In business, in the middle of entrepreneurship, we are accustomed, conditioned, to work in causal mode, that is to say that in the first place, we set objectives and then we seek the resources (human, financial, technological, etc.) to achieve these objectives… If, unfortunately, we do not manage to obtain these resources, everything collapses and the project stops.
Effectuation is a mode of reflection that is the opposite of the causal mode, we set our objectives according to our available resources… We then think in the following way: with the resources (human, financial) that I have, what can I TO DO ? What need can I meet and for which market? And as a result, what goals can I set for myself? And this modality changes everything.
But how does this entrepreneurial way of thinking actually work?
There are 5 main principles in the performance.
Start with what you have!
Important resources, you have them in abundance to start your entrepreneurial project. There is first of all you: you with your experience, you with your skills, you with your know-how… Your motivation! It is your most valuable asset. The starting point of a company is not a genius idea, but an individual, with his motivations.
Then there is your network (relatives, friends, acquaintances, colleagues, etc.) that must be mobilized.
Each of the resources of your network that you can mobilize opens up new perspectives, new objectives.
“The entrepreneurial process is based on three bases: what I am, what I can do with it, and who can help me” summarizes Philippe Silberzahn. [i]
It is not true that an entrepreneur, an entrepreneur, takes all the risks. Those who think so have rarely taken action. It is up to you (the entrepreneur) to decide what you accept to invest, to risk, to lose in resources (in time, in money). If, for example, you are unemployed when you create your business and you have 24 months ahead of you and 4000 euros (…), well after 18 months, take stock: are you on the right track? Carry on! Do you think this is not working? Stop. In this case, you decide and agree to lose 18 months and 4,000 euros. This is called: your acceptable loss. Your risk taking is calculated and accepted.
The crazy patchwork
Do you know this sewing technique which consists of assembling several pieces of fabric of different sizes, shapes and colors? No one knows in advance what this book will look like. The same is true in an entrepreneurial project. We aggregate skills, meetings, we seize opportunities… In short, we start without knowing the final result because it is built as we go.
Take advantage of surprises
This is also called the strategy of opportunism. If it is important to understand the economic, social and political world around us, we must stop trying to foresee everything, because it is impossible for us to foresee the unforeseeable. And there are always unforeseen events, surprises which invite themselves. So let’s make these surprises, good or bad, opportunities. Either way they are there, so let’s play with them and make some of them for our business!
The future is not written
It is what we make of it individually and collectively. There is no ledger where everything is written in advance. « The entrepreneur is not the one who predicts the future but the one who builds it », launches Philippe Silberzahn. It’s up to you to write your own entrepreneurial story!
In short, “the best way to predict the future is to create it”. Peter Drucker [ii]
Finally, and to finish, it is important to specify for everyone who would like to embark on the adventure of entrepreneurship, man or woman, young or very experienced, that entrepreneurs are not superheroes, nor not superhuman talents… Entrepreneurship is not only reserved for a small elite. Entrepreneurship can be learned! And effectuation is a tool for learning how to become an entrepreneur.
As you will have understood, these 5 main stages of the effectuation are not only applicable in the context of business creation; any entrepreneur, new or more experienced, can use these principles to move their business forward.
[i] Philippe Silberzahn professor of entrepreneurship, strategy and innovation, author of the book « Effectuation: The principles of entrepreneurship for all », Pearson editions, 2014
[ii] Peter Druker (1909-2005) professor, American business management consultant, author and theorist. It is the origin of many concepts used in the business world, such as entrepreneurship and systematic innovation.