How Entrepreneurs Find Opportunity
September 29, 2011 Editor 0
In 2003, Jim Poss was walking down a Boston street when he noticed a trash vehicle in action. The truck was idling at a pickup point, blocking traffic, with smoke pouring out of its exhaust. Litter was still all over the street.
There has to be a better way, he thought to himself.
Looking into the problem, Poss learned that garbage trucks consume more than 1 billion gallons of fuel in the U.S. alone. They average only 2.8 miles per gallon and are among the most expensive vehicles to operate. In the early 2000s, municipalities and waste collection services were considering more fuel-efficient vehicles and better collection routes to reduce their overall costs and environmental footprint. Poss was not convinced that this was the right approach.
Through discussions with diverse stakeholders, he turned the problem upside down: the answer might not be about developing a more efficient collection process, but about reducing the need for frequent trash collection. As he considered this solution, he discovered multiple benefits: if trash receptacles held more trash, they would not need to be emptied so often; if trash did not need to be collected so often, collection costs and associated pollution would be reduced; and if receptacles did not overflow, there would be less litter on the streets. There were many advantages to this approach.
By applying the solar technology he used at work, Poss envisioned how a new machine might better manage trash. His initial concept of a solar-powered trash compactor was dismissed in favor of other ideas for environmentally friendly inventions, including a machine that would generate electricity from the movement of the ocean. Nonetheless the problem and the potential solutions continued to occupy his mind. “I took pictures of trashcans on my honeymoon,” Poss confessed.
He began to involve others, choosing a team based on who he knew might be interested within his social network. “We are motivated in part because we care about the environment and in part because we know this can be financially successful.” Poss and his assembled team experimented with a variety of options and finally returned to — the Big Belly — an innovation that provides clear solutions to the problems he noted on the city street that day. The current version can hold up to five times more trash than traditional receptacles. As a result, it dramatically decreases the frequency of trash pickup and cuts fuel use and trash-truck emissions by up to 80 percent.
Entrepreneurial leaders like Jim Poss create opportunities using three practices that we have observed again and again in our research of over 1,500 organizations in the past two years. While each practice is separately rooted in existing theory, entrepreneurial leaders distinguish themselves by adroitly circulating between all three, as Poss’s story illustrates:
Relying on self and social awareness. Entrepreneurial leaders shape opportunities within the context of who they are, what they know, and who they know. Notice how Poss began with a problem he experienced directly in his life, linked that concern to his expertise in solar technology, and then connected his ideas with others in his community and his broader networks.
Employing cognitive ambidexterity. This practice is characterized by switching flexibly back and forth between “prediction” and “creation” approaches to thought and action. The prediction approach, which is based on analysis using existing information, works best under conditions of certainty and low levels of perceived uncertainty. The creation approach, on the other hand, involves taking action to generate data that did not exist previously or that are inaccessible. Note how Poss used the prediction approach as he analyzed available operational and financial data on trash truck fuel consumption. In situations where data wasn’t available, Poss generated data himself by creating conversations and prototypes to guide his next steps.
In some instances prediction and creation logics are portrayed as incompatible methods of thought and action. However, in our research into entrepreneurial leadership we found this distinction to be artificial. Through conscious effort, one way of thinking can be used to inform and progress the other way of thinking, making the approaches complementary. Moreover, by engaging prediction and creation approaches, entrepreneurial leaders are able to create greater value than if they had tried only one of these approaches.
Considering social, environmental, and economic value simultaneously. We use the acronym SEERS — which refers to social, environmental and economic responsibility, and sustainability — to capture the full scope of impacts that entrepreneurial leaders consider at once. Consider how Poss was able to simultaneously consider customer benefits (reduced costs for municipalities) and environmental impact (lower fuels emissions) without instinctively privileging one dimension over another.
Using these three practices, he turned garbage into an opportunity.
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