Entrepreneurs and Their VUCA Readiness
This article is an in-depth study and an attempt to explore entrepreneurial capabilities to survive and grow in VUCA business world of start-up
Startups have their origin in the mindset of the entrepreneur, that of an explorer. The explorer of the 19th century who went to explore the unknown interior regions of Africa was driven by the curiosity of “what lies ahead”. Many of them died through fighting with hostile tribes, diseases, wild animals and other causes. But the knowledge they sent allowed other people to enter Africa with more certain knowledge. Our modern-day startup entrepreneur is also an explorer. He may not die in the process but chances of failure are very high.
Entrepreneurs are helped by entrepreneurs and this has been possible due to venture funding, which started in the Los Angeles area of the United States, now known as Silicon Valley. The widely accepted terminology “venture capital” (VC) is characteristically related with high-risk, high-growth and potential start-ups. VCs generally spread their funds over a range of startups, knowing fully well that a majority of these will fail but the odd successful entrepreneur will make their fortune. Some early examples of companies which rose on the back of VC include Xerox, Intel etc. etc.
With VC or without VC, every entrepreneur in start-up faces volatile, uncertain, complex & ambiguity (VUCA) conditions. To scale-up the entrepreneurial ventures, the entrepreneurs must learn to mitigate VUCA challenges and be competitive in the Industry.
The Big Challenge:
With the rapid change in the business environment, available resources, opportunities to embark upon, entrepreneurship has emerged as the hottest field to try one's luck in creating a business enterprise. While the entrepreneur is the individual possessing traits that are innate towards business creation, entrepreneurship is the process that enables in setting up the enterprise. At the same time history says, that these entrepreneurial firms, to some that were successful, others succumbed to their weaknesses by not translating the signals that were weak, but imperative for their existence.
It has been observed that the existing knowledge about the entrepreneurship process and its potential to respond to VUCA situations in entrepreneurial ventures is inadequate, especially in the Indian context. Some of these Indian start-ups in their entrepreneurship processes made terrible mistakes leading to disastrous outcomes. Failure is in itself not a disaster, but a failure to learn from failures certainly is! Were some of the entrepreneurial styles faulty? Failure shall continue if these entrepreneurs fail to learn from the past? Is it complacency or overconfidence? Why hubris in a VUCA world?
Thus, the research context explored in this paper revolves around the process of entrepreneurship and competencies of entrepreneurs needed to counter and navigate in VUCA perspective in entrepreneurial ventures. The business world is continuously confronting VUCA and for entrepreneurial ventures, it is inevitable. In business, it is pertinent to propose the premise that the most suited combination to give an effective response to VUCA business world, would be an ‘entrepreneur-manager’ and not ‘manager-entrepreneur’. The entrepreneur need to assess the readiness of their start-ups in order to survive and grow in a VUCA business world.
A VUCA business world is highly turbulent and unpredictable, but with healthy entrepreneurship process and the right mix of competencies of entrepreneurs, the incumbents are expected to be VUCA ready.
Do we think that Indian start-ups are prepared for the VUCA world? This question has been studied through qualitative studies on around 70 Indian start-ups both nascent and at the developing stage. We used published data and triangulated to neutralise bias. We also carried an extensive research work on select Indian start-ups and wrote few case studies, the findings of which inspired the theme.
Snap deal pursued a series of diversification even before it could consolidate the previous ones. Stayzilla failed to analyse the prevalent market. Did they see the differences between “manager- entrepreneur” vs. “entrepreneur-manager” in a VUCA perspective?
An important question is about identifying healthy entrepreneurship process and in developing the right mix of competencies in “entrepreneur-manager”. The responsibility of operating any business is passed over like a baton from one generation to other and to ensure its long term growth and sustainability, especially in VUCA situations, in future. The strategy for effective succession planning and Talent Management System need to be modified. The competencies of entrepreneur-manager of being successful in future VUCA world need to be redefined. Here, coaching for developing entrepreneurship may be of great help. After identifying suitable talent with the right mix of competencies, the entrepreneur-manager, must respond like how far has deep thinking been done? Therefore,
Are you open to change? (Paytm, Adpushup, iYogi…)
What is your willingness to experiment with ideas? (Freecharge, Vizury, Druva…)
Are you adapting a style to the requirement of a situation? (Jabong.com, Adnear, Car Trade...)
Do you have a sense of personal mission and passion? (Book my show, Practo, Culture Alley...)
Did you try reflecting and acknowledging mistakes? (Myntra, Micromax, Quikr…)
Are you willing to listen to what others say with a sense of inquisitiveness and humility? (Must see India, Policy bazaar, Knowlarity…)
With what degree are you open to learning? (Urban ladder, Cleartrip, Komli media...)
Are you focusing on the future (feed-forward) rather than past (feedback)? (Ixigo, Common floor, Zomato...)
Entrepreneur-manager may be developed in an environment where the eco-system is conducive for development of this new type of entrepreneurs. The paper also focuses on required skill-set for entrepreneur-manager to respond to a VUCA business world. In this context, the following five skills will help entrepreneur-manager stand out in the crowd and survive in a VUCA world:
Are you a change agent?
Inmobi brought in the world’s most powerful mobile advertising platform. They adopted quickly, but have you?
Do you excel in a matrix environment?
Flipkart as a change agent working in the matrix environment changed the industry. The orchestration from product development to supply chain to sales and marketing, all tied to the underlying technology connecting to the customer, is vital to business success. These are true for all the functional roles in managing any business. Are you ready in the technology forefront?
Have you had any epic fail experiences?
Micromax recovered from initial offerings, honestly admitted deviations and recovery in their entrepreneurial journey. How many of us are ready to fail and learn fast
Are you glocal?
Yatra’s one step mission is to create happy travellers, with a bond of ‘It is a combination that requires empathy for people from other backgrounds, the ability to listen and an understanding that business is driven from a global perspective but operationally is executed at a local level.’ What is your readiness in this direction?
Are you a Team Oriented Entrepreneur?
India’s largest online food and grocery store, Big Basket inspires many with their team strength. The way to win is through other people. The entrepreneur-manager cannot be successful without the support of his colleagues and team. Have you enquired yourself: are you the kind of person others will follow? Do you inspire others to deliver their best? Are you confident enough to surround yourself with people who are different and more talented than yourself?
A VUCA business world of start-ups is unpredictable, but a robust model to respond will definitely help entrepreneurs. The authors are proposing, “Centre for VUCA Studies (CVS) VUCA Response Model” for “Entrepreneur-Manager”.
The above model is self- explanatory and does not need elaboration. The entrepreneurs must have spirit and courage to follow the above model.
In a volatile, uncertain, complex and ambiguous (VUCA) business world, the carefully laid plans often don’t survive, as soft trends overpower hard trends. There is an urgent need to decode weak signals and translate them into powerful future challenges that can extinct an enterprise. Planning and execution for manager-entrepreneur do not become irrelevant, but do become as baseline requirements. But, certainly, they are not relevant for entrepreneur-manager in a VUCA business world. There are other entrepreneur-manager capabilities, which are key: like an ability to sense, speed, precision, the ability to respond effectively, agility, adaptability and the ability to learn rapidly from experience and responding to with dynamic capabilities as a VUCA Learner.
Start-ups have suffered due to their fast and unprecedented expansion into newer industries. Few underwent bankrupt, others are struggling to survive. The most significant implication of the findings are those failures, which could have been avoided. Entrepreneurs could have exercised restraint towards expansion and practising the right convergence of “manager-entrepreneur” to “entrepreneur-manager”. Most entrepreneurs exhibit to a syndrome of ‘moving to mean’. They failed to check the reality of the world. The world is not going to change towards a stable system that is predictable. Thus, findings of this paper will help to explore a direction for entrepreneurs and their enterprise to maintain growth, while managing dynamic risks.
The findings bring out the necessity of entrepreneurs and their enterprise for spending time on thinking, reflecting and learning and on how to anticipate and execute. They need to stay humble, focused, assertive and nimble. They shall make choices, fast, based on intuitive thinking, while being slow based on rationality. It is the combination start-ups must think fast and slow in a VUCA world. Therefore, entrepreneurs must ask a question to themselves: Am I VUCA ready?
Dr. Manoj Joshi is a Ph.D., Fellow Institution of Engineers, Professor of Strategy & Entrepreneurship, Director, Centre for VUCA Studies, Amity University, with 27+ years of experience in industry & research. He has authored 40+ articles, co-authored two books “The VUCA Company”, “The VUCA Learner” and is also on the Editorial Board of several international refereed Journals.