How to win from uncertainty: four tips for entrepreneurs

Caitlin Fitzsimmons Online editor

How to win from uncertainty: four tips for entrepreneurs

Published 29 January 2014 11:50, Updated 30 January 2014 10:39

The world is not predictable – even if you have a crystal ball. Photo: Phil Carrick

Dave Snowden, the UK-based founder of Cognitive Edge, has a message for any entrepreneur trying to figure out how to avoid risk and uncertainty – don’t bother.

Snowden, who will be running a series of workshops in Australia in February, says the world is inherently unpredictable and becoming more so as big trends such as overpopulation and climate change reshape our world. The good news for entrepreneurs is that greater uncertainty creates opportunities for innovation.

“There’s a huge opportunity to create completely new products and services,” Snowden says. “As the world becomes more uncertain, it is easier to create new things because people are open to novelty.”

His work draws from the fields of cognitive neuroscience, anthropology and complexity theory to study social systems and explore how organisations can become more resilient in the face of uncertainty.

1. Plan for failure

“For the last 30-40 years an engineering model has dominated society and engineers tend to believe the world is predictable whereas ecologists know it isn’t,” Snowden says. “The switch from the engineering model to the ecological model is happening at the moment.”

The implication is that businesses should abandon fail-safe design as a goal and instead lower the cost of failure, by planning multiple, small experiments where it is safe to fail. Engagement with the problem is still necessary.

“You can only understand a complex system by interacting with it so the key is to interact in very small ways,” Snowden says.

2. Diversify your thinking

“The evidence from most of human history is that often we solve complex problems when we forget about them and try to solve something else,” Snowden says. “The lesson is to increase diversity of thinking and range of thinking. So, for example, we’ve done things like put anthropologists in a hotel chain who had literally come from working in the jungles of Papua New Guinea and liturgical design specialists in operating theatres in hospitals in the US.”

3. Understand the implications of growth

“Entrepreneurs as a group tend to be resilient but big companies aren’t,” Snowden says. “As you become more successful, you start to believe your own myths.”

The key to managing the growth curve from start-up to mature company is to identify and challenge the underlying belief structures in an organisation. In Snowden’s case, Cognitive Edge has been able to grow its revenue but not its staff numbers by embracing a network model where it works with independent trainers around the world. This has an added advantage because it’s messy and Snowden says “messy systems are more resilient than tidy ones” – another lesson from ecology. Another common response is to become a serial entrepreneur who founds start-ups and then exits once they reach a certain size.

4. Replace market research with stories

Snowden says questionnaires, focus groups and other market research techniques are expensive and won’t tell you what really matters to people. It is more effective and cheaper to continuously monitor the stories that people are already telling, for example on social media platforms, or to elicit new ones.

He helped Philips run a campaign in Europe, where the manufacturer used Twitter to tap into people’s stories about their gardens, by offering one euro to a tree-planting charity for every story. The insights led Philips to develop lights that are part of the garden landscaping rather than lights that are used in the garden.

“Narrative research is cheaper than conventional market research and entrepreneurs are quicker to spot the patterns,” Snowden says. “Entrepreneurs succeed by redefining markets. The key thing is to find what people want, not what they say they want, and that’s part of understanding the underlying patterns.”

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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