There are many beliefs around the right way to run a business. Some are linear, following the standard business practices of consistency, goal orientation, careful strategy and planned resource deployment. Others, backed by empirical research from the likes of Baker & Nelson, Sarasvathy, and Crossan, provide a more adaptable view of entrepreneurship for the modern world. In recent studies flexibility and resourcefulness have shown themselves to be key functions of a successful business, leading to the concepts of Effectuation, Bricolage and Improvisation emerging within entrepreneurial practices.
Improvisation, defined by the Cambridge Dictionary as: “the act of making or doing something with whatever is available at the time”, has been the topic of significant contemporary business research built on deductive theorising and comparative case studies. This research has led to a few surprising conclusions about improvisation in business management:
The benefits of any style of improvisation in a person’s work appears to be linked to the skill level of the individuals undertaking the related work activity. For example, an experienced entrepreneur will be better skilled at quickly locating resources in their field of experience than a new entrepreneur who has only just started in that industry. Research has indicated that unskilled or inappropriate improvisation can actually have negative effects on a business. Though, it is important to note, that these unintended side-effects can often expose broader issues that may have been hidden behind the daily operations.
Improvisation also generates real-time learning, though it is often specific to the situation or issue being addressed rather than increasing a person’s overall competency. However, organisations which practice trial and error learning, or long-term adaption, can successfully embed improvisation into their practices right from the start-up phase.
Bricolage is defined by the Merrian-Webster Dictionary as: “construction … achieved by using whatever comes to hand”. Aimed at understanding how various items and skills gained by a person or group can be combined to serve new functions, the concept of Bricolage was connected to business management in no small part by the work of Baker & Nelson in 2005. Some of the outcomes of their research have been summarised here:
- The concept of “Making Do”. The denial of limitations, particularly those concerning what things can and cannot be used for, is a very human concept – used mostly when items are free or the budget is tight. Bricolage takes this to the next stage where, instead of worrying over what will and will not work, a trial and error approach is used to test out solutions until the right answer or product is found.
- Combining resources is also a use for the Bricolage concept. Here new services, ideas or products can be discovered and created from the understanding of how the different aspects of a service can work together.
- Questioning what is useful can be very important in business as it relates to the value of the product or service being provided. Bricolage allows for this question to be investigated and services streamlined as entrepreneurs seek the most innovative solutions for their business. This process can prove highly valuable in cases where products or services have developed organically and lack structure.
Effectuation has been defined by Sarasvathy as: “a logic of non-predictive control that takes a set of means as given and focuses on selecting between possible effects that can be created with that set of means.” Which can be summarised as accepting life is chaos and choosing instead to control what can be done in the present in order to take advantage of future opportunities. Effectuation aims to avoid the pitfall of believing life can be accurately predicted by deciding to control what the individual can in the present moment. For example:
- The old saying that a bird in the hand is worth two in the bush is key to Effectuation. The concept relates to working with what capital an entrepreneur has rather than the millions they may yet create to prevent choosing a misaligned outcome based on inaccurate figures.
- Affordable loss. Every gamble, every risk, has its consequences and the affordable loss principle of Effectuation means that any risk being taken is done so from a position of security regardless of loss or gain.
- Alliances of strategy rather than competitive alliances also relate to Effectuation as they reduce the potential barriers around communication and collaboration, particularly when there is pre-commitment from stakeholders before the alliance is finalised.
Effectuation, Bricolage and Improvisation are concepts that have only recently begun to challenge the traditional views of business management and entrepreneurship. Yet, in a world that is rapidly changing and evolving, the importance of resourceful adaptation becomes clearer every year.
For a free consultation on how this can work for you, call Pauline on 0467 731 319.