Knowledge Network: Faculty & Research

So you want to work in sports? Six keys for aspiring agents

jamesd — Mon, 24 Sep 2012 23:35:40 +0000

When people ask NFL agent Eric Kaufman ’03 about sports careers, the first thing he does is try to discourage them. “If you can be discouraged, you won’t make it in the industry,” he told MBA students Sept. 20, 2012, at Thunderbird School of Global Management near Phoenix, Arizona. Kaufman’s own journey as an agent included minimum wage jobs and long periods without pay while serving clients such as former NBA star Shaquille O’Neal and Seattle Seahawks coach Pete Carroll. Today Kaufman manages daily operations as president of Premier Sports & Entertainment in Santa Monica, California. “Everybody wants to work in sports,” he said. “I get resumes every single week from former collegiate athletes who played at the highest levels, and even pro athletes who want to get in.” For people who disregard Kaufman’s industry warnings, he offers at least six pieces of career advice.

Get in where you fit in: Getting in the door is the hard thing. “Once you get in, you can navigate your way around,” Kaufman said. “You’ve got to get in where you fit in, and then find your way.”

Do the undesirable jobs: “The real work is done in the trenches,” Kaufman said. “It’s not glamorous.” When people do this, they learn more than their peers and impress influential people.

Create your own luck: “To use a sports analogy, nothing happens while sitting on the sidelines,” Kaufman said. “The harder you work, the luckier you get.”

Shift the paradigm: “If you’re doing things the same way as everybody else, you’re going to get the same results,” Kaufman said. “Nothing great will be achieved.”

If you don’t know it, admit it: “You can’t know everything,” Kaufman said. “The smartest people don’t know everything.” Kaufman said people tend to help when team members admit their limitations.

Make yourself memorable: “Everything in life is sales,” Kaufman said. “You need to have depth and substance behind your presentation, but you have to find a way to stand out.”

Video: How to be an NFL agent (1:55)

Video: Path to Thunderbird (1:22)

When bosses do harm: Breaking the hindrance trap

jamesd — Fri, 24 Aug 2012 16:56:36 +0000

By Kannan Ramaswamy, Ph.D., and Bill Youngdahl, Ph.D.

Bad bosses don’t wake up in the morning and ask themselves: “How can I derail the corporate strategy today?” Our research, based on surveys and interviews with more than 250 managers in 37 countries, shows that most ineffective leaders remain blissfully unaware of the harm they do to their organizations. They chuckle with everyone else when they read “Dilbert” cartoons about the Pointy-Haired Boss.

We credit the disconnect to a “hindrance trap” that lulls emerging leaders into a false sense of accomplishment over a period of years or even decades. At least three forces contribute to this trap.

The first is the socialization process of becoming a leader. As corporate climbers move up the ranks, they are encouraged to think big and leave the details to others. The result is often a disconnect between strategy conception and implementation. Yet some ideas that seem feasible in the C-suite simply don’t work on the ground.

Lack of a “speak up” culture compounds the problem in many organizations. Leaders who discourage honest, complete feedback usually find out too late — or not at all — when they are hindering rather than helping their teams.

The third contributor to the hindrance trap is success, which might seem counterintuitive. People expect to find low-performing bosses at the helm of low-performing organizations. But our research also detected poor leadership within high-performing organizations. In many cases these organizations succeed despite — not because of — their leaders.

Often success comes because self-motivated individuals compensate for their boss’ shortcomings. Other times middle managers build protective bubbles around their teams to protect them from leadership voids higher up the ladder. Luck is another possibility.

During one webinar with a Thunderbird Executive Education client, we opened a poll to gage perceptions of leadership within the high-performing division of a Fortune 100 company. To our surprise, 60 percent of participants said their division was successful despite the hindrance of its leaders. Only 15 percent perceived their leaders as helpful.

The broader study found similar results. Overall, only 35 percent of respondents at high-performing companies said their leaders were doing a good job inspiring their teams to participate in strategic initiatives.

Only 60 percent said their leaders were doing a good job of clarifying strategic intent. That’s more than half — and certainly better than the results we found within low-performing organizations. But it still raises the questions: What are the other 40 percent of leaders doing? How much potential is being lost? How much better could these organizations be?

Unfortunately, low-performing leaders of high-performing organizations might never find the answers because their apparent accomplishments mask their shortcomings. Why would they change their leadership styles when they are receiving bonuses, accolades and promotions for doing a good job?

Leaders locked in the hindrance trap might never detect their predicament and break free without honest reflection, feedback and reform. A good place to start is to consider three behaviors associated with helpful leadership.

1. Clarify

Even highly motivated professionals struggle to hit moving or vague targets. Helpful leaders clarify strategic intent so that it resonates throughout the organization. They show how various initiatives align with the strategy. They give team members a sense of purpose. At the same time, they leave room for individual initiative as circumstances change.

2. Inspire

Ineffective leaders overload their teams with tasks and initiatives without stopping to consider if their people are past capacity. Many of these leaders underestimate the amount of work required to meet their demands because they are too far removed from daily operations. Their response to missed deadlines or targets is to turn up the fear factor. Yet even the most passionate pep talk will not rally the troops when the underlying problem is lack of capacity rather than lack of effort.

Helpful leaders take a different approach to inspiring performance. They start with a clear understanding of “strategic pathways,” meaning the processes and tasks involved with implementing strategy as it cascades through the organization.

These leaders remain mindful of capacity. Then they rally their teams by conveying a sense of purpose and belonging. Along the way, they emphasize the potential joy that will come through accomplishment as the team works together to create value.

3. Enable

Ineffective leaders often view themselves above the people they supervise. Helpful leaders, sometimes called “servant leaders,” invert the pyramid and place themselves at the bottom. Their role then becomes to enable the people above them to accomplish strategic goals. Servant leaders make sure their teams have sufficient time, training and other resources to succeed.

Few people look in the mirror and see a bad boss. It is always easier to critique others than ourselves. Yet if we are willing to look inward and don’t like what we find, the good news is we already have taken the first step to improve.

Kannan Ramaswamy, Ph.D., is the William D. Hacker Chair Professor of Management at Thunderbird School of Global Management near Phoenix, Arizona. Bill Youngdahl, Ph.D., is an Associate Professor of Project and Operations Management at Thunderbird.

Video: When Bosses Do Harm (2:29)

Strategy implementation: An alternative to inspiring through fear

jamesd — Fri, 24 Aug 2012 00:38:42 +0000

By Kannan Ramaswamy, Ph.D., and Bill Youngdahl, Ph.D.

Leaders get paid to think big, which means they sometimes announce ambitious initiatives and then leave the details for others to figure out. These leaders hand down the marching orders and expect targets to be hit. But they are not around at 3 a.m. to see the fallout on the rank and file.

They do not see the impact on people like the project manager we recently met in a Fortune 100 company. She routinely returns home from work around 7 p.m., cooks dinner for her family and puts her daughter to bed. Then she opens her laptop and works several more hours, often until 3 a.m.

We asked her why she does this. Her response serves as a wakeup call for leaders everywhere who distance themselves from strategy implementation. “They keep adding new initiatives,” she told us. “These leaders don’t fully understand what it takes to translate their vision into results.” This project manager is a high-performer who refuses to fail. But she has human limits.

Bosses oblivious to the realities of strategy implementation sometimes see their teams struggling and respond with fiery pep talks. Other times they make threats. In their minds they are inspiring the troops to new heights — something great leaders are supposed to do. But they fail to grasp that when the underlying problem is lack of capacity, no amount of pleading, begging, bribing or threatening will work.

They also ignore well-established research that shows the futility of inspiring through fear. Leaders who pile on tasks and expect results — or else — use fear as their default motivational tool. A better way is to learn the strategic pathways, assess the organization’s capacity, recognize the individual and then convey the potential joy of accomplishment.

1. Know the pathways

To have a clear strategy, leaders also need a clear understanding of what the implementation challenges will be.

When initiatives roll out across the organization, strategic intent translates into a range of projects at the division and team levels. These priorities must compete with corporate initiatives that cut across the various divisions. At the same time people have day jobs that can’t be neglected.

Leaders who want to rally their teams to success must develop an aerial view of the strategic pathways. They must know what’s really happening as their big ideas turn into initiatives that cascade through all levels of the organization.

2. Know the capacity

An aerial view of the strategic pathways allows leaders to develop a more realistic sense of their organization’s capacity. Even highly motivated teams with the right talent and skills need time, tools and other resources to succeed. Not everything can be a priority. Working every night until 3 a.m. cannot be the solution.

3. Know the individual

Part of being an inspiring leader is to focus not on self, but on those doing the actual work. We agree with author Daniel H. Pink, who says people need autonomy, mastery and sense of purpose. Inspiring leaders make people feel good about the contributions they make. People do amazing things when they have a sense of belonging and see themselves as valued contributors to something worthwhile.

4. Convey the joy

Fear draws upon negative emotions and emphasizes the bad things that will happen if targets are missed. Inspiring leaders focus more on the positive. They convey the joy that will come through accomplishment. And they let their project managers sleep at 3 a.m.

Video: Inspiring through fear (2:06)

We have a great strategy — no, really, we do

jamesd — Tue, 21 Aug 2012 17:09:02 +0000

By Kannan Ramaswamy, Ph.D.

The rank and file in many organizations big and small is usually plagued by doubts about the strategy that their company is supposedly pursuing. Often, these are not questions about the specifics of the chosen direction but ones of a much more fundamental nature. They typically wonder whether their organization does indeed have a strategy in the first place. To them, the stutter steps that their firm is making, a quick market entry here, a new product launch there, a set of technology alliances and acquisitions all seem unconnected to any central purpose.

The view from the top is very different however. The CEO huddles with her team and the conversation drifts to how poorly understood the strategy is. Often the senior team that has architected the strategy is at a loss of words trying to fathom the dense depths of the organization where their ideas seldom penetrate. It must be their poor analytical ability, one side says, while the other is of the opinion that the ones in the comfortable offices at the highest points in the building must be breathing rarefied air because they cannot seem to understand reality.

The truth is somewhere in the middle. Here are some reasons why you could think you have a strategy when you actually don’t.

1. Lack of coherence. Your strategy is a set of well-intentioned initiatives, but they might lack coherence. Although each initiative in and of itself might be well thought and well designed, ask whether it directly addresses the competitive position that your firm seeks to occupy. You could easily be growing the best specimens of trees possible, but it does not mean you are making progress toward creating a sustainable forest.

2. Too fuzzy. Your “strategy” may be more of a vision than a strategy. Organizations routinely confuse vision for strategy. Consider BP’s vision of going beyond petroleum by focusing on alternative fuels. In hindsight it ended up sapping the creative energy of the company with very little corporate funding, resulting in a series of cost containment efforts which some blame as the starting point of the company’s downward slide. Strategy is a vision with a plan of action going along with it.

3. Bridge to nowhere. When conceiving strategy, it is useful to focus on the question of future competitive positioning that your company seeks to achieve. If your plans do not address the competitive position directly and defensibly, all you might have is a collection of steps, the ultimate bridge to nowhere. Don’t confuse steps for strategy. Strategy is about competitive position and steps are only meant to take you there. Short-term thinking might lull you into believing that these steps are indeed your strategy, but that could be a mirage and a transient illusion before failure.

4. Lack of clarity. When you wonder why people below you cannot seem to understand your strategy, it could be useful to ask whether the strategy itself has clarity to it. The lack of understanding of your strategy below the C-Suite could be traced to lack of clarity in linking desired actions to a clear set of goals that help articulate your future competitive position. If you cannot express the fundamentals of your intended strategy in a few short sentences, it might be a sure sign of the need to rework and rethink.

5. Lack of alignment. Another challenge is a lack of alignment or buy-in from the ranks. Without good alignment across the organization, your employees are most likely to feel overwhelmed, less motivated to engage, and consequently feel the onset of burnout. If they do not know how their role contributes to the accomplishment of the larger purpose of your strategy, these consequences are hardly surprising.

Kannan Ramaswamy, Ph.D., is the William D. Hacker Chair Professor of Management at Thunderbird School of Global Management near Phoenix, Arizona.

Video: Stumbling Without Strategy (1:54)

Governpreneurship: In search of public sector value creators

jamesd — Sat, 18 Aug 2012 00:34:06 +0000

By Robert D. Hisrich

Traditional entrepreneurs — the kind who risk everything to launch a venture in their parents’ garage — spend much of their time fighting against government. They relate to the Rabbi in “Fiddler on the Roof,” who quips: “May God bless and keep the Tsar … far away from us!”

They know that if government creates anything, it is usually bureaucracy. Rules, regulations, permit procedures and, of course, tax bills all come from City Hall.

Government culture is simply not built for entrepreneurship. Public servants face too much scrutiny from too many constituents to experiment with untested ideas. Short election cycles, combined with slow processes, create further barriers to innovation.

So I was not looking for entrepreneurship when I traveled to Saudi Arabia in January 2009 and met with government official Amr Al-Dabbagh. I was following up on a Thunderbird business development trip the previous year, and my visit with His Excellency was just a 15-minute stop between other appointments.

To my surprise, I soon realized my host was a genuine government entrepreneur who had left a family business to lead the Saudi Arabian General Investment Authority. Our conversation stretched from 15 minutes to nearly 2 hours, and I left with a new perspective on the potential of government to create or foster entrepreneurial activity.

I started exploring other examples of government entrepreneurship, and the project led to Governpreneurship: Establishing a Thriving Entrepreneurial Spirit in Government. The book, scheduled for release on Oct. 17, 2012, is co-authored by my Saudi friend and includes a section on the Saudi Arabian General Investment Authority.

While entrepreneurship has traditionally been viewed as a private sector phenomenon, I now understand it is a universal concept that can be applied not only in small, midsized and large companies, but also in government and social sector organizations.

Here are three examples of “governpreneurship” in action, including a Singapore case submitted by my former student, Katie Nehlsen ’11:

The Lion City

Although Singapore is theoretically a parliamentary republic with a free enterprise economy, the economic role of government is pervasive in the little city-state. Government has set wages and prices, allocated land and resources, regulated capital and controlled labor.

There are few issues in which the government is not involved in one way or another. Singapore is truly unique in its ability to run on democratic values with communistic efficiency.

As the first prime minister of the a newly independent nation, Lee Kuan Yew faced a great deal of uncertainty in 1965. He responded with governpreneurship.
Singapore had few natural resources and land only about the size of Manhattan, so Lee and his government focused on attracting foreign direct investment. To accomplish this, the government took an unconventional approach in bypassing neighboring countries as trading partners in favor of multinational companies from the West.

Lee invested heavily in infrastructure and repositioned Singapore as a “first-world oasis in a third-world region.” He took risks, experienced failure and persevered.

Today Singapore has become a trading powerhouse, growing from a seeker of foreign investment to an investor in lower-wage regions.

Wisdom of Crowds

New York City is collaborating with multiple sectors to create a modern governing structure that elevates performance, enhances discretion and employs analytics.

NYC Simplicity is the newest in a growing line of innovations New York City is undertaking to increase transparency in its governance. The initiative relies on handheld technology as it seeks to remove the regulatory barriers that inhibit government innovation and entrepreneurship by reorganizing government around the needs of residents and businesses.

Former New York City official Stephen Goldsmith says, “Sharing government information publicly and creating forums to capture public feedback is another important way to improve public service delivery.”

Other initiatives include New York’s BigApps competition, the NYC DataMine and a 311 service request map, which plots information from more than 19 million annual 311 calls on a street-level map.

The New York City model personifies Goldsmith’s belief in the “wisdom of crowds.” He explains, “In order to further disrupt the barriers to information sharing, New York City has launched two specific online platforms to take advantage of collaboration opportunities.”

Next in line is “Change by Us,” a public platform that will enable community-based organizations and residents to collaborate on projects designed to make neighborhoods more environmentally sustainable.

Goldsmith hopes the “free flow of information will break open the siloed decision-making that often prevents technically proficient bureaucrats from maximizing their effectiveness because they lack sufficient detail about individual and neighborhood problems.”

Nation, faith, patience

While still crown prince in Saudi Arabia, King Abdulla launched a series of economic reforms that led to the creation of the Saudi Arabian General Investment Authority in 2000. The overarching goal of the quasi-government agency was to transform the Kingdom into a hub for international business.

When the king appointed Amr Al-Dabbagh as chairman and governor of SAGIA in 2004, he provided three words of guidance: Nation, faith and patience. In other words, anything that contributes to the nation and doesn’t conflict with the Muslim faith should be pursued patiently until it is delivered.

The young governor had no previous government experience, so he drew upon his family business background. Within five years the Kingdom’s “ease of doing business” ranking from the World Bank/International Monetary Fund climbed from No. 67 to No. 11 in the world. Foreign direct investment also climbed dramatically.

Al-Dabbagh credits the rapid reform to 10 Golden Rules for Entrepreneurship in the Public Sector:

1. I aim, therefore I am. Link the purpose of existence with a lofty goal.

2. The greatest among you. Recruit great talent. Remember: “Under every great leader is an even greater one.”

3. Execution, execution, execution. Even the best strategies fail without proper execution.

4. Organic tastes better. Organizations that grow organically are more adaptable, more open, more consensual and more loosely controlled.

5. Collaboration cures. Make it clear to the other party how they will benefit from collaboration, and create a common language of collaboration.

6. Customer is king. Develop a service oriented value proposition.

7. The next big thing. Continually and systematically challenge the status quo.

8. Reaching out. Communicate what you are doing well to the internal organization and external world of partners, citizens and investors.

9. Honey, no money. Partner with the private sector, which means speaking the language of the private sector: the language of profit.

10. No risk, no gain. Risk should be allocated to the party best able to manage it.

Robert Hisrich, Ph.D., is the Garvin Professor of Global Entrepreneurship and Director of the Walker Center for Global Entrepreneurship at Thunderbird School of Global Management. He is also president of H&B Associates, a marketing and management consulting firm he founded.

Title: Governpreneurship: Establishing a Thriving Entrepreneurial Spirit in Government
Description: Challenging the traditional view that entrepreneurship is exclusively a private-sector concern, Governpreneurship presents a compelling argument for increased focus on entrepreneurship in public sector organizations. The only book to date to focus specifically on government entrepreneurship, this innovative volume offers expert advice on fostering and managing entrepreneurship in the public sector. Featuring forewords by former US President Bill Clinton and Dr. Mahathir Mohamad, as well as four case studies that demonstrate the effectiveness of government entrepreneurship in action, this fascinating book breaks new ground in a rapidly growing field.
Authors: Robert Hisrich, Ph.D., and Amr Al-Dabbagh
Publisher: Edward Elgar (Oct. 17, 2012)
Hardback: ISBN 978-1781951620, $99
Paperback: ISBN 978-1781952283, $31
Information: Edward Elgar Publishing

From the Foreword: “After more than 20 years in public office and ten years traveling the world for my Foundation, I’ve concluded that the best outcomes occur when a strong, effective private sector works together with an innovative, entrepreneurial government to promote the economy. I know that as you read this book, you’ll gain invaluable insights about the type of government that will succeed in the 21st century. – William Jefferson Clinton, Former U.S. President

Surprised by normalcy: Five Arab Spring realities the media didn’t tell you

jamesd — Fri, 03 Aug 2012 15:59:20 +0000

By Paul Kinsinger

Headlines often paint a grim picture of life in the Middle East. People who view the region from afar see a dangerous place full of angry extremists who can’t get along with themselves or others.

Recent stories of human rights violations in Syria and power struggles in Egypt only strengthen the perception of dangerous fallout from the Arab Spring. Yet the media lens distorts reality by focusing on unusual or extreme events.

At Thunderbird School of Global Management we believe the best way to understand a culture is to experience it firsthand. Westerners who visit the Middle East might be surprised by what they encounter at the corner café — just as Middle East observers coming the other direction might be surprised by the lack of race riots or hate crimes on your street.

In both cases the reality is more mundane than what media headlines suggest. Unless you deliberately enter a war zone or place of civil unrest, the most surprising thing you might find at the corner café is normalcy.

The Arab Spring has produced life-changing moments for many people, yet the daily rhythm of life has not changed all that much. Here are five realities the media often miss:

Reality 1: A lot like you

Religion permeates the Middle East, but most people you would encounter at the corner café are not obsessed with it. They don’t sit around contemplating big questions of politics or spirituality. They are more likely to discuss soccer, favorite television shows, business deals, or what they did on the weekend with their families.

Reality 2: Family values

Throughout most of the region, strong family values prevail. Parents and other relatives take care of their own. They spend time together. The bonds are multigenerational — an outgrowth of the region’s tribal origins.

Reality 3: Social responsibility

Westerners who view Islam with suspicion often overlook an enduring tradition within the religion that requires people of faith to help their neighbors. Acts of charity often occur within extended families, which function as a safety net that sometimes takes the place of government programs. Businesses also give back to their communities.

Reality 4: Diverse landscape

Islam creates many commonalities across the Middle East. So does the Arabic language and centuries of cross-border trade. But important differences also persist among the more than 20 countries within the region. It matters if you dine at a corner café in Morocco, Algeria, Tunisia, Jordan or Egypt. Even within the same country, the contrasts can be stark within rural and urban settings.

Reality 5: Opportunities for women

One key difference across the Middle East involves opportunities for women. Despite a longstanding tradition of male dominance in the region, some governments have made modest strides in recent years to improve conditions for women. Many Jordanian women, for example, own businesses or work in traditionally male-dominated industries such as science and engineering.

The Middle East still has its problems. Violence, corruption and intolerance remain. But, with few exceptions, these issues do not dominate the cultural landscape any more than immigration tension or handgun violence does in the United States.

Paul Kinsinger is a professor of business intelligence at Thunderbird School of Global Management in Glendale and the director of a custom Thunderbird Executive Education program in Saudi Arabia.

Three Toyota lessons for U.S. hospital executives

jamesd — Wed, 01 Aug 2012 16:50:58 +0000

By Karen Brown, Ph.D.

Assembling automobiles requires a different skillset than healing people, but many U.S. hospital executives are traveling to Japan to learn operational excellence from Toyota.

The thought of health care administrators taking notes on an automobile assembly line might sound alarm bells to some. Medicine requires a human touch that does not apply to cars, and no two patients are the same. Yet Toyota has mastered many business behaviors that can be translated to service settings.

Put quality first

For starters, Toyota puts quality first and lets the costs follow. Sometimes this means spending more now to save money later.

Service providers who put quality first in healthcare settings work to eliminate activities that don’t add value to health outcomes, irritate patients, and create extra work for employees.

One example is the way many functionally “siloed” hospitals have traditionally required patients to fill out forms with the same information each time they move from one specialist or department to another. In addition to wasting time for patients and caregivers, hospitals risk receiving different, even conflicting, information each time a new form is completed.

Electronic medical records accessible to all the right people are helping to fix the problem of duplication in many healthcare settings. Hospitals incur heavy investments and experience numerous challenges when building these systems, but the initiatives are paying off in terms of patient outcomes and information accuracy.

Prevent rework

Some hospital administrators miss the point of lean thinking. In their rush to boost efficiency, they sometimes eliminate process steps important to quality, only to incur more work (and considerable cost) later when patients return because of relapses or errors. Many of these missteps can lead to unnecessary patient deaths or serious debilitation that could have been prevented.

In other cases, hospital administrators and their well-meaning staff members engage in “local optimization,” the practice of attempting to improve process steps in isolation without seeing the big picture of how they all fit together. This phenomenon is not unique to healthcare and occurs in nearly every organization in the early stages of its lean journey..

Eliminating post-surgery checkups, for example, might save money in the short term. But nobody wins if the result is a dangerous infection or a second surgery to remove expendable surgical materials left inside a patient. Like Toyota, hospitals must take a more careful approach to cutting fat.

Doctors and nurses cannot simply be asked to see more patients or to do more with less. Too often the result is costly mistakes.

Manage handoffs

Building a vehicle requires input from multiple specialists in different parts of the factory. Everybody has a job to perform, and nobody knows everything.

Toyota has learned that overall success hinges on effective handoffs from one specialist to the next. Expensive mistakes occur when assembly line workers pass along a product without careful communication about what needs to happen next, or when they fail to provide immediate feedback when they see mistakes made in preceding process steps.

Health care similarly relies on a network of specialists. Nobody knows everything. The person who diagnoses a problem is not always the one who recommends the treatment, writes the prescription or performs the surgery.

Hospitals eliminate errors, cut costs and ultimately save lives when they pay special attention to the handoffs from one caregiver to the next.

Karen Brown, Ph.D., is professor of operations management at Thunderbird School of Global Management. She is the co-author of “Managing Projects: A Team-Based Approach,” published by McGraw-Hill.

Battle ready: Five steps to build recession-proof entrepreneurs

jamesd — Mon, 30 Jul 2012 17:00:41 +0000

By Amanda Bullough, Ph.D.

Entrepreneurship has taken a beating in the Great Recession that has lingered since 2008. Funding sources have dried up and projects have been put on hold as market leaders hunker down for the long haul. Yet the world needs innovators ready to create jobs, manage risks and drive growth.

How do entrepreneurs bounce back from uncertainty and decline, and start businesses ventures in challenging times? Our research, based on 500 survey responses in the United States and abroad, reveals two major factors.

The first is entrepreneurial self-efficacy, or belief in one’s ability to do what it takes to be an entrepreneur. The second is resilience, or the ability to persevere after hardship or failure.

Both traits can be learned and practiced, which is good news for would-be entrepreneurs. Here are five steps that individuals can take:

1. Get educated

Self-efficacy in entrepreneurship starts with knowledge of business fundamentals. Solid accounting and finance tools, combined with a foundation in management and leadership skills, can make the difference between dreaming and taking action.

Studying a particular industry also helps. While working as a finance professional in New York, Christine Marchuska took advantage of sewing and fashion classes in the city’s garment district.

When she lost her job in the Great Recession, Marchuska applied her new skills to the launch of an ecofriendly fashion line called c. marchuska. The company combines bamboo fabrics sourced domestically with urban design and modest prices.

Education opportunities range from short seminars, workshops and certificate courses to full-scale degree programs. Each lesson learned opens new doors.

2. Find a mentor

The idea of entrepreneurship appealed to former bank executive Scott Walker, but he did not know how to start when the economy tanked in 1990. Instead of living high with a six-figure salary, Walker found himself unemployed and broke.

He considered his options and decided to find a mentor who could show him how to build a company from the ground up. A prospect came when serial entrepreneur William Conley Jr. announced plans for an Internet infrastructure company. Conley offered no salary, benefits or guarantees, but Walker signed up as the first employee.

The friends worked together during the next few years until 1999, when Walker took a chance on a bill payment company later renamed BillMatrix. Under Walker’s leadership, BillMatrix swelled from four to 300 employees.

Walker sold the company to Fiserv in 2005 for $350 million, and since then has moved on to other ventures. His name now appears on the Walker Center for Global Entrepreneurship at Thunderbird School of Global Management, where my professorship is based.

Would-be entrepreneurs can boost their entrepreneurial self-efficacy and resilience when they model others who have successfully steered businesses through difficult times.

3. Read stories

Loan Ma did not have access to business mentors or even the Internet while growing up on a family farm in rural Vietnam. Instead she searched out entrepreneurship magazines and books, such as “Rich Dad, Poor Dad,” which fueled dreams of starting her own company.

Ma worked her way through college, studied English in her spare time, and found a job on the Ho Chi Minh City Stock Exchange. Eventually she earned a scholarship to Thunderbird, where she met two partners who helped her launched Auxesia Holdings in 2010.

The consulting firm, which helps private investors enter the Vietnam market, has gained early success partly because of the founders’ willingness to seek education and mentorship. (In addition to earning their MBAs from Thunderbird, the partners keep in touch with mentors in New York, London and Zurich.)

The original motivation to start the company, however, came from the magazines and books Ma read in her youth. Stories of overcoming turmoil and adversity can help creative individuals find inspiration, opportunities and solutions.

4. Build a network

Inspiration during challenging times also comes from connections made at professional, school and community events.

One key is to find people with skills different from yours so you have something to offer each other. This is the formula that worked for Ohad Nezer and Chris Nicolaysen, two students who met at Texas A&M during the Great Recession.

Nezer had business skills but no technical background, while Nicolaysen had years of experience in the high-technology industry. Together the partners developed a plan for seatkarma.com, a live entertainment search engine that helps consumers find tickets at affordable prices.

Nezer and Nicolaysen met on campus, which is one benefit of college enrollment. Aspiring entrepreneurs also can join local chamber of commerce groups and industry-related organizations.

Simply meeting new people, swapping stories and having conversations at networking events often sparks novel ideas and new partnerships.

5. Take action

The final step is to practice positive thinking and purposeful entrepreneurial activity. Successful entrepreneurs develop self-efficacy and resilience through real-world application of theory and knowledge.

The men and women mentioned in this article all took action in the midst of economic turmoil. They took risks, stayed optimistic and created jobs during times when other companies were laying off workers and closing their doors.

Each story is different, but the personal characteristics that drive entrepreneurial intentions remain the same. Recession-proof entrepreneurs do what it takes to build self-efficacy and resilience.

Amanda Bullough, Ph.D., is assistant professor of global entrepreneurship and leadership at Thunderbird School of Global Management in Glendale, Arizona. She is academic director of the Goldman Sachs 10,000 Women Entrepreneurship Program in Afghanistan.

Four myths about doing business in India

jamesd — Wed, 25 Jul 2012 01:04:07 +0000

By Kishore Dash

When business leaders worried about globalization aren’t following developments in China, conversations usually turn to India. Collectively the two countries account for about one in three people on the planet. Despite India’s size, common misperceptions persist about the business environment. Here are four myths that could derail any market entry strategy:

One India awaits

People who talk about doing business in India, as if the country were one massive market, already have committed the first blunder. The country is big and the landscape diverse. What works in Mumbai does not always work in Bangalore or Kanpur.

Dietary habits, income levels, consumer exposure and preferences, languages, customs, infrastructure and government policies vary widely. Even Hinduism, a unifying force across India, changes regionally because some gods and goddesses and religious practices and rituals are more popular in some locations than others.

Instead of adopting a “one India” strategy, companies that succeed often target specific regions. Many of India’s 28 states merit the same treatment that companies give to sovereign nations elsewhere.

Uttar Pradesh has a population that almost matches Brazil. Maharashtra is nearly the size of Mexico, and West Bengal is larger than Argentina and most European countries.

Unlike the trend toward centralized power in the United States, Indian states have gained increased autonomy in recent decades. In many ways the Indian market is more like the European Union, which shares a single currency among 27 members.

Global companies understand the differences between Germany and Greece. They also need to pay attention to the differences between Gujarat and West Bengal.

Indians speak English

Indians appreciate at least three holdovers from British rule. One is cricket, another is railways, and the third is English.

The imperial language opens doors for educated Indians across the Western world and within their own country, a subcontinent with 22 languages and dozens of dialects. Every 500 kilometers, the local language changes. This means when Indians from New Delhi do business with their counterparts from Chennai or other domestic markets, conversations occur in English.

The problem is, most Indians don’t really speak English. Those who are educated speak a brand of the language that locals call “Inglish.” Regional accents can be strong, which may cause some problems for British and American visitors.

The rest of India — about 90 percent of the population — speaks little or no Inglish. The deciding factor is usually education, not income level, which creates challenges for Western marketers trying to target specific demographics. Some middle-class families do not speak Inglish, while some working-class families do.

No matter how poor they are, nearly all Indian parents want their children educated in English. This means the percentage of Inglish speakers will increase as the Indian economy emerges, removing barriers for Western companies.

In the meantime, marketers selling anything at the base or even middle of the economic pyramid will need to consider local language strategies.

Engineers abound

India graduates more than 500,000 engineers each year, dwarfing the numbers anywhere else in the world except China. Some Western companies see these statistics and drool.

They assume they can open their technology centers in India and find cheap professionals ready to lead complex projects. Unfortunately, these companies don’t know about India’s talent paradox.

Although India has a handful of top-tier engineering schools, most of the country’s technical institutes produce graduates who are not market ready. The problem is compounded when the best homegrown engineers leave India to work in the United States or Europe.

That leaves technology companies scrambling for Indian talent. They can hire local engineers, but when they do they should plan to provide six months to one year of additional training.

Purchasing power parity

Another deceptive statistic involves the size of India’s middle class, which is expanding rapidly as the country sustains 7 percent to 8 percent GDP growth. Some estimates put the number of middle-class Indians at about 300 million.

Such a massive market might exist for companies selling sandals or watches in India. But as Mercedes-Benz discovered in the 1990s, opportunities are more limited for companies selling high-end products.

This is because middle-class Indians do not have the same purchasing power as their counterparts in the United States or Europe. An annual income of $20,000 might be enough to lift an Indian family into the middle class — a lower threshold than the West. Indian consumers also have different preferences and values.

So how big is the Indian middle class really? It depends on the industry.

The cellphone market tops 900 million, the second largest in the world behind China. The television market is 150 million and growing fast. Indian families love television and will sacrifice to buy a quality home entertainment system before other high-end products because of the status that comes with the purchase.

Meanwhile, the automobile market might be closer to 15 million. Most middle-class commuters rely instead on public transportation or ride scooters or motorcycles.

Brand, status and quality matter in India. But so does price. Middle-class Indians do not part easily with their money, and Western market pricing levels don’t always work. Companies that succeed find ways to adapt.

Kishore Dash, Ph.D., is an associate professor of global studies at Thunderbird School of Global Management in Glendale, Arizona.

Living and leading in a VUCA world

jamesd — Mon, 09 Jul 2012 17:21:59 +0000

By Paul Kinsinger and Karen Walch

The concept of a VUCA world — one that is volatile, uncertain, complex, and ambiguous — was introduced by the U.S. military as the Cold War ended and as the United States looked out over the emergence of a multilateral, rather than a bilateral, global landscape. This meant being prepared to take on increasing challenges from asymmetrical opponents such as nonstate militias and other loosely organized, sometimes almost “virtual” adversaries; to adapt rapidly to highly improvised weapons and tactics by those opponents; to respond quickly, effectively, and efficiently to the explosion of technology-enabled, but frequently contradictory battlefield intelligence; and to address the increasing ambiguity surrounding who was an “enemy combatant” versus who was an “innocent civilian.”

These factors have played out “in spades” in both Iraq and Afghanistan, as well as in attempts to confront other VUCA situations such as the pirate menace off the Somali coast and intervening militarily in Libya. Being engrossed in such a turbulent, frequently unpredictable environment has given rise to new modalities for thinking about leadership in the armed services, especially at unit command levels that have borne the brunt of the need for quick, effective leadership and decision making.

The VUCA concept was brought home to many Americans after 9/11 but really gained currency in the private sector with the onset of the financial crisis in 2008-09, when companies and organizations all over the world suddenly found themselves faced with similar turbulence in their business environments and, subsequently, in their business models. Although the financial crisis has bottomed out and global growth is slowly returning, many organizations are experiencing a “new normal” in their business environments and are realizing that the pre-crash world — and its paradigms — are gone.

As one author has noted, “We are moving from a world of problems, which demand speed, analysis, and elimination of uncertainty to solve, to a world of dilemmas, which demand patience, sense-making, and an engagement of uncertainty.”

Thus, leadership thinkers have been turning to lessons learned from the military to create paradigms for surviving and thriving in a turbulent, “permanent whitewater” world where old styles of managing predictability were falling short. A world where the prospects for highest growth mean placing bigger bets in more fluid, less familiar markets; where new, muscular and sometimes asymmetrical global competitors are emerging from developing economies; where traditional competitors are becoming more cutthroat to survive in low-growth developed markets; where drastic weather changes are having widespread downside ripple effects on a highly integrated global economy; where global financial imbalances continue to bedevil macro-economic planning; where the explosion of “big data” is threatening to overwhelm decision makers; and where technologies are disrupting sectors and even whole industries faster than ever.

It’s not hard to see why leaders everywhere are feeling more keenly than ever the effects of volatility, uncertainty, complexity, and ambiguity in nearly every challenge they face and every major decision they must make.

Leading with VUCA prime

Thus, the search is on for any new leadership anchors to grab onto. So far, those anchors have turned out to be captured in the “antidotes” to VUCA — what’s being called “VUCA prime.” In this leadership paradigm, volatility is mitigated by “vision,” a clear cut master statement of where an organization is headed. When confronted by volatility, leaders need to communicate clearly and make sure their intent is understood.

Uncertainty yields to “understanding,” the deliberate ability to “stop, look, and listen.” In uncertain situations, leaders need to make sure they get fresh perspectives and remain flexible with regard to solutions.

Complexity is checkmated by “clarity,” the deliberate effort to make “sense of the chaos.” In complex situations, leaders need to make sure to collaborate with others and stop seeking permanent solutions. To paraphrase an old adage, don’t let “perfect” become the enemy of “good enough.”

And ambiguity is matched by “agility,” the ability of a leader to communicate across people and organizations instantly and to move quickly in applying solutions. When confronted by ambiguity, leaders need to listen well, think divergently, and set up incremental dividends. This is captured in the concept of “wirearchy,” as opposed to “hierarchy” — where social networks that allow you to engage the insights of many trump the brilliance of any one person.

As the world has become more complex and turbulent, research in human potential and neuroscience at the same time is increasingly revealing practical ways for leaders to develop the mindset and capabilities to lead in it. This research shows that the keys to leading in a VUCA world include possessing the knowledge, mindfulness, and ability to:

1. Create a vision and “make sense of the world.” Sense-making is perhaps more important now than at any time in modern history for many companies, as we are not too many years away from the time when the global economy will actually be truly “global,” encompassing every country and in which competitors will be emanating from everywhere.

2. Understand one’s own and others’ values and intentions. This speaks to having a core ability to know what you want to be and where you want to go at all times, even while being open to multiple ways to get there.

3. Seek clarity regarding yourself and seek sustainable relationships and solutions. Leading in turbulence demands the ability to utilize all facets of the human mind. Even the most impressive cognitive minds will fall short in the VUCA world — it will take equal parts cognitive, social, emotional, spiritual, and physical intelligence to prevail.

4. Practice agility, adaptability and buoyancy. This means the responsive and resilient ability to balance adroitly and right yourself to ride out those turbulent forces that cannot be avoided, and to pivot quickly to seize advantage of those that can be harnessed.

5. Develop and engage social networks. The ability to recognize that the days of the single “great leader” are gone. In the VUCA world, the best leaders are the ones who harness leadership from everyone.

Learn more

Passmore, O’Shea, and Horney, “Leadership Agility: A Business Imperative for a VUCA World, People and Strategy, Volume 33, Issue 4-2010″
Kail, Leading in a VUCA Environment, HBR Blog Network, November 3, 2010 through January 6, 2011.
Understanding the VUCA World with Bob Johansen and David Small, www.youtube.com/watch?v=KJqCPFzq6kU

Paul Kinsinger is a professor of business intelligence at Thunderbird School of Global Management in Phoenix, Arizona, and the director of a custom Thunderbird Executive Education program in Saudi Arabia. Karen Walch, Ph.D., is a professor and consultant at Thunderbird School of Global Management. She has an academic background in international negotiation, cultural competencies and global mindset.