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The Fourth Industrial Revolution – Learning from entrepreneurs and fostering ecosystems

01.10.2021

The Fourth Industrial Revolution poses an opportunity and a challenge of epic magnitudes. On the one hand, technology democratization, oiled by a decrease in price of technological products, and digitalization, provide an excellent ground for individuals from across the globe to prosper. On the other hand, for this revolution to be possible, it needs to be paired with a reskilling revolution the likes of which we have not seen before. Moreover, the covid-19 pandemic caught a great majority of companies, and people, unprepared or/and ill-equipped, accelerating their reskilling needs. As a consequence, the urgency for change, adaptation and reskilling is now more pressing than ever.

In this context, there is plenty to be learned from those individuals who have been praised for decades for their adaptability and innovativeness. Entrepreneurs are experts in navigating turbulent waters, and in turning the tide to their advantage, and are able to do so partly due to a specific set of competencies, skills and an approach to business, we can all learn from.

The team helps with success

In the last decades we have seen how a majority of institutional investors, business angels and also venture capitalists, have moved from a due diligence process addressing mostly the business plan to assessment processes that acknowledge that the team is a crucial aspect, if not the most crucial, when it comes to start-up success. This is especially the case for early-stage start-ups because we know they are likely to pivot and adapt their business model as they go along. This due diligence process shift has also boosted the use of a wide range of tools and models (e.g. DISC, 360-dgree assessment, Big 5 model…) to assess the human capital of start-ups.

The team is a crucial aspect, if not the most crucial, when it comes to start-up success

As part of these efforts to assess start-up teams, EIT InnoEnergy developed its own model and identified the human competencies that have proven important for the success of start-up teams. These competencies are critical for entrepreneurs but, as the Fourth Industrial Revolution touches us all, leaders and managers could also benefit from becoming more entrepreneurial. Within these competencies, seventeen in total, we find adaptability, internal locus of control, and the most critical competency identified in the research: achievement motivation.

What is Achievement motivation?

Achievement motivation is the desire or tendency to achieve things rapidly, efficiently and/or as well as possible. People high on this competency have the desire not only to achieve things but to accomplish challenging and difficult goals and exceed a standard of excellence. In order to do so, we oftentimes see people high on this competency measuring outcomes again goals, innovating, and taking calculated risks do something new or better. Although this competency also has its dark side, with people with very high levels of achievement motivation willing to do everything in their hands to achieve what they want, even if it means bending or breaking rules and laws, we want to see entrepreneurs, and potentially leaders, high on achievement orientation.

People with very high levels of achievement motivation willing to do everything in their hands to achieve what they want

We need individuals who feel they are in control of the situation

In addition to achievement orientation, we need individuals who feel they are in control of the situation, a competency known as internal locus of control. Internal locus of control refers to the extent to which individuals believe that they exercise control over their lives. In contrast, individuals who are high in external locus of control feel their destiny is beyond their own control and is determined by fate, chance or powerful others. Feeling that they are in control allows entrepreneurs to act, versus “taking the passenger seat” and floating with the stream.

Agile business leads to success

Successful entrepreneurs also score high on adaptability, a competency that allows them to change behavior, and leadership style, to better fit the situation, to reprioritize goals in the face of change, to recover quickly from unexpected changes or setbacks, and to work to define alternative ways to reach goals or targets. This competency allows entrepreneurs to have an approach to business grounded on agility and hypothesis testing, which is an essential part of what has been labelled “lean startup”. Within this framework, every assumption is examined through experiments and decisions are made based on them. This allows entrepreneurs to take calculated risks in our VUCA (volatile, uncertain, complex and ambiguous) society without the need to make extensive use of forecasts and predictions.

Successful entrepreneurs also score high on adaptability

Humble leaders thriving in ecosystems

This set of competencies, and others such as planning and organization, impact and influence, or proactivity, are not only the realm of entrepreneurs and we need leaders and managers to excel on them. Not every company can, or should, be run like a start-up but being aware of the competencies can potentially allow our leaders to take the best of the entrepreneurial and corporate worlds.

Moreover, these competencies flourish and are oftentimes nurture in networks and ecosystems. We therefore need even more efforts to boost these digital and physical ecosystems and networks and we need leaders who thrive in them. We also need leaders who are humble, know their limits and surround themselves with relevant team members from these very ecosystems. Networking capabilities, network information seeking (acquiring information from peers but also from “weak ties”) and social capital, are also to become more important than even before.

Everyone must be given the opportunity to develop themselves

To finish, we need to ensure that awareness about these competencies is achieved but also that possibilities for improvement, by either training, coaching or other means, are available when and where needed. In a digital, hyper connected, society, in which talent is available worldwide, we can simply not afford part of the world not to have the capacity to be proficient on these competencies. This would not only limit the possibilities of some countries to prosper but it is an overall waste of resources from a macroeconomic perspective. For this not to happen, we will still require further digitalization of trainings but also an increase of connectivity in remote areas and developing countries.

 

This article is an article from: Entrepreneurship and value creation Research group

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2 kommenttia artikkelista “The Fourth Industrial Revolution – Learning from entrepreneurs and fostering ecosystems

  1. Emmanuel sanoo:

    Very interesting, it feel like differences between people with regards to the variables of achievment motivation could be a source of problems in teams: there can be mismatch, or source of conflict, between the ”efficient one” and the one who wants to do things ”as well as possible” (that can mean ”perfect” for many handicraft entrepreneurs and creative industry in general).

  2. Thank you so much Emmanuel! Very relevant point you are raising here!

    In general, people (very) high on achievement motivation can in fact exhaust a team with their, oftentimes, extreme approach to work. People high in achievement motivation are known for not being able to disconnect, being ”workaholics”, working long hours… all in their ”pursuit to achieve”. Moreover, they expect others to do the same so… you can see the challenge here…

    In the creative industries, the issue is even trickier because entrepreneurs in that sector need to find a balance between artistic aims and economic demands. The business logic asks them normally to push while the creative side of it requires at times to slow down the pace so… challenging decisions to be made! This is in fact something I wrote about in article with co-author Birgitta Sandberg on how an accelerated speed of development harms the outcome of creative industries. Below the link in case you want to check

    https://www.inderscience.com/info/inarticle.php?artid=105485

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