We live in a world where we increasingly have to take responsibility for our own careers. The ladders that used to be around are getting old and have missing rungs.
For some of us, the ladders weren’t ever there. We had to make our own and clamber up as best we could.
The problem is knowing where to go and what to do next. What do we do if we’ve just entered the workforce? What do we do after twenty years? After forty?
Knowing ourselves better may help answer such questions. In particular, knowing how we’re oriented when it comes to entrepreneurial activity may help us make some tough choices.
Jeff Covin and Dennis Prescott introduced the concept of Entrepreneurial Orientation (EO) in 1985 and came up with a scale to measure it.
The model has been tested over time and is well accepted and essentially measures three aspects of a firm:
- How innovative it is.
- How proactive it is.
- How much of a risk taker is it?
How innovative are you?
Managers at an entrepreneurial company emphasises research and development and its technological lead over competitors. It has many products and changes them quite quickly.
At the opposite end, a company might prefer proven products, bringing out nothing new or making minor changes.
How proactive are you?
Entrepreneurial companies strike first – doing things that their competitors have to respond to. The bring in new products, services, processes, ways of doing things – and have an attacking mindset when it comes to the competition.
Their opposite numbers prefer harmony and carving up the market, responding to change and usually introducing anything new later.
How much risk do you take?
Entrepreneurial companies are willing to take bold, aggressive steps and make decisions that have a high risk but associated with high reward.
Less entrepreneurial companies prefer low risk opportunities, believe in caution and incremental progress and wait to see what happens before committing themselves.
So, does being innovative, acting first and taking risk work?
Entrepreneurial firms do better – but as a whole many fail as well.
Firms that tilt towards the high end of an EO scale are entrepreneurial in the sense that some people on the OCEAN scale are agreeable.
It clearly helps to be innovative when small because people meet us because they see the prospect of something new and shiny- but sometimes large firms only want to work with firms that are low risk.
It’s better to be proactive than not – many a salesperson has been told that they’ll find a million dollars under their shoes if they get going.
Risk is perhaps the tricky one. It’s easy come up with cliches – swing for the fences – go hard or go home.
The entrepreneurs that succeed are probably good at maximising the upside while limiting the downside.
And there are lessons for us as individuals as well – being innovative, proactive and being willing to take risk will get us further this century than looking for ladders to climb.