Introducing the Effectuation principles
The Principles Learn how Expert Entrepreneurs Think, Decide and Act!
The 5 Principles
The 5 Principles
Effectuation is a set of (5) decision-making principles expert entrepreneurs are observed to employ in situations of true uncertainty.
BIRD IN HAND principle
- start with your means -
We have been taught that entrepreneurs are true visionaries. Research shows that expert entrepreneurs are no more visionary than you and me. They are, however, very creative! When expert entrepreneurs set out to build a new venture, they are creative with their available means: who am I?, what do I know?, whom do I know?, What do I have? Expert entrepreneurs imagine possibilities that originate from their available means.
Click here for the corporate description of the bird in hand principle
AFFORDABLE LOSS principle
- focus on the downside risk -
We have been taught that entrepreneurs are insane risk-takers. About 80 percent of the researched expert entrepreneurs, however, were found to limit their risks to what they can afford to lose at each step, instead of seeking large all-or nothing bets. So don’t let this myth keep you from becoming an entrepreneur. Focus on limiting the downside to an affordable level that can be controlled and do not try to predict the upside as this is impossible under true uncertainty.
Click here for the corporate description of the affordable loss principle
CRAZY QUILT principle
- form partnerships -
Expert entrepreneurs build partnerships with self-selecting stakeholders. By obtaining pre-commitments from these key partners early on in the venture, expert entrepreneurs reduce risk and co-create the new market with its interested participants. The quilting partners provide additional means with which the team can be creative with and limit the risks of the new venture. Don’t pay for means and increase risk, share revenues and limit investments.
Click here for the corporate description of the crazy quilt principle
- leverage contingencies -
Expert entrepreneurs invite the surprise factor. They know that the future is uncertain. Learning faster than your competitor is key. Take small organic steps and validate learning. Instead of making ‘What if?’ scenarios to deal with worst-case scenarios, experts interpret bad news and surprises as potential clues to create new markets and adjust value propositions.
Click here for the corporate description of the lemonade principle
PILOT IN THE PLANE principle
- control versus prediction -
By focusing on activities within their control, expert entrepreneurs know their actions will eventually result in a desired outcome. An effectual worldview is rooted in the belief that the future is neither found nor predicted, but rather made. So take action. Set small affordable steps and learn faster than your competitors while creating a future you and I want to live in.
Click here for the corporate description of the pilot in the plane principle.
Entrepreneur in 100 days!
Built upon our Effectuation body of knowledge and severely tested process and toolset, we are now offering you the possibility to become an entrepreneur in 100 days! Only for those who really want it! That’s all you need: the willingness to persevere and we will guide you through the journey.
We know what it’s like to want to take the plunge and not knowing how to limit the risk and figure out what your market should be. We now know how and we are therefore offering to guide you through the process. Hard work and great fun!
“Let’s make sure you don’t make the mistakes we have made…”
Also for teams and Entrepreneurs within established companies
Same program/approach is suitable for entrepreneurs working within an established company and who want to develop new business initiatives to grow the business. We will guide you too, as the same approach works wonders for you too! We should know as we guide teams a a broad range of corporates, among which even 3M…
Interested? Visit our Beta-website Entrepreneur in 100 days! just send an e-mail. and we will contact you for a first free consultation through Skype!
This is why we will confront you, challenge you, inspire you, give you tasks you never thought you would actually do and still call it guiding… :
Effectuation in Action
ALSO FEEL FREE TO SEND US AN E-MAIL
‘The basis of our past successes does not guarantee future success. We increasingly need business developers who take market changes as their point of departure and then devise new business models to match these.’
- Rob Schokker, General Manager Human Resources 3M Germany -
We would love to unleash your hidden entrepreneurial potential too!
As a manager your benefits will be:
- increasing people engagement;
- alignment of contributions to the strategy;
- growing the ability to develop competitive advantages;
- while coping with market unpredictability and volatility.
As an entrepreneur your benefits will be:
- develop a story no customer can withstand
- grow your revenue with new business
- find the courage to actually start if you are still doubtful
- have fun while doing it even though it scares the hell out of you.
We have a background in leadership and executive development and now also offer you a state of the art body of knowledge that enables us to effectively unleash the entrepreneurial potential within your organization or just simply for yourself in a guided manner. We offer two programs: entrepreneur in 100days and entrepreneur in 100 days. We will teach you(r talents) how to think, decide and act as expert entrepreneurs enabling you and or them to build and grow competitive advantages in an ambiguous world.
Why embark with us?
We believe that the development of entrepreneurial capabilities is crucial for any company big or small to stay ahead of the competition and will enable talents to improve their odds when trying to develop new business opportunities.
Coming from a corporate background, Thomas Blekman for instance, started his journey to figure out how established companies could become more effective and efficient in innovation. The journey took him 10 years to get to his current expert status. He himself is an entrepreneur too. And so are most of his colleagues that will guide you. Entrepreneurs for the entrepreneurial!
FOR INQUIRIES ON OUR SERVICES PLEASE CALL +31 88 66 44 401
ALSO FEEL FREE TO SEND US AN E-MAIL
Nowadays Thomas, one of our senior managing partners at De Beukelaar Groep, is a renowned international speaker, as well as
an appreciated facilitator and trusted adviser to many. And lso founder of this website. Luckily for him he is not alone. His network allows him to match up with the biggest in the industry and still keep it uncles and personal.
Thomas Blekman delivers introductory workshops, keynotes and programs to get to a wide range of outcomes:
• Getting the entrepreneurial mindset and culture right
• Aligning ambitions and initiatives to the overarching strategy and company’s purpose
• Growing the engagement of employees and unleashing their hidden potential
• Developing new high valued growth initiatives and business models
All activities are focused on:
“Outrunning your competition with quick, small steps, starting from your birds in hand and by co-creating crazy quilts to deliver on your promise!”
During his quest Thomas has discovered multiple models, methodologies and groundbreaking academic research such as Effectuation theory coined by Prof.dr. Saras Sarasvathy. It was Saras’ work that catapulted Thomas to his solutions and current body of knowledge, Corporate Effectuation.
During his experimental work at De Beukelaar Group, where he is now a senior managing partner and at the RSM Erasmus University, where Thomas is now a part time clinical Professor, Thomas discovered an order in which the different models and techniques are applied best.
“It will be a while before I stop talking about the workshop, and I will never think the same way again!” – Maria-Niki Mylonakou, PhD –
“A great experience and one of our best off-sites ever.” – Edward Overzee Gallas, ABN AMRO -
“His ability to move effortlessly back and forth between academia and practice make him a great asset for RSM.” – Pursey Heugens, RSM Erasmus University –
Examples of De Beukelaar Groep clients:
3M, Rabobank, Dupont, General Mills, Gazelle Colleges Group, PostNL, Aon, Amgen, Roche, Samsung, ABN Amro, RWE.
unsuitable ‘big business tools’
The search for a new business model requires dramatically different rules, roadmaps, skill sets and tools in order to:
- Guide direction
- Minimize risk to an affordable level
- Dramatically enhance chances for success
While receiving our coaching and guidance, you will be equipped with ready-to-use tools that can be used to orchestrate entrepreneurship within established companies. You will also have the opportunity to acquire insights and experiences from different companies that are operating in various industries.
Our approach is practice-driven and hands on. In combination with receiving inspiring talks containing valuable information, you will also be challenged to apply and experience Corporate Effectuation first-hand by collaborating with fellow participants.
Who is this training for:
• It’s for everyone who agrees that simply improving traditional execution of business models is not enough and for those who want to learn to apply entrepreneurial practices that will improve overall organizational effectiveness.
• Be skeptical, expect our approach to be similar to what others offer, assume corporate entrepreneurship is just a myth and be open for monumental surprises.
Possible results depending type of program:
• Validated new, repeatable, scalable and profitable business models
• Ability to apply the 5 widely acclaimed decision-making principles to cope with unpredictability and uncertainty
• Awareness of first-hand accounts about how multiple companies have already incorporated and benefited from corporate effectuation.
• Ready- to-use toolbox containing models that can be applied within your own company or organization
• First-hand experience with collaboration and ideas that are ready to be pursued
• The unleashing of hidden potential from within your company
• Increased adaptiveness of open professionals within your organization
• The awakening of your entrepreneurial potential and of your company and colleagues.
• The awakening of entrepreneurial potential within you, your company, and amongst colleagues
Why we are excited!
On this website and through our program you will discover that there is a science to entrepreneurship — a common logic we have observed in expert entrepreneurs across industries, geographies, and time. We call it Effectuation, a method you can follow as you tackle problems while growing your own business.
Effectuation makes entrepreneurship learnable and easy to understand, this is what drives our excitement and enthusiasm. Take a moment to consider the implications this has for the future of business. With the five simple Effectuation principles (see above), you can either start or transform your company and make it a game-changing and valuable organization that will overcome the challenges of today and tomorrow.
Don’t get us wrong.
We love Sir Richard, we really do. We applaud him for what he has done in the world. The only thing we want to change is your awareness! You too can be as entrepreneurial as Sir Richard, if you are truly willing. The only thing you need to do is learn and apply the Effectuation principles.
The Stress of Uncertainty
Experienced entrepreneurs have a much easier time dealing with the stress of uncertainty, in part because they think and act in ways that virtually negate it.
“The expert entrepreneurs think in terms of control, not in terms of uncertainty,” says Saras Sarasvathy, associate professor at University of Virginiaâ??s Darden School of Business, who studies how entrepreneurs cope with uncertainty.
Thinking in terms of control empowers you to focus on the actions you can take to minimize risk. “Great entrepreneurs get very good at shoring up the downside, but embrace products with uncertainty on the upside,” Sarasvathy says. That balance allows for both stability and freedom.
Here’s how great entrepreneurs achieve a sense of control:
1. Start by gathering stakeholders.
Experienced entrepreneurs don’t act alone — they take control by getting others on board before they start a new project. They look for stakeholders in all areas of the business — potential employees, suppliers, investors, and customers — and ask them to make a small commitment to the project.
That buy in is essential. If experienced entrepreneurs canâ??t get a couple stakeholders in each category, they kill the project. “They almost define a great idea by whether they’re able to bring enough people together,” Sarasvathy says. “If not, then your idea probably isnâ??t that great.”
2. Place small bets at the beginning.
Lower your stress and worry by starting with small investments — things that you’re willing to lose if the company fails. Maybe you’re willing to work nights and weekends, or pay to create a prototype. “You still donâ??t know if you’ll win, but if you lose, you’ll lose very little,” Sarasvathy says. “You have control over the downside.”
Approach your early stakeholders this way as well. Ask them to place small bets that they would be willing to lose. For example, when Richard Branson created Virgin Atlantic, he asked Boeing to loan him a used 747 for a few months to test the idea. If it worked, they’d have a new customer; if it didn’t, they lost very little. “Even a 747 is an affordable loss for someone,” Sarasvathy says.
3. Get early commitment from customers.
As experienced entrepreneurs often say, fail early and fail often. That strategy lowers stress by giving you opportunities to improve your idea before you have too much in the game, and the best way to do it is to talk to your customers early. “Preselling an idea is the surest way you can make the idea fail or succeed earlier,” Sarasvathy says.
Pitch your idea and share rough prototypes as often as you can. You have to be prepared — even excited — for others to critique your product. If you keep it behind closed doors because you fear your customers’ response, you are doing yourself a disservice and adding unnecessary stress.
4. Work within constraints.
Having unlimited time and money to start your company seems like a luxury, but it actually adds a ton of stress and pressure. Working within constraints, such as limited time or money, lowers your emotional investment without hurting your passion or commitment.
Constraints also make you more creative.
“People who start with a lot of money can be much more likely to lose,”
Sarasvathy says, in part because they have less impetus to innovate.
For example, Pierre Omidyar created eBay on nights and weekends, which forced him to create a more ingenious system that would sustain itself with little central management. His constraints kept stress levels low and made eBay the success it is today.
Steve Jobs was an Effectuator too!
There’s a popular misconception: To be an entrepreneurial visionary, you need a unique idea and the ability to envision it as a future product. You need to see that thing that is invisible to others yet teasingly stares at you. You need to go big or go home. You must dedicate yourself, your life, to your idea. Because only you have heard its call, and because this beautiful, singular, and painstakingly detailed vision burns brightly in your brain.
You are on fire. This big idea is your big chance, hence you code feverishly 24/7, which propels you into the perpetual ramen-profitability of the favela-chic startup lifestyle.
Because you have fallen victim to the Myth of the Visionary, the mistaken idea that visionary entrepreneurs – revered talents like Steve Jobs, Jeff Bezos, Thomas Edison, Henry Ford – are able to envision a future, based on some supposed unique idea, upon which they must simply execute to create a disruptive product.
But that’s a sucker’s bet – a buzz saw that enthusiastic would-be entrepreneurs walk into and emerge, at best, cut up and scarred – but usually, painfully eviscerated watching the remains of their precious idea bleed out in their hands.
This myth manifests itself in entrepreneurs with two types of pernicious behaviors.
Most typically, entrepreneurs, those we call the “inflated,” confidently declare themselves as visionaries. Their primary driving force is nothing more than their firmly held (yet untested) conviction in their own ideas. They scoff at interacting with their customers, willfully ignore market feedback, focus on building product for themselves, not on validating the quality of their ideas, and consider skepticism a debilitating weakness.
They go “stealth” and most of them will fail miserably.
On the opposite end of the spectrum are the “deflated” – those who fail before they start – who flail at generating an impeccable “Big Idea” and therefore view themselves as non-visionary, neither worthy nor capable of creating a great product.
Being a visionary, however, has less to do with any specific idea than with committing to relentless change. The former is trivial; be stubborn and persevere undaunted. The latter is onerous and painful; propel your idea forward as you steward its evolution.
Arguably, the most disruptive aspect of the iPhone is the App Store and the ecosystem of third party apps, which didn’t exist until the summer of 2008. Opening the iPhone to third party developers was something that Steve Jobs vehemently resisted, since he felt such an action would, as Walter Issacson noted in his biography of Jobs, “pollute its integrity.”
Jobs had good reasons for resisting opening up the iPhone – remember, when he launched the iPhone at MacWorld in January 2007, he pitched it as a 3-in-1 device. Equal parts touch control iPod, revolutionary mobile phone, and breakthrough Internet communications device, a product over which hardware, software, and content Jobs and Apple held firm control, having been burned on an earlier collaboration with Motorola and Cingular on the ROKR.
Apple board member Art Levinson, venture capitalist John Doerr, and Apple marketing chief Phil Schiller lobbied Jobs, arguing that that such a powerful platform as the iPhone would benefit from inviting third party app developers to create new services.
Jobs’ initial solution announced at WWDC 2007 was to allow third party developers to develop Web 2.0 applications (with access to iPhone core functionality), which iPhone users could access through Safari. Developer reaction was largely one of irritation. In response, the emergent ‘jailbreak community’ spun up Installer.app and Cydia, which allowed developers to build apps for jailbroken iPhones and for users to download and install third party apps.
Rather than sticking to his initial vision of the iPhone as a defensive market response to the potential of cellphones eating into the fat profits of the iPod market, Jobs made what appears to be a Solomonic product decision by announcing the iPhone SDK in spring 2008. This was his answer to consumers who wanted third party apps for their phone to do things that Apple hadn’t even considered.
Refusing to be held captive by (his own) bad ideas, he altered his vision to capture the best of both worlds, retaining control of iPhone apps with a strict app approval process while allowing third party apps to flourish.
Steve Jobs, like other great entrepreneurs such as Jeff Bezos, Thomas Edison, and Henry Ford, didn’t have a perfect vision of the future. Neither should you.
As Jony Ive observed about Steve Jobs’ impact on Ive’s own ideas, “The ideas that come from me and my team would have been completely irrelevant, nowhere, if Steve hadn’t been here to push us, work with us, and drive through all the resistance to our ideas into products”.
True visionaries are not like the Myth of the Visionary would have us believe, they are not rocks in a stream – stubbornly refusing to be moved – but are more like water flowing around obstacles while synthesizing inputs, making tradeoffs, and learning from the market to create great products with great impact.
Steve Jobs in “The Lost Interviews.”:
“As you evolve that great idea, it changes and grows, it never comes out like it starts because you learn a lot more as you get into the subtleties of it. You also find tremendous trade-offs that you have to make. There are certain things you cannot make electrons do, or plastic or glass or even factories or robots. Designing a product is keeping 5,000 things in your brain – fitting them altogether in new and different ways to get what you want. Every day you discover something new that is a new problem or a new opportunity to fit these things together.”
Take it from him. Don’t fall prey to the Myth of Visionary and assume your idea is either too perfect to alter or too incomplete to start. Pursue the change, not the idea itself.
This blog was written by Cooper and Vlaskovits (March 2013)and if you read closely you will recognize the lemonade principle !
Learn from Jobs: experiment, learn, adapt and above all persevere!
Effectuation for companies
With the available means of a corporate and an effectuation mindset, businesses can prosper in a way that many can’t even imagine. The changes achieved through Corporate Effectuation are even more impressive and pronounced when you compare them to the advice received from highly priced old school consultants who provide reports which tell you how you can become even more similar to your competitors.
It’s time to stop the ‘me-too’ benchmarking insanity! It’s killing your identity, value and engagement! It also doesn’t make you successful during the Search and Growth phases.
It is our passion and ambition to transform large organizations into entrepreneurial powerhouses that are equally as entrepreneurial as serial entrepreneurs. Becoming more entrepreneurial will serve to create more value for themselves, their customers, and society as a whole. Creating opportunities for validation, collaboration, and the production and delivery of goods and services is our number one goal. As a result of our first-hand experience, we have developed the skill set that’s required to create new business models and scale them in a corporate setting.
Do you recognize any of these quotes?:
- We’ve been working the business model canvas, but we still don’t know what to do next.
- How do I deliver the growth and value I pledged to my board?
- How can I nurture small valuable initiatives without losing sight of the core business operations?
- How can I prevent our culture of fear from killing our next ‘Post-it Notes’?
- What does it take to engage our employees and spark their passion and creativity to create value?
- How do I realize innovation without hugely expensive and uncontrolled gambles that could compromise the company?
If you recognize any of these quotes, we would love to help you!
Through our extensive network and first-hand experience, we can facilitate a transformational process within your organization that will enable you to pursue aggressive growth targets without risking massive downside losses. The solutions we offer you combine personal and team development with NEW school consulting and facilitation to provide you with entrepreneurial insight and expertise.
Effectuation is widely acclaimed as a rigorous framework for understanding the creation and growth of new organizations and markets in the academic world. Effectuation theory was founded in 2001 by Prof.dr. Saras Sarasvathy. Through rigorous research and implementation, we have adapted Effectuation in a way that unleashes the full value and potential of established companies and organizations. We are proud to have Saras’ endorsement:
“For several years now, they have been working to bring effectual entrepreneurship to the corporate world. In the process, they have built their own toolbox on the topic. I commend their efforts and am happy to learn from them.” – Prof.dr. Saras Sarasvathy also member of our board of inspiration.
Learn more about maximizing the entrepreneurial potential of your organization!
What managers should learn from expert entrepreneurs
As we see, know and understand, not everyone has this entrepreneurial mindset. Therefore, we aim to make the scientific basis of entrepreneurship understandable, concrete, implementable, feasible and fun.
Time and again we see that organizations become inspired by the ways experienced entrepreneurs think and act. When using the Effectuation mindset, the DNA of businesses is transformed, they become future-oriented, decisive, and executive. This transformation adds value and more opportunities to achieve success in an ever-changing world.
In everything we do, we continue to lead the market and will never stop innovating and enriching ourselves with new insights. Intrinsic curiosity is embedded within our DNA. Our belief in application, vigor, and concretization is our motivation. The positive transformation of people and companies is our evidence.