Entrepreneurs - A Whole Different Breed from Intrepreneurs

01/10/2017 02:20 am ET Updated Jan 10, 2018

2017-01-10-1484031767-1438254-hammerheadshalks.jpg

Leading corporations know that "business as usual" is a deathtrap. Working a responsible sustainable business in a Red Ocean, where a product position is characterized by a recognized needs and an existing technology will sooner or later lead to downward spiraling profit margins.

As the corporation is drained for capital, its ability to foster change diminishes and rigor mortis sets in. Continuous disruption, not sustainability, is the only strategy to ensure long term survival.

Disrupting a well-run business is often culturally difficult to do and historically firms have relied on the facilitation of "skunk work" teams. These small teams consist of experts, the best of the best, working under the radar to introduce breakthrough innovative offerings.

Among the more well known skunk work teams are several of the Lockheed fighter aircraft, as well as, Apple's Macintosh, iPod and iPhone. Protecting skunk work teams from the political gamesmanship of the rest of the corporation requires support and direct engagement with the CEO, as well as, physical isolation from the "mother-ship." Both of these requirements are expensive and difficult to maintain in practice.

The latest breakthrough innovation models establish multiple startups and/or acquiring complementary promising startups. Ownership of these startups can then be partial or full, as well as, with or without partners. The management of these startups can be more or less hands-off and requires an entrepreneurial team, whose members are very different from regular in-house and intrepreneurial teams.

All entrepreneurs seem to be passionate and risk-taking, however studies show that so are their counterparts. A design science research project at Copenhagen Business School in the summer of 2016 compared two parallel courses - one on Integrated Design for Established Firms, the other on Design Driven Startups. The research found that what sets entrepreneurs and intrepreneurs apart are three personal traits and one key priority - a focus on design.

In fact, Entrepreneurs and intrepreneurs take on the same amount of Combined risk (Market risk x Technology risk x Execution risk). This corresponds to about the same risk level that venture capitalists are accustomed to taking when financing a new entrepreneurial venture. However, their variation in risk varies hugely - entrepreneurs are all over the map while intrepreneurs converge on a mean. This variation is exactly what investors should be looking for when building a portfolio of startups.

While entrepreneurs and intrepreneurs rate themselves equally high on self-management and the variation was also the same, an external expert assessment found entrepreneurs perform twenty percent lower than intrepreneurs. This difference in outside perspective may be due to entrepreneurs having fewer of the explicit requirements and directions of intrepreneurs.

Previous studies on self-management showed that it is strongly related to adaptability and social networking with a focus on being design-centric. One has to be a true leader, - meaning proactive, responsible and accountable. These are critical characteristics for forming consistent and cohesive values, beliefs, vision and mission. What is then required is the translation of these characteristics into an actionable strategy with clearly outlined objectives and goals.

Entrepreneurs are surprisingly more self-contained and somewhat more isolated when compared to intrepreneurs. Entrepreneurs were shown to engage thirty-seven percent less with their peers than intrepreneurs.

While one must be somewhat pigheaded to perform at a top level, when coupled with the increased variation in performance throughout the new business development process, this trait can also lead to catastrophic failure since it is a binary game.

Also, entrepreneurs rated themselves as having fifteen percent more grit than intrepreneurs, the only predictor previously found to strongly influence performance.

When acquiring startups, the team is initially the most important factor and here it is important to make sure the founders and leaders have the above mentioned personal traits, which can be assessed using the Applied Design Science's Founder Assessment tool.

Moving out of the Red Ocean and into the Maverick Shore area, without going so far as to end up in Kamikaze Country is a combination of art and science. However, there are now useful metrics available to navigate the terrain such as Design Quantification, Design & Risk Assessment and the Founders Assessment.

During the past decade, entrepreneurs applied a "Just do it!" approach, hoping something would stick to the wall. Now, with a new body of evidence based methods pointing toward the realization of better outcomes, the field has matured - making "Assess before acting" the new mantra.