrepreneurs do this, the result can be a blockbuster. A great idea enveloped in an effective plan. We acknowledge this is difficult, because each activity requires different capabilities. New ideas depend on creativity and an open mind, while planning calls for structure, analysis and organization. Fortunately, these contrasting activities can be integrated – they come together in the process of innovating and adapting under uncertainty. With these skills in place, entrepreneurs will be ready, set and running.
[This research paper has been reproduced with permission of the authors, professors of IE Business School, Spain http://www.ie.edu/]
