The #Entrenovation Blog – 3

Entrenoveur – A Unique Designation

Let’s go back to the seminal question. What is an entrepreneur? The answer is, it depends. Currently entrepreneurs wear two hats:

  • Under the one hat are, as defined in dictionaries, entrepreneurs who start and manage businesses, assume the financial risk, and expect to be profitable. They employ the practice of entrepreneurship.
  • Wearing the other hat are the people who are striving to identify and develop an innovative idea and to turn the idea into a business-worthy product or service. They employ the skills of the nascent practice of #entrenovation – entrenoveurs.

Entrepreneurs and entrenoveurs use different skill sets and apply those skills at different times in the life-cycle of a company. Thus, as noted above, we have two defined terms – practitioners of entrepreneurship and of entrenovation.

Practitioners need a designation

Reasons that the entrenoveur designation is useful and important:

  • When a company creates a new department, say the Office of Organic Growth, it will want to staff it with people who are skilled at identifying and developing innovative ideas that will grow the company – the entrenoveurs.
  • People who are skilled as entrenoveurs, and employers too, will benefit from that designation because it identifies the entrenoveur’s areas of expertise and it describes key indicators of their credibility and knowledge.
  • Educational institutions could focus on course content specific to the entrepreneurial skill set and separately offer courses focused on entrenovational skills.

Entrenovation Skill Set

  • Innovative idea identification – Within a corporation, entrenoveurs systematically & purposefully search for innovative ideas that when developed and implemented benefit the company. Individuals, or founding groups, generate innovative ideas using entrenoveurial skills to set the stage for a new business venture.
  • Investigation of the potential of the idea – Entrenoveurs are skilled at investigating an idea to determine if it represents a viable product or service that will resonate in an economically viable market.
  • Preparation of a justification statement Based on the investigative findings, the entrenoveur can prepare an unbiased report which includes a recommendation to proceed with the development of the idea into a commercial opportunity. 
  • Development of the idea into a product or service– Entrenoveurs can prepare and execute a development plan utilizing a project manager or project management tools to complete the development and keep the target market in its sights. 
  • Integration of the resulting product or service – Within an organization, the entrenoveurs will work with entrepreneurial staff to launch the new initiative. Entrenoveurs who have developed their own idea will learn the entrepreneurial skills necessary to move the project forward or will engage skilled entrepreneurs to launch the product or service as the core of a new business.

Wrapping up

Imagine for a moment that your family doctor confirms your vision problem and recommends an optometrist to prescribe glasses – your GP did not recommend a brain surgeon. The examination by the optometrist determines your problem is cataracts and refers you to an ophthalmologist – not a podiatrist. Specialization is obviously necessary in medicine. As the horse racing pundits advise, “…there are horses for courses. When it’s raining at the track, bet on the mudder”. Business designations are commonplace as well: lawyers, accountants, entrepreneurs; and now entrenoveurs. Let’s make it so; use your designation now. Be proud, be loud.

  • Entrenoveurs find and turn innovative ideas into products/services.
  • Entrepreneurs use the products/services to grow, or start, a business.

Visit “The Entrenoveur’s Path” here.

Mind your way,

Jon

The #Entrenovation Blog

The Post Mortem Tool

Quick Refresher – This post aside, the primary goal of the blog is to distinguish the practice of entrenovation from entrepreneurship as a practice. These practices employ different skill sets that are applied at different points in the total life cycle of a business.

Long ago the oil & gas industry eliminated similar semantic confusion by recognizing the difference between exploration & production activity and refining & marketing operations.

The new practice, then, is the Practice of Entrenovation. It carries all aspects of #innovation. The practice includes the search for new ideas, the development of the idea, and the arrival the of developed idea at the intersection with entrepreneurship, where it becomes a business. Read more about the need for communication clarification.

Oil & Gas Analogy

By extracting entrenovation, the practice that includes innovation, from entrepreneurship the current confusion can be eliminated. And yes, a person could wear both hats, just not at the same time.

 Identifying innovative ideas

The search for innovative opportunity should not be viewed as a fanciful pastime. A purposeful systematic approach focused on opportunity rather than risk will yield more success than waiting or searching for a “bright idea”. The identified opportunity should be market driven, take advantage of the entrenoveur’s strengths, interests and knowledge, and be justifiable as a development project. To advance the idea, the founder(s) must be satisfied development of the product or service will result in an economically viable solution to a problem, including an identified well researched market

When an enterprise employs innovation in its growth plan (as is advised) available resources will influence the approach utilized. Regardless of the chosen approach, the practice of entrenovation requires the enterprise to formalize a corporate program, commit to and provide appropriate resources to the initiative, and to monitor progress closely. 

Several sources of possible opportunity

First, dismiss the myth that enterprises do not innovate. Obvious examples, among many, that have been successful at innovating include 3M and Apple. Interestingly, many larger companies have not succeeded as innovators when they strayed too far from their core businesses. For example, during the 1980’s, many mature companies unsuccessfully attempted to enter the personal computer business. An example of a company that suffered the innovative success of others, was Rim-Blackberry. Innovate or shrink, and possibly die.

Sources of innovative opportunity can be classified as being: 

  • Internal to an enterprise – Examples include development of new but related products and improvement in production systems. Internal sources may be the least risky to pursue.
  • External to the enterprise – Examples include demographic and social trends or changes.
  • A bright idea –   The hardest source to come by and the riskiest to develop. The general advice is to start small, work hard, get big. Before the recent SpaceX success, how many people knew the venture was started by Elon Musk 15 years ago?

Success rates associated with new ventures will be the subject of a later post, or two.

The Surprise Failure – an internal source

As we all know the “best plans” do not always work out. The post mortem of a failure can however give rise to excellent innovative ideas. The following example is a personal favourite.

During the early 1950’s Ford Motor Company (“Ford”) realized it had a competitive hole in its product line that it could fill with a new vehicle. Following significant research and design efforts, in 1958 Ford launched the Edsel passenger vehicle. Famously, at great cost to Ford, the brand failed and was withdrawn in 1959.

Given the significant effort involved in the development of this new brand, the company and pundits were hard-pressed to identify the reason for the failure. Through research and analysis Ford determined the post-World-War II social upheaval resulted in significant changes in tastes and consumption patterns. Evidently the Edsel was not suited to that new reality.

Undaunted, and armed with its post mortem findings, Ford refocused its efforts and in 1964 addressed the new reality with the introduction of the four-seater quasi sports vehicle named the Mustang. It has been argued the Mustang was the most successful new vehicle launch of all time. Out of failure a great success was realized.

This account of Ford sifting through the ashes for the Phoenix is interesting but it may be a bit stylized. Other descriptions of the Edsel history are not necessarily so kind and do not always support the notion suggesting Ford was so astute. Regardless I believe the story serves the purpose of demonstrating how a great innovative idea may come from a failed, sure-fire business proposition.

To the point…

A current example of possible similar success being realized out of failure is Lyft, the ride sharing company. Before reincarnation as Lyft, in 2007 Zimride was introduced as a long-distance ride service that conglomerated passengers. It was a “dud”. The pivot took place and in 2012 Lyft was born. Very recently (March 2019) Lyft filed an IPO with an inferred corporate value of $20 – $25 billion. Many of the shareholders likely view this as success, but as always is the case, time will tell if it is a business success.

Mind your way

Jon

The #Entrenovation Blog

Introducing Entrenovation: the business practice that is innovation

The practice of #entrenovation and the practice of entrepreneurship require different skill sets. 

  • Entrenovational activity is directed to the identification and utilization of innovative ideas to create new products and services in expectation of disrupting existing business activities and markets.
  • Entrepreneurial activity is directed to starting and managing businesses in expectation of being profitable, while assuming the financial risks.

This blog and the associated website have been created:

  • to definitively distinguish between the business practice that includes innovation and the business practice employing normal business actions, and
  • to introduce and promote the use of the word entrenovation. The word will facilitate clear communication when discussing each practice.

Until relatively recent times the definitions of entrepreneurship, by French economist J. B. Say, Austrian educated Harvard economist J. Schumpeter, and American business consultant P. Drucker, regarded entrepreneurship as innovation. Per the latter two, the purpose of innovation and the introduction of new products/services was the disruption of existing markets. To describe this behaviour, Schumpeter coined the term Creative Destruction and characterized it as the evolutionary engine of the business world.

Today, entrepreneurship is defined in numerous dictionaries and in common usage as: the business practice that is associated with the act of creating a business and managing the business in pursuit of a profit. Not once in definitions I reviewed, or in response to questions asked of individuals, was the word innovation used or mentioned. That realization opened the door to create a word that defined innovative behaviour apart from entrepreneurship; an opportunity to eliminate an element of communication confusion. I walked through that door, mashed entrepreneurship with innovation, and hereby introduce entrenovation, a practice different than the practice of entrepreneurship:

  • Entrenovation is not entrepreneurship, a science, an art, a personality trait, or intuition.
  • Entrenovation is a behaviour, a specific behaviour with a knowledge base built on a foundation of concept and theory. Entrenovation is focused on and is the carrier of innovation.  It purposefully pursues the identification of innovative opportunity, the development of the opportunity, and its introduction to a market with a goal being the disruption of ongoing businesses and markets.

About a century ago Joseph Schumpeter stated that the entrenoveurial practice included five disruptive actions: – the introduction of a new good or a new method of production, opening a new market, creating a new source of supply of raw materials, and reorganizing an industry. To engage in these activities was to utilize Creative Destruction, a term he coined that is commonly expressed in the world of business today.

Innovation in an enterprise

A professional manager of a significant investment fund described determining whether a company is sustainably successful at generating organic growth as the “gold-standard” when making investment decisions. Organic growth can include incremental advances resulting from maintaining and improving existing products and services and radical breakthroughs that disrupt or create markets. Books have been written examining how entrenovation can facilitate sustainable organic growth planning and goals. After all, if a company doesn’t innovate, it is standing still and vulnerable to the opportunistic activity of the competition.

A firm employs the practice of entrepreneurship to start and manage a business using the applicable skill sets, which do not include innovation. In recognition of the need to manage innovation separately, entrenoveurial policies and procedures that are specific to identification and development of innovative opportunity must be specifically introduced by the company. In a larger enterprise, i.e. has sufficient resources, Entrenovation may typically be housed in a separate internal structure, say the Office of Organic Growth. It will be staffed and managed in accordance with the needs of the practice of entrenovation. The policies and procedures will define the intersection where the innovation joins the business and is carried forward by entrepreneurial management. The enterprise utilizes two practices, entrenovation and entrepreneurship, that are synchronized to ensure sustainable growth of the enterprise.

Innovation In a start-up

The start-up is often founded by an entrenoveur, a person(s) with an innovative idea that includes a product/service and a market for it. After justifying the idea as a viable opportunity, a plan to develop the product/service will be created and executed. At some point in the development process, typically as it approaches commercial realization, this entrenoveurial idea will require the skills of entrepreneurship to advance the development process in order to achieve becoming a going concern business.

As in the enterprise the intersection of entrenovation and entrepreneurship must be carefully addressed. It cannot be assumed that a founder is equipped with the necessary entrepreneurial skills necessary to complete the integration of the new product/service into a business. This is not a new issue. Based on my personal experience, the ego and/or the psychopathy of a founder must not be allowed to subsume the need for a skilled entrepreneur who can lead the new venture forward. That said, a founder may be fully capable of making the transition. While business can be fun, it is not a playground. 

The practices of entrenovation and entrepreneurship are distinct and separate. That does not mean that individuals cannot wear two hats and be skilled in both practices. Regardless, it has become increasingly evident that the practice of entrenovation must be included in the strategy of an organization from the outset and be nurtured thereafter.

Read the argument for using entrenovation: http://bit.ly/new-word

The Entrenovation Blog going forward

On at least a weekly schedule, this blog will continue to promote the use of entrenovation and its derivative words in an effort to eliminate the communication confusion that has arisen in the use of the word entrepreneurship. Offerings will include some how to’s, do’s, and don’ts as pertain to entrenovation. For example, methods that can be employed to identify innovative opportunity will be included in coming offerings. Start-ups will also be a subject of future blogs.

Mind your way.

Jon