What do entrepreneurial firms do?

Entrepreneurship is an imprecise science, as a subject, it still borrows ideas and methodologies from other sciences like economics, psychology, and mathematics. An activity in progress, entrepreneurship is practised by those who are referred to as such; these people are frequently described as enthusiastic risk-takers. Regarding the environment in which they operate, entrepreneurs may have different experiences, ideas, and viewpoints. Since entrepreneurship is a multifaceted term that primarily depends on the goal of the study, a wide range of academics and researchers have defined the process of entrepreneurship and have produced a wide range of frameworks and definitions. But mid-it, this entrepreneurial intent is not just confined to start-ups or what we say entrepreneurial firms but co-exists in every nature of leadership. What is your entrepreneurial intent as a founder?

Forms of entrepreneurship 

These entrepreneurial firms focus on primarily 4 types of entrepreneurs – small business entrepreneurs, scalable start-up entrepreneurs, large company entrepreneurs, and social entrepreneurs. The production of new goods or services, spotting and seizing chances that spur innovation to produce future goods or services, breaking into untapped markets, or starting entirely new businesses are all considered entrepreneurship. Around the world, academics have developed a variety of theories during this time that attempt to explain and shape the area of entrepreneurship from a research standpoint. These ideas have developed in a volatile, uncertain, complex and ambiguous (VUCA) business environment, moving from the more traditional economic theory of entrepreneurship to the more modern resource-based theory. 

Innovation is a precondition for the entrepreneurial process, which is typically initiated by an environmental, organisational, sociological, or personal event. An idea is then implemented, which may or may not lead to growth.

The socioeconomic environment, which fosters economic growth and serves as a vehicle for the introduction of novel ideas to the market in unpredictable circumstances, influences the process of entrepreneurship. In the area of entrepreneurship, all other firms that are not new or non-dynamic are excluded, whereas new and dynamic businesses are welcomed. 

Enterprise creation- The Entrepreneurial way!

As previously mentioned, the process of entrepreneurship frequently leads to the establishment of entrepreneurial enterprises, which are first established by lone individuals (entrepreneurs) or groups of individuals (entrepreneurial teams). Traditionally, entrepreneurial businesses produce original ideas and are founded to make a profit. Their main goal is to introduce new services and products with improved manufacturing methods. The goal is to take advantage of and manage the opportunities that these enterprising leaders create. The primary indicator of an organisation’s eligibility as an entrepreneurial enterprise is its strategic behaviour. Do you possess this trait?

Five categories, which are grouped under the heading of entrepreneurial firms, reflect typical behaviours. It encompasses the introduction of a new good, improved production techniques, the development of new markets and supply sources, as well as the emergence of a new industry. Watch out where you stand!

These enterprises don’t always have to create new opportunities or implement radical innovations; instead, they can differ from other non-entrepreneurial firms in terms of their markets, resources, and places of origin, making them special in some way. Businesses that regularly try new things and take up the risks involved are called entrepreneurial. Entrepreneurial firms are defined as those that have a strict production emphasis with the ultimate goal of commercialising novel and inventive ideas. We can say, it is innovation in products. Typically, entrepreneurial businesses operate in a variety of distinct and heterogeneous marketplaces. Due to their strong focus on innovation, entrepreneurial businesses are more aware of their product strategy and prospects. Have you noticed this within your organisation? 

By using the financial, structural, and technical resources that are necessary for innovation along with their dynamic capabilities—entrepreneurial enterprises can overcome the risks, instabilities, and threats inherent in the business environment. In contrast to conventional businesses, entrepreneurial organisations work to create and capture value even when they are unable to see the potential outcomes.

Anything to do with VUCA?

As mentioned earlier in my articles, VUCA has its roots in the “Cold War” era when the US Army had to contend with a multilateral global environment that was far from equilibrium and stability. The new normal is thus represented by the abbreviation VUCA. It has evolved into the accepted narrative of the contemporary business world.

In the Harvard Business Review article “What a difference a word makes: Understanding threats to performance in a VUCA world,” the idea of VUCA was first mentioned in scholarly writing. One way to define volatility is as regular, erratic changes that are marked by instability. When there is a lack of knowledge about whether a given circumstance will have major repercussions or not, it can be said to be uncertain. Complexity is defined as a network that is intricately intertwined and makes it difficult to determine cause and effect linkages. A situation that lacks clarity and in which the causal links are unclear due to ignorance is referred to as unambiguous. The books “The VUCA Company”, “The VUCA Learner” and “VUCA in Start-ups have also addressed this idea.

Leaders today must re-evaluate their survival strategy when turbulence emerges from the business environment and geo-political changes creating a similar dynamic and shifting terrain. Disruption with an incredible rate of change, characterises a VUCA environment. With vision, volatility may be resisted and lessened. With the right understanding, uncertainty can be overcome, and company executives need to develop the practice of pausing, looking, and listening past the obstacles. Clarity can respond to complexity when one needs to make sense of the chaos. Agility, or the capacity to bounce back swiftly from setbacks like a spring cushion, can be matched with ambiguity. This can be an antidote as discussed by scholars and thinkers.

The need for crafting Foresight

Classical strategist Igor Ansoff was the first to observe that businesses frequently fail to recognise the changes taking place in the business environment, which leaves them blind to opportunities and risks. However, these changes can be identified and predicted by keeping an eye out for weak signals. Environmental scanning was added to the foundational research on strategic management when it was first started. The study examined how businesses interpret the data they have gathered and how they may use weak signals to inform their decisions. Under the term of forecasting, a competing study stream also arose, to create new knowledge from historical data to predict future developments. This gave birth to crafting foresight. Here is the anchor, we arrived!

In a broader sense, research aimed at figuring out how to perceive or predict the future is referred to as “future mapping”. Have you done so? This viewpoint for businesses was developed under the umbrella of corporate foresight, often known as foresightedness. The adoption of foresight practices is becoming more and more popular. The area of foresight has garnered significant interest due to the dynamic business environment and the increasingly complicated nature of research and development. Therefore, the capacity to comprehend the future can be referred to as foresight, and this helps one obtain a competitive edge.

As an entrepreneurial firm or a visionary leader, have you started thinking in this direction?

Written by Dr. Manoj Joshi.

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