We Need Entrepreneurial Leaders Now More Than Ever There's never been a moment in which people were more open to rethinking old ways of doing things.
Opinions expressed by Entrepreneur contributors are their own.
Two years ago, David Zamarin wowed the judges on Shark Tank with a water and stain repellent spray, walking away with $200,000 in investments for his startup Detrapel. When the coronavirus struck, Zamarin applied that same entrepreneurial mindset to a new need, pivoting his company in a matter of weeks to make hand sanitizer and cleaning products. "We're in the business of protection," says Detrapel's website, linking their existing business and the new one into which they've leapt.
Zamarin isn't the only entrepreneurial leader who has responded nimbly and rapidly to the unprecedented constraints and opportunities created by the coronavirus pandemic. Vacuum company Dyson invented a new type of ventilator, while Bauer switching from producing hockey gear to making personal protective equipment. Numerous textile companies, such as bag startup Rafi Nova, pivoted to making masks for consumers.
In a time of crisis and uncertainty, the ability for each of us to think and operate like an entrepreneur is more essential than ever. Businesses are facing turmoil on multiple fronts: The pandemic is reshaping markets, people are working and shopping from home, and concerns about racial justice and financial crisis are boiling over. Entrepreneurial leaders succeed by adeptly navigating this kind of unpredictability and productively channeling disruption into opportunity.
As the Chair of the Entrepreneurship Department at Babson College, an instructor at Babson Executive Education, and a mentor to numerous young business leaders like David Zamarin (himself a recent Babson graduate), I often feel like a broken record touting the importance of entrepreneurial leadership. The ability to think and lead like an entrepreneur has long been a unique differentiator for leaders of forward-looking firms. But it is no longer optional, not for companies looking to weather the storms of 2020 and the uncertainty that will come in its wake. Simply stated: Entrepreneurial leadership was once a competitive advantage but is now a necessary capability.
Rethinking old routes and recipes
To understand how essential entrepreneurial leadership has become, look at your local restaurant scene. As their normal business models have been decimated, restaurants have become hotbeds of creative reinvention. Neighborhood spots are leaping into delivery and online ordering and selling groceries in addition to prepared food. High-end establishments are revamping their menus with more affordable comfort food, meal kits, and family size portions better suited for dining at home. Restaurants that have not been able to find a place in the new dining landscape are suffering. A recent report from the Independent Restaurant Coalition projected that as many 85 percent of independent restaurants may close for good by the end of the year.
We see a similar premium for innovation at the other end of the spectrum, in the high-cost, high-barrier-to-entry airline industry. While major carriers are bleeding cash and laying off workers, some smaller budget airlines sense opportunity. They are expanding routes and looking to buy planes offloaded by larger carriers. Being nimble allows them to respond to changing consumer patterns, such as the return of pent-up demand for leisure travel while business travel remains at a standstill.
American Airlines CEO Doug Parker has tried to thread the line between these two extremes. Despite uncertainty about the future, he's taking bold action and is bullish about getting more planes in the air. In mid-July, American was offering twice as many seats as United and nearly 50 percent more than Delta, according to industry analysts OAG. It is generally easier for airlines to cut flights than add them, so American is experimenting with the limits of demand to learn and prepare for the new normal. Parker has noted in recent interviews that if this strategy doesn't work, American will pull back and adjust, a level of flexibility and openness that is key to entrepreneurial leadership.
An entrepreneurial mindset is what distinguishes leaders like Parker and Zamarin. They are adapting to new realities from those stuck wishing this would all magically end (spoiler: it won't). What can you do to embody entrepreneurial leadership and help your organization navigate today's uncertainties?
A five step plan for entrepreneurial thinking
First, you should actively pursue rapid, small-scale experiments in how to revise your operations to suit the new landscape. Many of the restaurants that successfully adapted went through a series of tweaks in their exploration process. Make your experiments vehicles for learning by being clear on what you hope to discover from each test and how you can capture information about what's working and what's not.
Second, let go of your attachment to the way things used to be and open yourself to pursuing new products, customers, and business models. Hanson Grant's company, Think Board, makes ultra-thin, next generation dry erase boards. Like other entrepreneurial leaders, he drew on his firm's existing capabilities and pivoted to producing essential equipment – in their case, face shields. But he also expanded their core business into products suited to the moment. He entered new markets with Work from Home, Teach from Home, and Learn from Home bundles and developed a child-friendly line of products that let stir-crazy kids doodle on the walls.
Third, be flexible while keeping the long view in mind. Hilton Hotels CEO Chris Nassetta knows that, like all firms in the hospitality business, his company's success is dependent on the motivation and engagement of housekeepers, bellhops, and other frontline workers. Rather than leaving employees to fend for themselves while hotels were shut down, Nassetta linked them with temporary jobs at overwhelmed retailers like CVS, Amazon, and Albertsons through the Hilton Workforce Resource Center. This unusual move keeps employees afloat while strengthening their affinity for Hilton, bolstering their motivation once operations return to normal.
Fourth, recognize the other entrepreneurial thinkers in your organization and make them your allies. To make a rapid pivot like Think Board or Detrapel, you have to have buy-in from your team, while will inevitably include a range of responses to change and risk-taking. If you get the more innovative entrepreneurial leaders on board with the new direction, they can help bring their more cautious colleagues along.
Finally, remember that inaction is also a choice. The tendency in a time of crisis is often to stick with what works, keep your head down, and avoid risks, but that doesn't fly when the landscape is shifting under our feet from moment to moment. Companies have to evolve or risk obsolescence.
Embrace the moment's openness to change
The entrepreneurial leaders among us are looking to the future and finding openings in the midst of turmoil. We're being forced into natural experiments speeding along innovations that have long been on the horizon, like teleworking and online learning. People's typical resistance to change is lower because all the normal ways of doing things have already been disrupted. And innovation is more rewarded than ever, because it's more imperative than ever.
Entrepreneurial leaders who can learn, innovate, experiment, pursue growth, and look to the future are our best shot at harnessing opportunities within crisis and navigating the choppy waters ahead. Entrepreneurial leadership is no longer a nice competitive advantage – it's a must-have for any business hoping to weather the storm.